It's just because it matters more that we have all of our contacts than save $20 a month. I think you'd need higher priced SMS or a very large WhatsApp userbase.
I'm way above that, yet I opted for the pay per text plan and paid 20 cents per text. All my friends made fun of me, but I saved a few dollars since iMessage didn't count toward my costs. However, it effected how people without iPhones would naturally choose to interact with me.
Basically, everyone loves iMessage, but no one thinks twice about alternatives. The general assumption seems to be that it's a god given right that you can send a text to a phone number. iMessage did such wonders obscuring that, whereas having to actually download some other app unveils everything.
Even if you are at poverty level and qualify for a free phone (through the Lifelink program, or 'Obamaphone') you still get something like 250 texts included with that
In India, you generally pay per text message - so if you can convince even 3 of your close friends to start using Whatsapp, you save (say) 20% of your phone bill.
Here in US, if you are going to send more than a few texts a month, you are going to be paying 20 USD. So there is no real monetary incentive (initially) for you and two of your friends to switch to Whatsapp.
Edit: Moreover, the telecoms do make money on the data plans don't they?
That charge will come to each user of the group whenever a message (%160 chars) is sent.
http://telecomtalk.info/tata-docomo-launches-unlimited-whats...
SMS costs Rs1 per
We also have SMS packs like 100 SMS a month by paying Rs 40 or so. But a DoT rule (which was actually twisted and misinterpreted by telecos) make that plan ineffective on any festive day and on those days you pay for each SMS and the rate is almost double or x3 or sometime x4 of what you would have paid without the SMS pack :-)
Essentially WhatsApp is free messaging as long as you have a internet connection. And that's pretty cheap these days.