'I read that as "Make SIM only contracts a shed load more expensive".'
True, that's what will happen, knowing the telcos managerial ethos. But it'll be a huge error, as it will open the doors for small, inexpensive, SIM only telcos. Nowadays, the phone "renting" model is a huge barrier for small new telcos to enter the market, as it forces on them a ton of personnel, bureaucracy, service centres, CSR facilities and 'shops' where the punters can "purchase" the phones.
I expect this to evolve into another situation where big companies greed -big telcos greed in this case- cause them to repeatedly shoot themselves in the foot.