TRAI's call drop rule a knee-jerk reaction: telcos to HC

Cellular operators today told Delhi High Court that TRAI's call drop compensation regulation was a "knee-jerk reaction", which penalised them without proving any wrong-doing.
Senior advocate Harish Salve, appearing for telecom companies, made the submission before a bench of Chief Justice G Rohini and Justice Jayant Nath, which will tomorrow commence hearing arguments of the Telecom Regulatory Authority of India (TRAI) defending its decision.
The Cellular Operators Association of India (COAI), the Association of Unified Telecom Service Providers of India (AUSPI) and 21 telecom operators, have challenged 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.

Terming the regulation as "arbitrary and whimsical", Salve contended that providing compensation to the consumers amounted to interfering with the companies' tariff structure and this could be done only by an order and not a regulation.
He said the telcos were not breaching licence conditions, as under it, they were required to maintain 90 per cent coverage and two per cent call drops were exempted.
He said the new regulation was a "parallel regime" running along with the quality of service rules.

Salve said the telcos across India had a consumer base of one billion and as per a technical paper of TRAI, 36 per cent of call drops were due to irregular use by consumers.

"Therefore, even if 30 per cent call drops occur, it would mean we have to pay Rs 3 to around 300 million customers which would amount to Rs 90 crore a day...," he said.
Referring to litigations against setting up of mobile
towers on the ground of their environmental impact, the telcos' counsel said while "everyone wants mobile phones, no one wants mobile towers close to their homes".
They told the court that TRAI, instead of bringing the regulation, ought to have involved the Centre, states and civic bodies to come out with a solution, as paying Rs 3 to consumers would not make call drops disappear.

They also said TRAI was not interested in compensating consumers but in penalising the telcos, as under the current tariff regime, pre-paid consumers are billed as per per second pulses and not on minute basis.
On post-paid connections, they said the billing system was complex but per second pulse tariff was also available to consumers.
Singhvi, during arguments, also said the compensation the telcos are mandated to pay amounted to taxation and thus was a violation of Article 265 of the Constitution which stipulates that no tax shall be levied or collected except by authority of law. Tax cannot be imposed by way of a regulation, he said.

TRAI had earlier in an affidavit told the court that 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.
It had also said the compensatory rule was made due to consumer complaints that call drops were happening more often and added that call drops amounted to the service providers "breaching" the contract they have with the users.
It had further said the compensation payable by telcos would be only a "flea bite" and thus the regulation must come into force.
TRAI had told the court that telecom companies had 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.