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T-Mobile calls AT&T's new plans confusing, expensive

T-Mobile doesn't waste any time bashing AT&T's new no-contract phone plans and says families can still save more on its own plans.

T-Mobile USA

T-Mobile's got some harsh words for the changes to AT&T's no-contract service plans.

Calling them confusing and expensive, T-Mobile marketing executive Andrew Sherrard said in an e-mail to CNET that the "'me-too' off-contract rate plan misses the mark."

AT&T earlier on Thursday unveiled changes to its mobile share plans that would offer savings to people who sign up for the service without signing a contract, meaning they pay full price for a new phone, bring their phone, or sign up for the monthly installment program, AT&T Next.

The plans, which involved a large and confusing series of changes to different elements of AT&T's offering, do offer savings to no-contract customers. But AT&T also made some changes to the terms for contract plans, including moving to a flat-rate $40 fee to add a smartphone to its plans and away from a variable rate that had many families paying as little as $30 per device.

So for some families with a contract plan, which gets the benefit of lower cost, subsidized phones, the changes would actually mean a hike in the total price.

It's that point that T-Mobile focused on as it countered AT&T's new plans.

"After you do the complicated math, in multiple cases, these new plans are actually a price hike for customers," Sherrard said.

Sherrard added a family of four can save more than $600 in the first year with T-Mobile's Simple Choice plan.

AT&T's move to lower its off-contract pricing comes after criticism that the carrier never separated the off-contract plans with off-contract phones. Contract phone plans are more expensive because of the subsidy that carriers offer to lower the price of a phone. But if a customer declines the subsidy and pays for the full price of the phone, they should logically benefit from a lower price in the service plan, something both T-Mobile and Sprint offer.

AT&T is finally following suit and lowering the prices of its no-contract plans, but financially speaking, Sprint and T-Mobile both still offer a better deal.