Pretty much, what it does is just take the subsidized price that most carriers use and not hide the actual phone price in their monthly service plan. As a slight example, you get a phone on Vzw for $199 and a monthly service plan at $75. If you keep the phone past the end of your contract you keep paying $75/month.
On T-Mo, you would pay $599 for the phone outright, or pay $199 down, pay $50 for the monthly service plan, and a $25/month towards the phone. Once the phone is paid off, your bill goes down to the $50/month service fee. You could actually save money the longer you keep the phone.
To stay competitive, the prices will work out to be about the same per month. They are just wording it differently. The actual price of the phone doesn't get hidden in the service price.