I would be wary about taking up cashback offers. In my experience, you have to be absolutely precise in sending back your bills at the right time, and recorded mail, or they will just not process it.
As far as hidden costs, you are covered for internet, which is usually a common complaint as they charge by the MB if you do not have it as part of your package. Only charge that was added to mine was when they started to encourage people to sign up for paperless bills, I was charged £1.50 for a paper one for a while before I realised.
All in all, I think contracts are better, just make sure you send your bills in to get your cashback. If you are paying £30 a month for it then that is a rotten deal.