Yeah. That's exactly how it works. Me and all my friends have top-models of different brands, and I don't know a single person who paid anything upfront. HTC One here - 30 pounds a month contract. Iphone 5S - 35 pounds a month contract. LG G3 - 28 pounds a month. All of these prices roughly translate into $50/month - so why would you pay anything upfront?? And just because a phone costs $600 on the retail market don't assume that operators pay anywhere near that.

Just to drive gambiting's point home, here's EE's phone selection: http://shop.ee.co.uk/mobile-phones/pay-monthly/gallery

The nearest to the $200 upfront is the £150 upfront for the "iPhone 6 plus 128GB", although that's then about $100 a month. For the very latest top-end phone. All the others have tiny or zero upfront fees.

Alright, I wasn't entirely clear - yes, you can get a cheaper contract and pay a bit upfront for the phone - but I don't know literally anyone who does that. At least in the UK since you can get pretty much any phone model for 30-35 pounds a month people just do that rather than get a 20 pounds/month contract and pay anything upfront for the phone.