Back in October last year, you may remember that Google announced a slew of updates for its Hangouts Android app, including SMS integration. This basically meant that you send both SMS messages AND Hangout messages from the app. This feature shall remain.
However, Google also had a separate SMS for Hangouts feature (only available in some countries), letting you add your phone number to receive messages from Google+ Hangouts as an SMS. This was essentially aimed at feature-phone users in developing markets across parts of Asia and Africa, where internet penetration may not be what it was elsewhere in the world, and was similar to the Gmail SMS service it launched back in 2012.
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Now, as the unofficial Google Operating System blog notes, it looks like the SMS for Hangouts feature is being discontinued from July 2. We’ve reached out to Google for more details on this, and to establish any reasons for the discontinuation. It could well be that just not enough people used it.