It means "short message service" and is a text messaging service component of a cellphone or other communication systems.

If I understand correctly, it refers to a cell phone text message system - or the text message itself. Example: "I will send you an SMS when I get there." It is pronounces as an abbreviation by connecting letter names S-M-S (If I try to transcribe the sounds, it would sound something like this: ehs -ehm -ehs with "h"s mostly silent - they are there to give the proper sound definition to the "e"s) Hope this helps. :)