Roll back call drop penalty: Telcos to Trai

Also say compensation will negatively impact interests of consumers and service providers

Telecom operators have asked the Telecom Regulatory Authority of India (Trai) to withdraw the regulation for mandatory compensation for call drops.

On October 15, Trai had mandated telcos to pay subscribers Rs 1 for every call drop on their network, subject to a cap of three call drops a day, starting from January 1, 2016. According to the norms, telcos must intimate prepaid customers through SMS or unstructured supplementary service data within four hours of a call drop, and mention the amount credited. For post-paid customers, the details of the credit should be provided in the next bill.

The Cellular Operators Association of India and the Association of Unified Telecom Service Providers of India have written to Trai, saying the regulator’s order for compensation will force them to increase rates to recover costs. The letter comes ahead of a meeting of telcos with Trai chief R S Sharma on the issue of call drops on October 29.

For the sector, the annual compensation due to dropped calls might range from Rs 10,000 crore (in case 10 per cent of subscribers claim compensation) to Rs 54,000 crore (50 per cent of subscribers claiming compensation).

Also, according to independent estimates, the regulation for compensation on call drops would lead to a three per cent hit on revenue and seven-eight per cent hit on the mobile earnings before interest, tax, depreciation and amortisation of telecom players, the letter said.

“The regulation is based on the flawed assumption of the existence of an ideal 100 per cent faultless coverage, with no rogue elements misusing the regulation, while the regulation is practically an invitation for limitless misuse and gaming of the system,” it added.  Also, the letter comes ahead of a meeting of telcos with Sharma on October 29 on the issue of call drops. The licences of telcos mandate a progressive increment of the coverage of 50 per cent of district headquarters (DHQs), in a licensed service area, over a period, with at least 90 per cent coverage in each DHQ.

“The compensation policy would also increase disputes, consumer mistrust and costs,” the letter said, adding, “It would result in a sharp increase in call drops, as countless customers will cause the calls to drop to obtain Rs  3 a day as compensation.

“The physics of radio waves and their propagation characteristics limits the efficiency of a communication system to less than 100 per cent, even if infinite resources are assigned, which is why two per cent call drops have been accepted as a global norm. This acceptance of two per cent call drop as a grade of service is an outcome not of deficient resources or effort, but of the physics of radio wave propagation in free space,” the letter said. India-specific factors such as short and interference-prone spectrum and difficulties in sites increased the constraints, it added.

In a hyper-competitive telecom market, with mobile number portability, there was no exit barrier for customers, the letter said. “They are free to subscribe or not, and to choose from as many as 10-12 service providers. But there can be no legitimate basis for a consumer not to exercise his or her choice than to expect compensation from a fully compliant service provider.”

On October 15, Telecom Regulatory Authority of India (Trai) mandated telcos to pay subscribers Rs 1 for every call drop they experience on their network, subject to a cap of three call drops a day, starting from January 1, 2016. As per the rules, telcos must intimate prepaid customers through SMS or USSD within four hours after a call drop, and the details of amount credited. For post-paid customers, the details of the credit should be provided in the next bill.