That's just a marketing gimmick. It doesn't cost 99p any more than any handset on a contract costs nothing. The network, or the retailer, subsidises it because if we had to pay out the true cost of a handset, mobile phone use would never have spread at anything like the pace it has done since the mid 90s.
The fact that retailers and networks are becoming more willing to subsidize PAYG handsets to a similar level as contract ones simply betrays how much of a kicking the industry has taken in the recession. Clearly, people are cutting back on their phone use and PAYG is where its at.
Me, I ditched my last contract phone many years ago. It's a mug's game.
