Except it is not free. You pay for the phone in monthly installments when you pay your phone bill.
So, at the end of two years, you'll be paying the same amount for your phone bill and have a subsidized device.
That's just because of how ubiquitous the subsidized phone model already is.
For example, since I'm sharing a plan with my family, the ATT contract comes out to around 20% cheaper than a similar contractless byo device Virgin Mobile service for iPhones, upgrading only after the contract is up.
Trust me, you're being ripped off.
I bought the phone outright. Most telcos would make me pay $80 per month over a couple of years to get the subsidized phone. A much more expensive deal for something I don't want.