You're partially correct in that you would still be "paying" for the phone through your contract, but once you get the phone, you own it, but because most contr

You're partially correct in that you would still be "paying" for the phone through your contract, but once you get the phone, you own it, but because most contracts state that if you were to cancel your contract before its completion, you would have to pay a cancellation fee, most of which would be the "subsidy" portion for your phone. This is to prevent people from getting iphone 5s for free and then running off with them and selling them on craigslist or china for $1000 (which you'd probably still make money even if you paid the $600 or $700 cancellation fee)