There are ads like every 3 songs on mobile. That would make someone like me either pay for their $4.99 service, (which I didn't even realize existed until recently because they only seem to advertise their $9.99 service) or use something else.
The ads are mostly regionally targeted/restricted so users might not see them if they have the right IP. E.g. in Canada and France I can't recall hearing an ad but they spammed me in the US until I finally paid.
I don't think they have ads in all countries. I live in Norway and have not heard a single ad. When I was in the UK a couple of months ago, I received ads.