You are basically getting a no-interest loan. Most people will not realise that they are actually paying for the phone. They will think they just got a cheap phone.
It also creates the illusion that you are in a contract and you cannot leave for 24 months, which most consumers fall for, and it benefits the provider.
If you have not noticed, Koodo's new plans are considerably less expensive than other providers. That is because the added money on the plans you use to pay to pay off a phone was taken off of the plan, making the plan cost less. It still comes up to around the same thing, it just looks different on paper than what it looked like before. Personally, I find the new changes are great. The tab now works the way the customer wants it to work and can put what ever amount they want on the Tab.