In Denmark you get two options, you can buy an unlocked phone with cash. Or purchase a subscription with it, and the provider gives you some incentive for it. The subscription is locked for 6 months which is the max by law.

If I buy a phone with the subscription, the discount means you would usually pay 80% of the phones value.

That locks you to a subscription for 6 months that is usually more expensive than the other offers out there, but the difference doesn’t make up for the reduced price of the phone over the 6 month period.

So you are actually saving money, as long as you remember to switch to a cheaper subscription after the 6 months pass. The telecom of course hopes you don’t, and that’s their incentive for taking a hit on profit in the short term. It buys them marketshare.