More like interest free loan these days from AT&T. Their new plan, that is. Also, I did walk away from my contract on my 4S s couple years back. I had to pay off the contract, yes, but it was hardly paying more than if I was paying off the remainder of what the phone cost.
Edit: Also, it was still a subsidy.
Well, around I have to take the $75 dollar plan while I'm on a $49 dollar plan right now which has everything the same except 3GB more of data that I don't need.
$624 (26*24) + $265 = $893 (off contract price is $749)
So, I'm paying $624 for $487, you can guess that this is NOT 0% interest.
That's about 1.95% per month interest.
If I actually needed, the extra data it would tend towards a 0% loan, but not quite.
BTW, that's the definition of subsidize (not even the main one) "pay part of the cost of producing (something) to reduce prices for the buyer."
Example : subsidized housing, subsidized food, etc.
So, were do telecoms company actually pay anything? You have to give all the money back and more. So, indeed THERE IS NO SUBSIDY. You can believe the marketing crap that abuses the English language those companies shove in your gullible ears if you want, but that's all you.