The fall-out from the recent ban of bulk SMS in India serves as a dramatic reminder about just how entrenched those 160 characters have become in the daily lives of both people and businesses the world over.

When the Indian government banned application to person SMS messaging, people immediately stopped receiving notifications that transactions had taken place on their bank accounts. Railway ticket confirmations and schedule changes simply weren’t delivered. Equity traders were cut off from the information lifeline that is their business. Companies needed to rely on other, less immediate and less mobile, channels of communication to be alerted to problems on their servers.

The ban was put in place in advance of a ruling in the controversial Ayodhya land dispute. In 1992 a Hindu group destroyed the 16th century Babri Mosque, believing it was built on the birthplace of Hindu god, Ram. This led to violent clashes between Muslims and Hindus. An Indian court is set to rule imminently on whether plans to build a Hindu temple on the site can go ahead, and the Indian government, fearing further violence, banned bulk SMSs in the country in an attempt to cut communication between religious extremists on both sides who may want to provoke a violent protest.

Similarly, closer to home, the Mozambican government shut down SMS for a period during the recent food riots in that country, in an attempt to muzzle the public which were coordinating the violent demonstrations using SMS.

After lobbying from the network operators and the Indian Reserve Bank, the Indian Department of Telecom (DoT) later relaxed the ban to exclude transaction messages and network performance notifiers sent directly by the operators. The network operators have been warned they will be responsible for any content sent over their network and that the SMS ban still applies to messages sent via third party aggregators, or WASPs (wireless application service providers).

This decision is problematic for a number of reasons. Firstly, because many transaction-based messages are sent via aggregators, and it’s impossible to distinguish between these messages and others. The new ruling hasn’t done much to alleviate the situation.

In addition, the network operators are unhappy that they will be responsible for the content of messages that they didn’t originate and are merely delivering on behalf of the sender. Also, media reports say the operators stand to lose up to Rs 10 crore ($2.2 million) a week from lost revenue because the aggregators will not be buying bulk SMS capacity from them.

And finally, this doesn’t even seem to be an effective way to prevent the public from communicating and coordinating civil unrest, as person to person SMS is still available.

At the moment, the verdict on the court case has been postponed and it’s unclear for how long the bulk SMS ban will be in place. In the meantime Indian businesses are losing money and the Indian people are at risk of fraud. (You can be sure criminals are rubbing their hands together in glee at this opportunity to bypass one of the most effective banking security measures: SMS notifications.)

If indeed we needed a reminder about how entrenched SMS is in our daily lives, this is certainly it. If something similar had happened in South Africa, online banking would be effectively crippled. Without one-time passwords (OTP) sent via SMS we would be unable to add or pay recipients. We wouldn’t know if our accounts were being accessed without authorisation, or if our credit cards had been cloned or stolen and then used by criminals. Medical, security and educational initiatives that rely on SMS as being the best way to reach their communities would be hamstrung. Not to mention the less “serious” but still useful services we have come to rely on, from weather reports on the go, to reminders of doctors’ appointments.

It’s also clear to what extent SMS plays a role in the democratisation of information. With a straightforward SMS-enabled cell phone, citizens can publish information to large groups, and even the world, at the press of a button. We’ve seen the impact of social media in undermining governments’ attempts to control or hide information – this is becoming an increasingly difficult thing for governments to do without serious consequences. Take a look at a service such as Ushahidi.com, which crowd sources crisis information from people on the ground via SMS, email and the Web, to form detailed pictures of what is going on in crisis situations ranging from political unrest to natural disasters.

While the Indian government’s intentions behind the ban were well meaning, this somewhat kneejerk response may very well do more damage than good. But it certainly does highlight the extent to which SMS has become part of our society’s DNA.