In Italy most phones are sold unsubsidized. It's the exception rather than the rule to see subsidized prices. In Austria, I would say it was about 50/50.
The US is pretty weird for mobile stuff. Here in Europe, as far as I know, you basically just pop a different SIM in a phone and everything pretty much works. Also, you don't pay when someone calls you.
By the way, that's why it was easy for Twitter to provide free sms forwarding in US (first). Operators would easily agree - they'll get the money from recipient.
