Why is it that PAY AS YOU GO mobile is cheaper than HANDSETS only?

I am going to the Philippines for 4 mos. and have a Pay as you go phone QUAD band bought in the UK, if my credit runs low how can I top it up? Also, after my holiday I would like to give my phone to my friend. Is there anyway he can use it and change the SIM card?Why is it that PAY AS YOU GO mobile is cheaper than HANDSETS only?
Both pay as you go, and subscription phones are partly subsidised by the service provider, because without the handset, they would not be able to earn money by offering the service. The price of the handset, if bought independently of a service provider would have to cover the entire cost of manufacture.



Some service providers allow a user to nominate a bank account or debit card to be used to top up credit by calling a specified number. You would be able to call this number from wherever you are in the world, and thus top up your credit. However, using a UK phone, whilst in the Philippines is going to cost considerably more than at home, so you would be better advised to buy a local SIM card in the Philippines, and use that whilst you are there. Obviously. you would need to let your contacts know your new (temporary) number.



If you give your phone to someone else, after your holiday, that person can set up his own account (Pay as You Go, or Subscription) with another service provider, and put his new SIM card into your old phone. However, as handsets are subsidised when they are bought from a service provider, and consequently cheaper than when bought outrght, this might not be so beneficial, if you are going to have to buy another handset, yourself. Why not make use of the subsidy and get a new one more cheaply? You could always sell it if you don't want it!