Normally when taking out a phone contract with a "free gift", you have to apply for the free gift through the supplier with confirmation that you have purchased the phone (or in this case taken out the contract). The gift will then be sent separately once the supplier receive confirmation.
Because of this, it may be that the monthly payment is slightly higher due to the "free" gift. It's very much personal preference though. As with any monthly contract, the cost of purchasing any phone through this method, generally works out more expensive than buying outright in one payment. The same thing applies to any promotional gifts.
Hope this helps