Twitter pulled the plug on its outbound text messaging service for all of the UK last Thursday, saying the service was simply causing it to lose too much money. Needless to say, the decision drew plenty of negative reaction from users who came to rely on their text-based Tweets.

Now, though, two new companies have surfaced with hopes of filling the gap. TweetSMS first showed its face a few days ago, as profiled on Mashable. The soon-to-launch site promises to send individual, hourly, or daily SMS updates for “a very small fee.” TweetSMS’s site isn’t live yet but indicates it is coming “very soon.”

One step ahead, Australian-based TwitSMS made its debut over the weekend and is now fully functional. Founder Jeff Bonnes — a Twitter user himself — said he was annoyed at the discontinued SMS service and decided to take action, piecing his business together with his wife in a matter of days. TwitSMS is charging £0.07 per message for UK-based users. Australians will pay $0.11 AUD per text. The messages have to be purchased in advance packages of 100, 200, or 500.

In the meantime, BusinessWeek is predicting more changes ahead for Twitter users worldwide. The site has to find a way, it says, to start pulling in the dough. Its prediction? First banner ads, then possibly contextual ads within messages — and ultimately, BusinessWeek suspects, a full acquisition and integration into another existing service.

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The reason all comes down to cash, the service says. Twitter was evidently able to create cost-effective deals with mobile providers in the three countries mentioned above, but never in the UK. Right now, the company says it’s paying an average of $1,000 per user every year there, and that’s if each user sticks to 250 or less received messages a week.

“We took a risk hoping to bring more nations onboard and more mobile operators around to our way of thinking but we’ve arrived at a point where the responsible thing to do is slow our costs and take a different approach,” the official memo reads.

The move is certainly leading to some renewed cries of “Twitter is dead!” But is it?

There are really three things that could come from this:

1. 1) Twitter suffers a significant user loss in the UK as people jump ship following the cutback.
2. 2) Twitter sees only a minimal difference, as the prevalence of smartphones enables many people to use the service on-the-go via a browser rather than via SMS.
3. 3) Twitter gets overwhelmed with negative response and decides to reinstate the service with a subscription fee of some sort.

It’s actually rather surprising that the company didn’t try #3 first. Will that end up being its alternative, and would people get on-board with the idea of a monthly SMS fee — similar perhaps to what mobile carriers charge for text use?

If we accept the fact that the free SMS service is gone, it seems like a combination of #2 with the option of #3 would be Twitter’s best bet to keep as much of its current UK-based userbase as possible.

A related note: Twitter has indicated that it’s working on negotiations to bring cost-effective SMS service to Australia. It’s also planning to add local service numbers to undisclosed “countries throughout Europe” in the coming weeks.

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