Twelve was the age for both my girls to get phones. With DD#1, we were very paranoid about the same things that concern you - will she waste time, spend too much time texting, take the phone to places where she shouldn't have it, etc. So we limited her to 400 texts/month. She was very careful and did not go over, so for her 13th birthday, she got unlimited texting.
We discovered something that several other posters have mentioned; the phone is not a necessity, but so what! Adults tend to think of a phone the way we think of the power bill or the water bill - as a utility. Something we only pay for because we NEED it. But kids see their phones as toys. Yes, they communicate with them and they are very useful to us as parents (another discovery - we liked her having the phone as much as she did) and we also discovered how useful texting can be, dispite thinking it was silly before.
So if you wouldn't hesitate to give your child a DSi or a Wii for Christmas, why not a phone? So what if she plays games on it (as long as it's not instead of doing homework)? How is that different from playing games on a Wii? Isn't that a waste of time too? But it's fun, we love our Wii. Everthing in life doesn't have to be done for some higher purpose. Having fun IS a legitimate use for an item.
As for texting, if your DD is at a concert or football game where it's impossible to hear, texting is the only way to communicate. It's also discreet. I can get a text from my DD at work and reply quickly, and it takes a tiny fraction of the time that a call would take. Finally, this hasn't happened to us yet, but if DD ever finds herself in a situation where she is uncomfortable and wants to come home, she can text us and none of her friends would be the wiser.
Finally, what the kids are telling you is true. I'm not normally in favor of getting something because everyone else has one, but all the other kids really do have phones, and the ones who don't feel left out. It is how they communicate.
