BT customers have been urged to switch suppliers after the telecoms giant announced its second increase in line rental charges in 18 months. a move branded as a "tax on broadband".

BT's price rises amount to an increase nearly eight times the rate of inflation.

BT announced that from January 1, all its 13.8 million "Together Option 1" customers, will have to pay line rental of £11 a month, a hike of £1.50 per month on the charge they were paying 18 months ago. The latest 50p a month increase will result in consumers paying an extra £83 million a year.

The move followed Ofcom’s announcement that BT’s Wholesale Line Rental (WLR) product has finally met the "fit-for-purpose" criteria agreed in 2003. WLR allows BT’s competitors to offer customers a single bill for line rental as well as calls. One of the incentives for BT to meet these criteria was the relaxation of Ofcom's restrictions on the price of line rental.

But Jon Miller, the director of price comparison service uSwitch, said the news was a "real blow" for BT’s customers. "With most of their competitors reducing their line rental costs, BT customers can feel justifiably aggrieved at having to pay extra while seemingly receiving nothing in return".

Mr Miller called on BT’s millions of customers to shake off their apathy and switch to one of the many alternative providers that do not charge such "hefty upfront" fees.

"There are now an increasing number of providers in this market, offering alternative line rental to BT, such as household-names like Homecall, Onetel, the Post Office and TalkTalk," he said. "Customers can now shop around for savings on line rental as well as calls."

The decision also affects the 3.7 million customers that use alternative suppliers for their calls, but still pay line rental to BT

Kerry Ritz, the managing director of Vonage UK, a broadband phone company, said BT's line rental charges already amounted to a tax on broadband and the latest increase was "a slap in the face for consumers".

"BT's decision will depress rather than accelerate the adoption of new technologies such as internet telephony," he said. "Prices in the telecoms sector are all declining apart from this one area of access. Not by coincidence, access is one of the few areas where BT still has a monopoly.

"There is insufficient competition in the provision of access and BT's monopoly of the UK's copper wires is ensuring that consumers are losing out.

"Why should consumers have to pay £11 per month for a BT telephone line when they use other companies for broadband access and internet telephony?" he asked.

But Giles Deards, a spokesman for BT, defended the move, saying the price increase was the result of the regulatory settlement with Ofcom.

"Ofcom wants to encourage competition at the wholesale level so it has asked for a margin between our wholesale and retail offering. We have already reduced the wholesale price and it would be wrong to push it down any further bearing in mind that Ofcom is still consulting on the issue and will come back with the outcome in January.

"No one is penalised by this move, we will give every penny of the money back to our customers - for example we have just introduced friends and family auto update."

BT previously increased line rental in June 2004 from £9.50 to £10.50, when they migrated all of their standard tariff customers to "Together Option 1".