What does Instant Savings with Contract mean?

Http://www.att.com/shop/wireless/devices/apple/iphone/5-16gb-white-refurb.html#fbid=Pp2YZyxG-bJ

I want to buy a phone from AT&T and it says the price is $149.99. The regular price was $599.99 and subtracted $450.00 with the instant saving with contract. I used to have Verizon but decided to switch to AT&T so I do not already have a contract with them. Does the instant saving with contract mean I have to have already a contract with them so the phone would cost $149.99?

No. You get the low price because you are agreeing to a new 2 year contract with an early termination fee.