Network pricing model explained?

As far as i understand this: (using O2 prices as example)
£35.00x18mth Contract + £99.00 = 600mins + 500txt + free internet + 8gb iphone
£20.00x1mth Contract = 600mins + 600txt + free internet
Cost of iphone to customer over 18mth = £15.00x18 + £99 = £369.00
Effect of taking contract is like taking out a loan for the outstanding cost of the phone spread over 18mth. add on the cost of call plan = cost per month
Reason for no early upgrades : O2 pays cost price of iphone on day one, recoups £99 on day one, recoups £15 per month from then on .. iphone cost payed off after 16mths.
This is not an exact science, but if you do the math for all other call plans/models you get rougly the same answers.
You want the new iphone every year? sign up for the 24mth business plan (new phone every 12mths)
cant comment on AT&T pricing but must have very similar figures behind it.
Comments?

I don't if your numbers are right, but you got the gist of it. You are paying back the carrier over X amount of months for the rest of the cost of the phone they had to pay to the phone manufacturer.

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