SMS rate hike for senders
"but in the USA contracts specify an allowance of voice minutes and text messages, with deductions made for both outgoing and incoming communications"
Minor correction, they usually do. US Cellular for sure has free incoming texts and calls, and a few other smaller cell companies have free incoming for at least one or the other.
"Given that a GPS phone call uses about 14kbps"... (I assume you mean GSM) a CDMA call actually averages about 6kbps. The "old" CDMA codec was 13kbps fixed, and the newer ones are 8.5kbps full rate, with half, quarter, 1/8th and "null" rates available. (Quarter, 1/8th and null are for giving the call some background noise when the person's not talking). In the US, due to AT&T's crazy amounts of half rate codec usage, the GSM calls probably average about 6kbps on their GSM network as well (although they are using full rate only on 3G for now.) This of course doesn't invalidate the point, SMS rates here are through the roof!
It sounds like this sucks to me, I'm not at all for driving useful SMS services out of the market. I have kind of wondered what the business model WAS for some of these free SMS services though.. do twitter, 4info, etc., manage to answer your question AND squeeze and ad into 160 chars, or how do they get any revenue whatsoever?