How can we set the modem to only allow GSM services?

Use the +CGCLASS command:

AT+CGCLASS? (will tell you which class is currently selected)
AT+CGCLASS="B" (will change the class to GSM/GPRS)
AT+CGCLASS="CG" (will change the class to GPRS only)
AT+CGCLASS="CC" (will change the class to GSM only)