BT has announced it is to hike the cost of broadband and calls and begin charging TV customers £3.50 a month for BT Sport. Check if you can find a better deal elsewhere – if so, the good news is those affected can leave their BT contract penalty-free, or you can try to haggle down your bill.

The telecoms giant, which is notifying about 10 million affected customers by letter from Friday 27 January, says the price of broadband and calls will change on 2 April 2017, while the BT Sport charges will apply from 1 August 2017.

However, the price of line rental is being 'frozen' until the end of 2017 at least, and BT also plans to introduce automatic compensation where it fails "to deliver on service promises" later this year.

The announcement signifies BT's third major price hike in just over 18 months, with broadband and landline call costs last increased in July 2016. For how to cut costs and other top pick deals see our Cheap Broadband and Digital TV Deals guides.

How prices are changing

Existing BT customers with broadband and line rental will soon only see a single charge for both services on their bill.

Here's how prices are increasing (BT says the price of broadband for those on introductory/promotional deals won't change):

  • Standard broadband – from 2 April, this will increase by £2/mth. The 'all-in' price, which covers line rental as well, will go from £33.99/mth to £35.99/mth.
  • Fibre broadband – from 2 April, this will increase by £2.50/mth. The 'all-in' price will go from £39.99/mth to £42.49/mth for Infinity 1 packages, and from £51.49/mth to £53.99/mth for Infinity 2.
  • BT Sport via BT TV – until now, this has been free for those with BT TV. However from 1 August there will be a £3.50/mth charge for BT Sport.
  • BT Sport via Sky TV (for those with BT broadband) – from 2 April, those with BT broadband who watch BT Sport on their Sky TV box will face a £1.50/mth increase.
  • BT Sport via Sky TV (for those without BT broadband) – from 2 April, Sky TV customers without BT broadband who pay for the BT Sport add-on will see an increase of £1/mth.

BT is also hiking the cost of calls from 2 April – here's how:

  • Unlimited anytime landline calls package – rising from £8.49/mth to £8.99/mth.
  • Evening and weekend landline calls package – going from £3.50/mth to £3.80/mth.
  • Landline call costs – calls to other landlines will increase from 11p/min to 12p/min; calls to mobiles 15p/min to 16p/min. The call set-up fee is rising from 19p/call to 21p/call.

How to beat the hikes 1 – escape your contract penalty-free

Bear in mind that providers accross the board have been hiking prices so there's little point simply leaving because you're annoyed. But if you can find a cheaper deal elsewhere (see the Cheap Broadband guide for help), the good news is those affected by the hikes WILL be able to escape their BT contract penalty-free.

Under rules from regulator Ofcom, those who have taken out a line rental, broadband or mobile contract since 23 January 2014 can cancel their contract penalty-free if a provider ups its monthly prices mid-term and didn't warn you about the rise when you signed up.

That means anyone with BT broadband (including all those with BT TV, as you need a BT broadband package to get it) or a BT landline can escape penalty free. If you get BT Sport via Sky TV (and don't have BT broadband) you'll have it on either a 30-day or 12-month contract – in either case BT says you'll be able to leave without penalty.

To ensure you can leave penalty-free, you must let BT know you're leaving within 30 days of it giving you official notification of the price rises (which should arrive by letter).

Sadly you won't be able to get a partial refund on your BT package if you paid upfront for a year, eg, if you bought the line rental saver package, and now want to leave your contract.

How to beat the hikes 2 – haggle, haggle, haggle

Alternatively, if you're willing to stick with BT, this is a major chance to haggle a much better deal – especially as you'll have the right to leave penalty-free if they don't give you one.

See our Haggle with BT guide for detailed tips, but for starters here are a few...

  • Benchmark the best deal elsewhere so you ask for a realistic discount.
  • Get through to the retentions (sometimes called disconnections) department. They have the most power to slash costs, as their job is to keep you.
  • Use charm and be friendly. Aggression or anger will just put their back up.
  • Don't panic if they call your bluff and say they'll disconnect you.
  • Problems mean discounts, so if you've had issues with BT in the past – eg, slow broadband – politely tell it when you haggle.
  • You may find that your BT customer service rep will only offer a small discount at first, but if you don't agree with the price use phrases like: "I've worked out my budget, and my absolute max is £[insert price here]/month"; "[Talk Talk/Sky/Virgin] can do it for less"; "I need to think about it".
  • You should never go with the first offer. Chances are, it's not the best deal they can do. Remember, be firm.
  • The salesperson may push you to agree because it's a 'limited-time offer' – don't feel pressured into agreeing to the new price or deal unless you're certain.
  • If they won't slash the price, see if they can include any extras, such as free calls or a boosted TV package that includes BT Sport at no extra charge.
  • Vote with your feet. If you don't get what you want you should seriously consider leaving.

Have other providers hiked prices recently?

BT isn't the only telecoms firm that's been putting prices up. Here's what some of the other major providers have done:

  • TalkTalk. Three million customers saw increases to broadband, line rental and TV packages across the board in November and December.
  • Virgin Media. Home phone, broadband and TV customers saw two hikes in 2016 – prices rose by an average of 5.4% in February and 5.1% in November.
  • Plusnet. Plusnet hiked its home phone and broadband prices for a second consecutive year in 2016, with some customers paying up to £30/year more since 1 September
  • Sky. Sky TV customers were hit by a price hike in June, with the cost for some going up by up to £72/year. Sky will also be increasing the cost of line rental this March, though we don't yet know by how much.