Your phone is not subsidized, you borrowed money from the carrier, look up the meaning of subsidy, its a little different from what the carriers are telling you. So what is your first clue of a loan, the answer is, your locked in for time with a plan that includes a minimum payment, say $60 for the iPhone, voice and data, the problem here is that no one has issued an interest rate, does your monthly phone bill include how much of the phone has been paid of, most likely NOT, so why do the carriers do it, its because they can, there are no shortage of people willing to sign up for this, as long as people have the phone their happy, BUT, how much it this really costing you??. When you plop down $199 for an iPhone 5 16 gig, you owe the carrier $500 ETF period, you see, where did the subsidy go?, plus early cancelation fees depending on if or when you cancel. Cell phone contracts have hurt many young users because it their first form of credit, DONT BLOW IT, make sure you can afford it and pay the bill, or make sure you can afford it, when young people get a few years older (and they all do), where they need a car, apartment, or credit card, and they get turned down buy the credit issuer, its not because of a subsidized phone, it because you borrowed money from the carrier and had payment problems, creditors don't care what the carriers called it, to them it was a loan. Young people please take notice because the carriers will report you to credit reporting agencies at the drop of a hat. If you have the money, but the phone outright, there are benefits from many carriers, such as cheaper rates and changing plans when you please.