The Supreme Court today decided to continue its hearing in the call drop case on March 15, 2016.
The apex court was hearing an appeal by telecom operators against a Delhi High Court order over compensation for call drops. The High Court had upheld telecom regulator's decision for a compensation of Re 1 for call drops.
The apex court asked telecom companies to give an undertaking that call drop rates had not exceeded the 2% threshold. It also asked these firms to give an assurance that no penalty was ever levied on them for call drops.
Earlier this week (on March 7), telecom operators had approached the Telecom Regulatory Authority of India (Trai), asking it not to enforce the regulation on compensation for call drops till the hearing in Supreme Court.
The telecom regulator had asked all telecom service providers for a compliance report on the readiness in their networks for offering compensation to the mobile users for call drops by March 7, which has been extended to March 14.
On March 4, the Supreme Court refused to grant interim relief to the operators while listing the case for hearing. The operators had challenged Trai’s regulation in the high court here, which, in turn, dismissed the telcos petition, following which the operators went to the Supreme Court last week.
In October last year, Trai had come out with the regulation which was to come into effect from January 1, mandating operators to give one rupee for every call drop to the user, with a maximum of three per day.
The telcos had termed the regulation as arbitrary and whimsical, contending that providing compensation to consumers amounted to interfering with the companies' tariff structure, which could only be done by an order, and not by any regulation.
Trai had told the High Court that consumers have a right to get compensated for call drops and this was different from the quality of service guidelines that cellular service providers have to follow under the licence conditions. However, telcos had argued that even if consumers were facing problems, a regulation without statutory backing cannot be created.
According to analysts, if Trai’s regulation is implemented, it could lead to a decline of 7-8% in the operating income of telecom operators. However, for companies that had a call drop rate of 2% or below — as was mandated earlier — will see a negative impact of 3-4% on their operating income. Interestingly, the new regulation does not allow leeway of 2% call drops, which means the regulator expects the network to be perfect and telcos to pay for every call drop.
Communications and Information Technology Minister Ravi Shankar Prasad had recently said, “During the past six months, nearly 20,000 sites have been added for 2G (second generation) services across India. Similarly, nearly 45,000 sites have been added for 3G services.”
The government has been asking operators to invest in infrastructure to improve the quality of services, while operators say spectrum crunch is a major problem for call drops scenario.