Crunching the numbers, it was much much cheaper for me getting this phone on contract then any other route. I did look at buying a phone separately and having SIM-only or PAYGo. (UK, about 3 years ago, low-mid range). With 18 month contract I basically got a 'free' phone with 13MP camera.

I actually use a SIM only by swapping sims with my wife whose phone we bought outright (but it's low end - camera and screen are poor).