No, you're still paying $649 for the phone even if you get it for $199 up front. You are paying back that balance over the 2 year contract, even if AT&T and Verizon don't say it, you are. The difference is that T-Mobile is telling you how much it is, while the others aren't.
Plus with T-Mobile when the interest free loan is paid off in 24 months your monthly payments lower by $20/month. Not the case with AT&T, Verizon or Sprint.