Why is it cheaper ...

[SaxyJag]

... to buy a pay-as-you-go mobile phone with new SIM card etc. than it is to buy a handset only?

[CheekyChops]

I would imagine that the service provider subsidises the cost of the phone. For example, if you but an orange payg phone, you will (usually) be making calls through the orange network so they make their money back that way.

[ugly_bob]

and you'll probably find that the handset is network locked. If you buy the handset only, it will be free to use with any network

[SaxyJag]

I had thought of both these possibilities, so it looks likes my question's answered.

Thanks guys.