"You could enable any phone to be a receiver for SMS and literally see the network traffic around you on the SMS paging channel. The phone real time operating system actually discards messages that do not match your number ..."

This is literally true, and actually, you can do it with an SDR device and the GNURadio liveCD.

However, this data will all be encrypted. Even on 2G networks, you can't just camp at a cellular base station and watch SMS fly by ...