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.