Office 365 Exchange Online SMS distribution groups and contacts

Creating SMS contacts in Exchange Online using powershell 

Administrators can use powershell to create SMS contacts which are hidden from the shared address book but which can be added to distribution groups in Exchange online.

Administrators who have not had experience with Powershell Exchange Online Management should refer to this first About the Exchange Online PowerShell V2 module | Microsoft Docs  

This Youtube may help you also  How to Connect to Exchange Online via PowerShell - Install the Exchange Online Management v2 Module - YouTube.  You may be forced to install NUGET as part of the initial process.    

If you are connected to Exchange online your details of your mailbox should appear. 

Now you can look at this Microsoft article  Bulk import external contacts to Exchange Online - Microsoft 365 Compliance | Microsoft Docs 

Note: if this is the only use of contacts and you want to hide those contacts from the shared address book (GAL) the following command will hide all entries.  

Bulk adding of contacts to a distribution group is possible using Powershell.  Refer to the latest Microsoft documentation.