Ok. In South Africa, you sign a contract with a service provider of your choice. They give you a cell phone free, which you can upgrade every two years upon signing a new contract.
If you do not sign a contract with a service provider, you can buy a starter kit and a phone , and then buy airtime with a certain value and load the airtime on the phone. Once you have spend ( talked) all the airtime, you need to buy more airtime to use the phone again. If you have a cellphone contract, you get unlimmited airtime, and get a bill at the end of the month.
Does it work the same way here. Hope this is more clear.