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If GSM modem has to be used to send SMS, then what are the hardware and software requirements to setup the entire thing?

+4  A: 

You need a GSM modem (mobile handset or similar) attached to the server.

Typically, SMS can be sent by using AT commands on the serial interface of the GSM hardware.

See this tutorial for an example.

David Schmitt
+1  A: 

This library offers a simple interface to send SMSs though a Gsm Modem

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