Problem in using Xdata Memory

Hi all...
I have a very small issue....
i have written a code to send messages through SIM800 using SST89E516RD2 microcontroller.
code is:-

#include <sst89e516rd2.h>
sbit row0=P2^4;
sbit row1=P2^5;
sbit row2=P2^6;
sbit row3=P2^7;
sfr COL=0xA0;

unsigned char *message = "Hi Everybody ";   // Content of the message to be sent

int keypad();
void sendsms();
void puts(unsigned char* ptr);
void putc(unsigned char chr);
void initialize();

unsigned char CTRLZ = 0x1A;

unsigned char  xdata phoneno[10]; //Array to store the phone no.

void main()                                             // MAIN STARTS HERE
{
unsigned int i,j;
 while(1)
   {
     for(j=0;j<10;j++)
        {
        phoneno[i]=keypad();   // Entering new company phone no
        LCD_putc(phoneno[i]);
        i++;
        }
        i=0;
        initialize();
        msdelay(1000);
        sendsms();
    }
}

void sendsms()
{
 puts("ATE0\r");
 msdelay(1000);
 puts("AT\r");
 msdelay(1000);
 puts("AT+CMGF=1\r");
 msdelay(1000);
 puts("AT+CMGS=\"");
 puts(phoneno);
 puts("\"");
 puts("\r");
 msdelay(1000);
 puts(message);
 msdelay(1000);
 putc(CTRLZ);
}

int keypad()
 {
   unsigned char dat[4][4]={'1','2','3','A',     // assigning key matrix
                            '4','5','6','B',
                            '7','8','9','-',
                            '*','0','#','+',
                                                               };
 unsigned char colloc,rowloc;
 COL=0xFF;
 row0=0;
 row1=0;
 row2=0;
 row3=0;
  while(1)
   do
   {
    row0=0;
    row1=0;
    row2=0;
    row3=0;
    colloc=COL;
    colloc&=0x0F;
    }
    while(colloc!=0x0F);
    do
     {
      do
        {
        msdelay(10);
        colloc=COL;
        colloc&=0x0F;
        }
     while(colloc==0x0F);
     msdelay(10);
     colloc=COL;
     colloc&=0x0F;
    }
  while(colloc==0x0F);
  while(1)
   {
     row0=0;
     row1=1;
     row2=1;
     row3=1;
     msdelay(5);
     colloc=COL;
     colloc&=0x0F;
     if(colloc!=0x0F)
      {
        rowloc=0;
        break;
      }
     row0=1;
     row1=0;
     row2=1;
     row3=1;
     msdelay(5);
     colloc=COL;
     colloc&=0x0F;
   if(colloc!=0x0F)
    {
    rowloc=1;
    break;
    }
   row0=1;
   row1=1;
   row2=0;
   row3=1;
   msdelay(5);
   colloc=COL;
   colloc&=0x0F;
  if(colloc!=0x0F)
   {
    rowloc=2;
    break;
   }
   row0=1;
   row1=1;
   row2=1;
   row3=0;
  msdelay(5);
  colloc=COL;
  colloc&=0x0F;
if(colloc!=0x0F)
  {
      rowloc=3;
      break;
  }
 }
   if(colloc==0x0E)
   return(dat[rowloc][0]);
   else if(colloc==0x0D)
   return(dat[rowloc][1]);
   else if(colloc==0x0B)
   return(dat[rowloc][2]);
   else
   return(dat[rowloc][3]);
}
}

void puts(char* p)
{
 char *temp = p;          /*temp pointer so that the actual pointer is not displaced */
 while(*temp != 0x00)
 {
  putc(*temp);
  temp++;
 }
}

void putc(unsigned char chr)
{
 SBUF = chr;
 while(TI==0);            /*Wait until the character is completely sent */
 TI=0;                    /*Reset the flag */
}
                                                                // MAIN ENDS HERE
void initialize()
{
 SCON  = 0x50;   /*SCON: mode 1, 8-bit UART, enable receive      */
 TMOD |= 0x20;   /*TMOD: timer 1, mode 2, 8-bit                  */
 TH1   = 0xFD;   /*TH1:  for 9600 baud                           */
 TR1   = 1;      /*TR1:  timer 1 run                             */
}

void msdelay(unsigned int value)
{
 unsigned int i,j;
 for(i=0;i<value;i++)
 for(j=0;j<100;j++);
}

Now my problem is when i change
unsigned char Xdata phone[10]; to unsigned char phoneno[10];
i GSM module send me the messages...
but if i write
unsigned char Xdata phoneno[10];
the GSM modem does not send any messages.
the system only works and sends messages when array phoneno[10] is stores in DATA instead of XDATA.
why does this happen....
can you please help me....