There are two types of mobile plans, they are contract and pay as you go. Both of them have their own advantages and it is quite difficult to compare them.

First let us take a look at the contract phones. These phones have a billing system as payment method. The users need to sign a 12 to 18 months contract and it can be extended. Connection will be availed instantly after signing the contract. Users will get a monthly bill. The bill is charged on the basis of number of calls made, number of messages sent, and many other factors.
Service providers also attract customers by giving free gifts. You can also get other free facilities, free talk time, free SMS and other facilities. Contract phones are more commonly used by those people who use mobile phones extensively and almost all the popular models of all the leading mobile manufacturers come with these deals.

The pay as you go phones also commonly referred to prepaid mobile phone handsets coming with these deals require payment in advance. These are more commonly used by students or people who do not use mobile phones extensively. The major advantage is that you can control your expenses by knowing the balance.
One feature that attracts lots of customers towards these gadgets is that you can change the service provider anytime according to your requirements and needs. Also, in these deals the users are not bound to any contract. A lot of offers are also given by the service providers in the pay as you go phones such as: number of free SMS, free calls and more.

We can clearly see the differences between contract phones and pay as you go phones. Both of them have their plus points and the users will have to see their requirements and budget before they choose one of them.