As expected, a start up in europe is offering free ad supported mobile phones to teens/young adults in europe.

“Blyk is a pan-European free mobile operator for young people, funded by advertising. We’re launching first in the UK market in mid-2007, with other markets to follow.
Blyk is an innovative mobile media channel for advertisers. We offer brands an opportunity for direct engagement with a young audience with real-time feedback”

http://about.blyk.com/