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The new plans part from a tradition among U.S. service providers that gives customers free or subsidized phones in exchange for locking them into service plans for several years. Instead of asking customers to pay for phones up front, the cost of the phones in this style of plan is reflected in the service fees.
T-Mobile's new plans, which will be available July 24, give customers an option to pay a lower fee if they opt out of the subsidy. The plans require a two-year agreement.
As All Things D points out, T-Mobile isn't the first U.S. carrier to offer this type of plan. Metro PCS, Leap Wireless and many of the prepaid arms of the major carriers also structure fees this way.