BT to increase phone call charges by 5%

BT recently announced increased profits for the first three months of 2011

Telecoms giant BT is to raise call charges for residential customers by up to 5% on 3 December - the second increase this year.

UK landline calls will go up from 7.6p a minute to 7.95p a minute. Line rental prices will also rise, but calls to mobiles will be unchanged.

The changes come after a 10% rise in call charges a year ago, and a 9% increase in April.

But BT said these prices would now be frozen until 2013.

In July, BT group said profits before tax in the three months to 30 June were up 20% to £533m, driven by demand for home broadband products.

Bundles

Under the changes, the cost of line rental for a customer paying by direct debit will rise by 70p to £14.60 a month.

Evening UK calls will go up from 1p a minute to 1.05p a minute. The call set up fee, which is a one-off charge for a call outside of a customer's plan, goes up from 12.5p to 13.1p.

BT's most popular Anytime calls plan will increase by 20p to £4.90 a month, but various other packages and bundles, some of which include broadband internet, will not be changed.

Calls to O2, T-Mobile, Orange and Vodafone mobiles will stay at 5.3p a minute in the evening, and 11.3p a minute in the daytime.

However, there is no guarantee that these prices will be frozen next year.

Competition

The changes come as consumers face rising gas and electricity bills and cuts continue to put a squeeze on family finances.

"We are disappointed that BT is raising its prices on the heels of significant energy price hikes just a month ago," said Michael Phillips, product director at price comparison website Homephonechoices.co.uk.

"While BT's price increases of 5% or less may be in line with inflation, it will prove very unpopular with households who are already feeling the pinch.

"This marks the 10th price rise from a major provider this year alone and it is inevitable that others will further add to this total."

BT said that many of its customers had actually seen their call costs fall because they had moved on to specific packages.

"A report from Ofcom shows the UK has lower prices than the USA, Spain, Germany, France and Italy. The UK market is highly competitive," a BT spokesman said.

He added that many of BT's prices were lower than those charged by other providers.