With the likes of the iPhone 4, HTC Desire HD and the newest Windows Phone 7 mobile phones demanding either high prices or a lengthy and expensive 24 month contract, is one of the many sim only deals a better way to go. The likes of O2, T-Mobile, Orange and Vodafone all offer sim only contract deals, but shop around and you might find something even better.
For example, Tesco Mobile offer a brilliant 30 day contract sim only package. For just £15 per month you get 500 minutes of talk time, unlimited texts and 500MB of data allowance. This is very appealing to many as you are not committing to a long term contract. This leaves the user free to change phones when a new one is launched and take their sim card and number with them. It also allows easy changing to another provider if a better deal comes along.
On a personal note, when the iPhone first came out I signed up for a contract and was really annoyed that a new model of iPhone came out before my contract had run its entirety. Ever since I have only ever used sim only deals and purchased my handsets elsewhere.