The Future of Mobile Teleco

Just announced today, T-Mobile will start offering reduced plans with no contracts or no commitments. What is the catch now? They want you to a bring your old phone to them, and use it on their network. No longer are the days where carriers will provide a highly subsided phone in exchange for a one or two year commitment. Is this a new way the mobile / wireless industry is going, or is it just competition for the lowest rates, and how to survive in this economy.