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Call drops: Trai asks telcos to pay Rs 800 crore as compensation to consumers

According to a rejoinder filed in the high court on January 6, 2015, COAI stated that Trai must act as a facilitator for development of cellular services and not be a "sleeping trustee."

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Mobile phone users may have to wait till Monday for any relief or compensation for the calls dropped by telephone service providers. The High Court bench comprising Chief Justice G Rohini and Justice Jayanth Nath deferred their judgement and are likely to rule on this matter on January 11, where telecom operators would have to pay consumers Re 1 for every call dropped (with a cap of three calls a day) from January 1, 2016, as directed by Telecom Regulatory Authority India (Trai).

Calling it a problem that was "pervasive across the country," Trai defended it's decision to penalise the network service providers for the call drops. This penalty was challenged by the Cellular Operators of India (COAI) a coalition of private cellular operators claiming it was arbitrary and in violation of Article 14, 19 & 265.

According to a rejoinder filed in the high court on January 6, 2015, COAI stated that Trai must act as a facilitator for development of cellular services and not be a "sleeping trustee."

"According to the data submitted by Trai, the cellular operators are well within the permissable limit for exemption of call drops. Call drops are approximately 0.77% per quarter, which is well within the permissible 2% allowed by the regulators," Abhishek Manu Singhvi, one of the counsels for the COAI argued. He went on to add that as per the licence conditions put forth, the telephone service providers are obliged to maintain 90% service area of the area to be covered (for metros), which was fulfilled. "It is impossible to achieve 100% connectivity for various reasons, though we submit, that we have fulfilled obligations meted out to us by the regulatory authorities and conditions of the licenses have been met," Singhvi said.

In response to these statements, the additional solicitor general P S Narasimhan, arguing on behalf of Trai said that the regulations were issued after detailed deliberation with various stake holders. He agreed that call drops could be for various reasons that are beyond one's control, hence, Trai had restricted the criteria for compensation to "call drops originating from the service provider." According to the data submitted by Trai, the 12 licensees (telecom operators) have combined outgoing calls at 25,787 crore of which cumulatively around 200 crore were calls drops in the first quarter of 2015. Thus based on this calculation, the compensation amounts to a "mere Rs 800 crore" calculated at Re 1 per call dropped user with a cap at three call drops per day. With industry revenues pegged at Rs36,781 (in the same quarter), the loss of revenue amounted to 0.54%, cumulatively.

According to a technical paper dated November 10, 2015, issued by Trai, all factors causing call drops were attributable to the cellular operators except user action - which includes removal of batteries, insufficient balance etc, and mandated that consumers would be granted relief only in cases relating to calls dropped within its own network.

In a counter affidavit that it submitted, Trai stated that the primary reason for call drops were because of the lack of investment on the part of the service providers. According to a consultation paper "compensation to the consumers in the event of dropped calls" dated September 4, 2015, the investment made in network infrastructure (other than radio spectrum) was 4.6% from Rs 2,02,366 crore in FY 2012-13 to Rs 2,11,691 crore in FY 2013-14 where as the Minutes of Usage grew 6.8% while data usage grew 100%.

Trai also refuted the service providers claims that if the penalty came into effect (Re.1 for every call dropped), they would have to pay almost Rs 54,000 crore per year calling it an "exaggeration" and "appeared to be based on COAI/AUSPI's apprehension that 50% of the consumers would manipulate and misuse the regulation to get Rs 3 everyday from the TSPs."

After hearing arguments from both the parties, the chief justice agreed that perhaps Trai had not considered points raised forth by the service providers though consenting that the authority had the right to penalise the operators. The matter will further be heard on Monday, when the bench is likely to deliver its judgement.

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