Call drops compensation to burn deep hole in pockets: Telecom industry

The telecom industry may need to shell out between Rs.10,000-54,000 crore annually as compensation for call drops, according to an industry estimate submitted to the government on Friday.

"The annual industry compensation due to dropped calls may range from Rs.10,000 crore in case 10 percent of subscribers claim compensation to Rs.54,000 crore in case 50 percent of subscribers claim the same," said the Cellular Operators' Association of India (COAI) and Association of Unified Telecom Service Providers of India (AUSPI) in a joint letter to Communications Minister Ravi Shankar Prasad.

Telecom regulator - Telecom Regulatory Authority of India (TRAI) - on October 16 mobile phone operators have to compensate subscribers on call drops from January 1 next year at the rate of a rupee for each such failure.

"We have highlighted to TRAI that the cost of this regulation on the service provider will be onerous and that instead of achieving the objective of improvement in call drops will lead to loss of revenues, lesser investments, higher costs and encourage malpractices and ultimately result in huge increase in calls drops," said the associations in the letter.

"While the industry is fully committed to resolving the problem, and work towards fulfillment of prime minister's vision of Digital India, as a result of this regulation, operator's ability to make further investments in expansion of service will come under severe pressure and hence will negatively impact PM's vision of Digital India," they added.