There are no other costs associated with buying an unlocked iPhone. What you need however is a nano sim card or a trimmed down micro sim to activate the phone and be able to use it. AT&T offers prepaid Gophone Nano sims for the iPhone 5 and I know T-Mobile offers nano sims for prepaid plans as well. iPhones bought with a contract are called "subsidized phones" because you're tied to a contract and you pay for the phone little by little throughout the contract period, hence why it is cheap when you buy it with a contract. The unlocked iPhone is great though, I have a 32GB and it feels great just paying $25 for 3 months and use my minutes and texts whenever I feel like it, heck I could go 6 months without using up minutes/texts/data and still keep my number, I've saved a lot of money by going unlocked and not tying myself to a contract. Besides an unlocked iPhone allows you to use it internationally when you travel.
