Business is booming for the big three multimedia companies - Sky, Virgin Media and BT. People are catching on to the idea that bundling together telephone, internet and TV accounts into one contract saves time and effort, and also money.
Customers who opt to bundle their services are saving on average £270 a year, according to comparison website simplifydigital.com.
A bundle works by one company, such as Sky, providing a package of all three services - telephone, internet and television - for a single monthly charge of about £30.
You can then tailor your package with extras, such as premium TV channels or a higher download limit, for an additional fee. "The advantage of bundles is that if you pick the right package, you can save money and hassle by dealing with just one provider," says Ernest Doku, spokesperson for uSwitch.com.
These deals have grown rapidly in popularity and, as a result, the three bundle providers have been busy slashing prices to lure new customers. "The discounting has been intense since the beginning of the year," says Charlie Ponsonby, chief executive of simplifydigital.com.
Separate internet, phone and TV services generally cost more than bundle deals. For example, a Sky Entertainment TV package would cost you £20 a month. Add to this £14.50 for 30Mb broadband internet from Virgin Media and unlimited calls from BT at £16.90 a month, and you're paying nearly £20 more than you would on the average bundle deal. So on a simple cost basis, bundling is the way to go.
Who should you sign up with?
On face value, Sky tends to be the most expensive provider, with an average monthly charge of £38, while BT is the cheapest, with packages from as little as £30.
But there are lots of hidden charges to consider. You'll have to pay for installation, as well as activation and disconnection fees. There's also a charge if you don't pay via direct debit. For example, Virgin Media charges an extra £5 a month to customers who opt to pay on receipt of a bill, and paper bills will incur a further £1.75 each month.
As a result of these extra fees, it can be hard to establish the actual cost of a package. Sky, Virgin Media and BT also offer a plentitude of attractive deals to new customers, which can mask the actual amount you'll end up paying for the duration of your contract.
All three offer discounted rates for the first few months of your contract before bumping up the bills. So when you are comparing bundles, add up the monthly fees for the first year and the various installation and activation fees, then compare that figure so you are comparing like with like. Don't get suckered in by a rock-bottom monthly figure.
For example, a basic package from Virgin Media is half price for the first six months and £20 thereafter (plus a £13.90 line rental charge). This works out at £346.80 for the year as well as a £49.95 set up fee. On this basis, BT offers the cheapest bundle deal, which costs £367 for the year.
Find a suitable package
Make sure the offer you sign up to meets your needs. As most contracts are set for a minimum of 12 months, it's important to get this right from the start. Each bundle offers different broadband speeds and download limits, varying home phone services and huge differences in the type of TV package and the channels on offer.
"It is harder to compare bundles than standalone broadband packages, so ask yourself a few questions to avoid getting lured into an unsuitable contract. If, for example, you only use your home phone outside working hours then an off-peak call bundle will save you money. If you make a lot of calls during the day, an anytime calls offer would be a better choice," says Doku.
Before you sign up, look at what you're already using and what you need. If you want premium Sky channels, don't sign up to an 18-month BT contract. Similarly, if you want ultra-fast broadband, don't sign up to a basic Sky package that only offers 14Mb broadband speeds.
"If you want 'full monty' web access, you will be looking for an ultra-fast connection and unlimited downloads. And if this is what you're after, you need look no further than Virgin Media," says Ponsonby. The company "leads the way in ultra-fast broadband", he says, having launched up to 100Mb broadband in the UK this year. But it's only available in areas that are connected to its fibre-optic broadband network - you can check if your house is eligible at virginmedia.com.
Similarly, Sky provides the widest range of TV channels and has exclusive access to stations such as Sky Atlantic, which shows popular programmes including Mad Men, and SkySports F1, but as Sky typically has higher charges it's only worth getting if you're going to use these extras.
Is availability an issue?
Availability is another important consideration, and where you live may greatly affect what services you can get. This was the case for Ebonie Allard, 31, from Eastbourne, who wasn't able to sign up to Sky because of the high trees in her garden that affected the signal. She also couldn't get a full service from Virgin Media as her house wasn't connected to its fibre-optic network.
"In the end, my only choice was BT, but the whole set-up process has been easy and, for the fi rst time ever, all my media services seem to be working well," she says.
Ebonie now pays £41 a month for her bundled package and says: "It's much easier having internet, TV and phone with the same company. When I set it up it saved a lot of my time. I only had to call one person, rather than ringing around three different call centres, and, touch wood, the service so far has been reliable," she adds.
Before you sign on the dotted line...
It's important to pick the right bundle as these deals are notoriously diffi cult to get out of once you've signed on the dotted line. Although the industry regulator Ofcom banned companies from automatically renewing home phone and broadband contracts, most bundles last a minimum of 12 months and you will be charged a hefty penalty if you want to cancel before the end of the contract.
Providers have to offer a two-week cooling off period, and some allow longer, but check all your costs will be refunded if you change your mind. For example, Sky won't refund any installation or setup fees if you cancel within a month of signing up.
If you've been on a bundle deal but you want to swap to a better option with another provider, and are able to do so, you need to ask your current provider for your Migration Authorisation Code (MAC).
This is unique to each customer's home line and allows you to switch internet service providers easily. Once you've asked for this, your provider should give it to you within five working days and it's then valid for 30 days.
The new provider should give you a transfer date and the whole process should take around three weeks.
Choosing a bundle will save you money but you need to do your homework before signing up. The best all-rounder is Virgin Media, with reasonable charges, fast broadband and a reliable TV and phone package.
However, it's not available everywhere. The next best option is Sky, if you're after premium sports and film channels, but you'll pay top dollar for the privilege. BT provides a good basic service at the cheapest cost.