diff --git a/homeassistant/components/sms/__init__.py b/homeassistant/components/sms/__init__.py
index 9b091942556..b1c2703409c 100644
--- a/homeassistant/components/sms/__init__.py
+++ b/homeassistant/components/sms/__init__.py
@@ -1,4 +1,6 @@
 """The sms component."""
+import logging
+
 import voluptuous as vol
 
 from homeassistant.config_entries import SOURCE_IMPORT, ConfigEntry
@@ -7,13 +9,24 @@ from homeassistant.core import HomeAssistant
 from homeassistant.helpers import config_validation as cv
 from homeassistant.helpers.typing import ConfigType
 
-from .const import DOMAIN, SMS_GATEWAY
+from .const import CONF_BAUD_SPEED, DEFAULT_BAUD_SPEED, DOMAIN, SMS_GATEWAY
 from .gateway import create_sms_gateway
 
+_LOGGER = logging.getLogger(__name__)
+
 PLATFORMS = [Platform.SENSOR]
 
+SMS_CONFIG_SCHEMA = {vol.Required(CONF_DEVICE): cv.isdevice}
+
 CONFIG_SCHEMA = vol.Schema(
-    {DOMAIN: vol.Schema({vol.Required(CONF_DEVICE): cv.isdevice})},
+    {
+        DOMAIN: vol.Schema(
+            vol.All(
+                cv.deprecated(CONF_DEVICE),
+                SMS_CONFIG_SCHEMA,
+            ),
+        )
+    },
     extra=vol.ALLOW_EXTRA,
 )
 
@@ -39,7 +52,12 @@ async def async_setup_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
     """Configure Gammu state machine."""
 
     device = entry.data[CONF_DEVICE]
-    config = {"Device": device, "Connection": "at"}
+    connection_mode = "at"
+    baud_speed = entry.data.get(CONF_BAUD_SPEED, DEFAULT_BAUD_SPEED)
+    if baud_speed != DEFAULT_BAUD_SPEED:
+        connection_mode += baud_speed
+    config = {"Device": device, "Connection": connection_mode}
+    _LOGGER.debug("Connecting mode:%s", connection_mode)
     gateway = await create_sms_gateway(config, hass)
     if not gateway:
         return False
diff --git a/homeassistant/components/sms/config_flow.py b/homeassistant/components/sms/config_flow.py
index 37b78ee3ea3..acc33075397 100644
--- a/homeassistant/components/sms/config_flow.py
+++ b/homeassistant/components/sms/config_flow.py
@@ -6,13 +6,21 @@ import voluptuous as vol
 
 from homeassistant import config_entries, core, exceptions
 from homeassistant.const import CONF_DEVICE
+from homeassistant.helpers import selector
 
-from .const import DOMAIN
+from .const import CONF_BAUD_SPEED, DEFAULT_BAUD_SPEED, DEFAULT_BAUD_SPEEDS, DOMAIN
 from .gateway import create_sms_gateway
 
 _LOGGER = logging.getLogger(__name__)
 
-DATA_SCHEMA = vol.Schema({vol.Required(CONF_DEVICE): str})
+DATA_SCHEMA = vol.Schema(
+    {
+        vol.Required(CONF_DEVICE): str,
+        vol.Optional(CONF_BAUD_SPEED, default=DEFAULT_BAUD_SPEED): selector.selector(
+            {"select": {"options": DEFAULT_BAUD_SPEEDS}}
+        ),
+    }
+)
 
 
 async def get_imei_from_config(hass: core.HomeAssistant, data):
@@ -21,13 +29,17 @@ async def get_imei_from_config(hass: core.HomeAssistant, data):
     Data has the keys from DATA_SCHEMA with values provided by the user.
     """
     device = data[CONF_DEVICE]
-    config = {"Device": device, "Connection": "at"}
+    connection_mode = "at"
+    baud_speed = data.get(CONF_BAUD_SPEED, DEFAULT_BAUD_SPEED)
+    if baud_speed != DEFAULT_BAUD_SPEED:
+        connection_mode += baud_speed
+    config = {"Device": device, "Connection": connection_mode}
     gateway = await create_sms_gateway(config, hass)
     if not gateway:
         raise CannotConnect
     try:
         imei = await gateway.get_imei_async()
-    except gammu.GSMError as err:
+    except gammu.GSMError as err:  # pylint: disable=no-member
         raise CannotConnect from err
     finally:
         await gateway.terminate_async()
diff --git a/homeassistant/components/sms/const.py b/homeassistant/components/sms/const.py
index ab2c15a0c49..7c40a04073c 100644
--- a/homeassistant/components/sms/const.py
+++ b/homeassistant/components/sms/const.py
@@ -3,3 +3,27 @@
 DOMAIN = "sms"
 SMS_GATEWAY = "SMS_GATEWAY"
 SMS_STATE_UNREAD = "UnRead"
+CONF_BAUD_SPEED = "baud_speed"
+DEFAULT_BAUD_SPEED = "0"
+DEFAULT_BAUD_SPEEDS = [
+    {"value": DEFAULT_BAUD_SPEED, "label": "Auto"},
+    {"value": "50", "label": "50"},
+    {"value": "75", "label": "75"},
+    {"value": "110", "label": "110"},
+    {"value": "134", "label": "134"},
+    {"value": "150", "label": "150"},
+    {"value": "200", "label": "200"},
+    {"value": "300", "label": "300"},
+    {"value": "600", "label": "600"},
+    {"value": "1200", "label": "1200"},
+    {"value": "1800", "label": "1800"},
+    {"value": "2400", "label": "2400"},
+    {"value": "4800", "label": "4800"},
+    {"value": "9600", "label": "9600"},
+    {"value": "19200", "label": "19200"},
+    {"value": "28800", "label": "28800"},
+    {"value": "38400", "label": "38400"},
+    {"value": "57600", "label": "57600"},
+    {"value": "76800", "label": "76800"},
+    {"value": "115200", "label": "115200"},
+]
diff --git a/homeassistant/components/sms/gateway.py b/homeassistant/components/sms/gateway.py
index bd8d2f365c9..09992600943 100644
--- a/homeassistant/components/sms/gateway.py
+++ b/homeassistant/components/sms/gateway.py
@@ -16,6 +16,7 @@ class Gateway:
 
     def __init__(self, config, hass):
         """Initialize the sms gateway."""
+        _LOGGER.debug("Init with connection mode:%s", config["Connection"])
         self._worker = GammuAsyncWorker(self.sms_pull)
         self._worker.configure(config)
         self._hass = hass
diff --git a/homeassistant/components/sms/strings.json b/homeassistant/components/sms/strings.json
index 872cb17cbea..b4a9279845d 100644
--- a/homeassistant/components/sms/strings.json
+++ b/homeassistant/components/sms/strings.json
@@ -3,7 +3,10 @@
     "step": {
       "user": {
         "title": "Connect to the modem",
-        "data": { "device": "Device" }
+        "data": {
+          "device": "Device",
+          "baud_speed": "Baud Speed"
+        }
       }
     },
     "error": {