Radio contacts give you something to do. I don't believe that they are neccessary to play the game, but reporting contacts was something that the real-life radioman would have done. It's a bit like pressing the seatbelt and no smoking button in the cockpit of a Microsoft Flight Simulator jet plane.
That being said, there is anectdotal evidence that calling in radio contacts may bring in Axis bombers that will attempt to kill your contact. I've never seen that myself, and it could just be coincidence, but there you go.
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