Pay-monthly customers on mobile network Three will see their bills rise by 2.6% next month in line with inflation - even if they're in the middle of their contract term.

The change will affect pay-monthly phone and mobile broadband customers whose current Three contract started on or after 29 May 2015. Pay-as-you-go and SIM-only customers, plus those whose current contract started before then, aren't affected.

The price increase follows similar inflation-led rises from Vodafone, EE and O2 announced earlier this year.

In your contract's minimum term? You CAN'T leave penalty-free

Under regulator Ofcom's rules, customers can leave mobile, landline or broadband contracts penalty-free if a provider ups prices mid-term – but only if your current contract started before 23 January 2014 or if it didn't warn you about the rise when you took out the contract.

Here are your options:

  • If you're within your minimum term: Three's pay-monthly contracts DO allow it to increase the monthly cost each may by an amount up to the January Retail Price Index (RPI) rate of inflation (2.6%). So customers seeking to leave while still in their minimum term will be hit by exit fees. Typically you'll have to pay for the remaining months of your minimum term, and sometimes a cancellation fee is payable on top.
  • If you're outside your minimum term: You can leave penalty-free – though you have to give 30 days' notice.

Remember if you're unhappy with the price hikes, it's still important to check rival providers' prices before quitting in anger as you may already be on the cheapest deal for your needs. See our 30+ Cheap Mobile Tips and Cheap Sim-only Deals guides for full help.

Even if you're not able to leave penalty-free, price rises are useful haggling ammunition so you may be able to sweet-talk your way to a better deal. See our Mobile Phone Haggling guide for full help.