Not sure these sentences make sense. But I wouldn't call it a free upgrade in any way.
I have a 6S Plus. I got it on an installment plan. I paid 11 or 12 installments. To upgrade to the iPhone 7 Plus I had two options:
1. I could pay AT&T to the point where I could trade in (not sure if I was already at that point) and then GIVE them my 6S Plus for the right to get a 7 Plus (pay the tax and a $40 upgrade fee), and then start making installments again,
OR
2. I could pay the phone off, sell it, hopefully at some profit over what I just paid and then I can get a 7 Plus (again paying just the tax and $40 upgrade free), and start making installments again.
I chose #2 knowing that I will likely get more for my iPhone now on the open market than my payoff amount was.
This allows me to continue making payments which I would have had to do, and make a little off my old phone and get the new one.