In this case, the cell phone uses the voice channel to transmit an analog signal (much like a fax). This has the disadvantages of possible lost bits due to line quality and other problems that are characteristic of analog communications, but it is probably the best option in terms of cell phone compatibility.
http://plosone.org/article/info:doi/10.1371/journal.pone.0002075#article1.body1.sec3.p9

This idea is correct: it would be possible to convert the digital data into an "audio" signal, input the audio signal to the cell phone's microphone jack, and then the cell phone would transmit this "audio" to the remote side for analysis. Yes, it is true that the digital->"audio" conversion would introduce some loss. However the biggest obstacle is the encoding of the audio data in the cell phone network: cell phones today use digital speech encoding (not analog) and the digital speech encoding is both lossy and based on perceptual speech models. Even simple DTMF (touch tone) keypad tones do not transmit well when sent through a cell phone's digital speech encoding (GSM encoders, etc), and keypad tones are relatively simple (two sine waves summed together). Thus, the real bottleneck is the analog->compressed digital encoding->analog conversion. The D-A quantization isn't even that bad, in comparison to the perceptual voice encoders/decoders which will completely corrupt the data. (FYI, I am an electrical engineer with lots of telecom experience.)

Fax, for example, can not operate over a cell phone at any rate over 1200 baud reliably (even though the fax itself might operate at 9600 to 14400). In order to "send fax over cell phone", a separate re-encoding step is used, which bypasses the analog channel. In VoIP tests, which use better voice encoders than cell phone networks (more bandwidth is available), the maximum fax transmission speed using an analog channel, is 2400 bps, unless special processing is done.

Long winded, though there it is... using the analog input of a cell phone to pass data over a cell phone network just won't work.

Using SMS is also unreliable in a cell phone network since there is no acknowledgement within the system or between networks; so data can be lost or delayed or re-ordered. This can be managed through redundancy, though it's best to use a standard data protocol (email, TCP/IP, etc). For this, an "open" cell phone provider is needed, which doesn't lock down services.