Yes, they will be visible, but I'm talking about SMSs without ASCII chars except spaces/numbers/dots/commas/etc. In that case all words (in national language for example) will not be visible at VTY and user will see many '?' symbols if change non-ascii chars to '?' and spaces/comms/etc, and I think such representation of original text will be not very good (if I correctly understand your first comment).
ok then, why not print your message about encoded type to VTY, but store message in sms.txt. the gsm340_rx_sms_deliver() function could take two arguments, one text for the vty and one to store.