It’s essentially a payment plan here in the US. Switch to a new carrier, get an iPhone for free as long as you stay subscribed to their most expensive tier for a year. How it usually works is that the phone is sold to you on an installment plan, say $80 per month, and the “free” part of that is where they also give you an $80 bill credit each month. If you cancel early then you have to pay off the remaining balance of the phone in a lump sum.