Hi there
Simple MATHS shows why companies LOVE subscription services.
Unlocked phone say costs 400 USD. Pay as you go sim -- up to you. Say 30 USD - you could easily make this last MONTHS if you use the Voice over IP stuff too. That's using the Internet for voice calls.
Contract say FREE phone and 40 USD per month ==> even in a YEAR that's 480 USD. 2nd year even more profit as that's 960 USD !!!!.
What a lot of people don't seem to realize either is that you can use a smart phone on the INTERNET without even having a SIM CARD in it !! so long as you can connect to wifi --so services like Skype can cheapen the whole thing considerably. A Pay as you go SIM used sensibly with VOIP services like SKYPE is IMO a MUCH more sensible way of paying for mobiles.
If you travel a lot too don't forget very good tax free deals you get at International airports etc.
A monthly contract is really an EXPENSIVE way of paying for mobile service - especially if most of your stuff is Internet rather than purely telephone related. Also look at things like Internet instant messaging and SKYPE.
For those who don't understand about VOIP ( essentially using the Internet instead of the mobile providers 3/4G service for voice calls) and its possibilities this article is good (providing you ignore all the commercials about UK broadband providers -- the actual bits about VOIP are informative).
Guide to VoIP - MoneySuperMarket
Cheers
jimbo