I bought my daughter an iphone (unsubsidized) as a Christmas present from parents, grandparents, etc... pooled the resources. In return, she pays the prepaid plan. Turns out she is a mustachian at heart--despite the gross luxury that is an iphone, she probably only spends about $10-15 a month on the phone bill. She does not have data, but relies on available wifi networks at her school, home, and city. She finds ways to use free application to do free stuff that would otherwise cost a lot of money. could she get by with a less expensive phone... hell yeah she could. However, the real cost in communication is the recurring monthly bill, and she has that nailed.
I do not know what she pays for the phone, because she essentially gets ~$85 a week allowance. Before you go nuts, in this $85 she must pay for transport, food, clothing, and all other sundry parts of her consumer life. She lives far away from us going to a the best high school in her country (which turns out to be free because it is in Europe)--so I take the approach of having her learn how to manage her money. it is on autopilot, and she just has to decide what is important to her. I think this is the best way to build the old frugality muscle--