A couple of months ago, I renewed my contract. Was offered the latest mobiles and explained that my current mobile does everything I need. I am simply not interested in phone cameras/MP3 players/etc.
Vodaphone then offered me the same contract but at half the price if I did not upgrade the phone as they cover the cost of a new phone in the monthly contract [total saving = £240 pa]
So, I agree - no such thing as a free lunch!!