If telcos compensate for call drops,they can't recover it: HC

Delhi High Court today observed that if telecom operators were compelled to compensate consumers for call drops as per the new TRAI regulations, they would not be able to recover it if the rule was set aside in future.
A bench of Chief Justice G Rohini and Justice Jayant Nath also said it did not appear that the Telecom Regulatory Authority of India (TRAI) had considered the objections raised by the cellular operators against the compensatory regulation which mandates them to pay consumers one rupee per call drop experienced on their networks, subject to a cap of Rs 3 a day.

The bench, however, agreed with TRAI that the regulator had the power to make the present regulation, which aimed at compensating consumers for the call drops.
In his response, Additional Solicitor General (ASG) P S Narasimha, appearing for TRAI, said a technical consultation paper was sent to all stakeholders, including telecom firms, on the call drops issue and all their representations were considered before the rule was made.
The ASG said the compensatory rule was made due to consumer complaints that call drops were happening more often and added that the call drops amounted to the service providers "breaching" the contract they have with the users.

He also said the rule was formulated in order to ensure that the telcos invested more and to make them fall in line and provide better service to consumers.

Narasimha contended that currently, the telecom firms were not compensating consumers for call drops by taking advantage of TRAI's undertaking that it would not take coercive steps against them and said the regulation has to be implemented.
Senior advocate Abhishek Manu Singhvi, appearing for the telecom majors, contended that under the Quality of Service regulations, which are to be adhered to as part of the licence conditions, two per cent of call drops are exempted.

(Reopens LGD11)
Singhvi told the court that the companies would incur huge loss if they pay the compensation as call drops could occur for no fault in their service.
Narasimha, in response, said in the first quarter of 2015 there were
around 25,787 crore outgoing calls on the network of the 12 licencees/operators and the number of call drops came were 200 crore, whereas the revenue of the service providers was Rs 36,787 crore for the same period.
He said the compensation payable would be only a "flea bite" and thus the regulation must come into force and added that the consumers are demanding that they be compensated for every dropped call, but TRAI has capped it at three.

Singhvi, on the other hand, argued that at the end of a month, consumers would be more interested in lesser call drops in the next month and not in collecting compensation.
He said all the telecom majors want to reduce call drops and were working towards that in a phased manner.
There cannot be seamless connectivity when travelling from area to area and even under the quality of service regulations, the companies are required to maintain 90 per cent coverage, he said.
He contended that the regulation was arbitrary and unreasonable and had no legislative sanction and added that the call drops was occurring due to lack of towers.

On the issue of the regulation being arbitrary, Narasimha said the rule was not an exercise in executive power but was subordinate/delegated legislation and so the question of arbitrariness and unreasonableness does not apply.
After hearing arguments for over two hours, the court listed the matter for further hearing on January 11.
The court was hearing pleas filed by Cellular Operators Association of India (COAI), Association of Unified Telecom Service Providers of India (AUSPI) and 21 telecom operators, challenging TRAI's October 16, 2015, rule mandating them to pay consumers one rupee per call drop experienced on their networks, subject to a cap of Rs 3 a day.

TRAI, yesterday, in an affidavit had told the court that the telecom companies failed to keep investments commensurate with the pace of increase in usage and growth in number of subscribers being added by them.
It had also said that lack of investment by telecom firms in network infrastructure like mobile towers, appears to be the main reason behind the "pervasive problem" of call drops across the country.