Indian cellular operators lock horns with TRAI on call-drops penalty

The financial implications are around $8.2 billion per annum, according to operators.

In a jolt to Indian telecommunications companies, the Delhi High Court has declined to issue any order on their plea to quash the ruling of the Telecom Regulatory Authority of India (TRAI) directing mobile service providers to compensate customers for call drops from January 1.

However, the court has issued notices to TRAI to file its response to the petition, and posted the matter for hearing on December 22.

The plea has been filed by the Cellular Operators Association of India, the association of Unified Telecom Service Providers of India, and 21 telcos. In their plea, the telcos said the decision has been issued knowing full well that the laws of physics make it impossible to provide a 100 percent call-drop-free network.

Following complaints from consumer protection groups across the country about the poor quality of services, such as call drops and other network issues, TRAI conducted Independent Drive Tests (IDT) through agencies in Mumbai, Delhi, Kolkata, Pune, Surat, and Bhubhaneswar between July and September to assess network performance.

After holding several rounds of meetings, TRAI directed the telcos on October 16 to compensate consumers with 1 rupee per dropped call, subject to a cap of three dropped calls per day from January 1, 2016.

Terming the order as "mutually contradictory and destructive", the operators sought to quash the TRAI's ruling, but the Delhi High Court refused to intervene in the regulator's decision. Various consumer associations, which had complained to the TRAI regarding call drops, are now planning to implead in the case.

Chairperson and managing trustee of the Chennai-based Consumers Association of India (CAI) Nirmala Desikan said that the service providers cannot refuse the TRAI ruling outright.

"They can negotiate with the stakeholders and reduce the penalty amount," she told ZDNet.

According to Desikan, an estimated 85 percent of mobile phone users in India are prepaid card holders, which means that they have already paid the money to the service providers upon which the latter gets interest.

"There is a built-in mechanism to make more money by these operators, and they have to ensure quality service by investing funds in strengthening the network," she added.

"We do not agree that calling consumers should not be charged for a call that got dropped within five seconds or any time later. The subscriber should be charged for the duration of the call session," Association of Unified Telecom Service Providers of India (AUSPI) secretary general Ashok Sud said.

AUSPI represents mainly CDMA players like Tata Teleservices, Reliance Communications, and Sistema Shyam Teleservices.

The operators have also warned that the mobile tariff would go up if the ruling was implemented, and the industry would have to shell out around $8.2 billion (54,000 crore rupees) per year, even if half of the consumer base in the country faced the call-drop issue. However, the government dismissed this contention, saying it was "exaggerated".

Indian Minister for Communication and Information Technology Ravi Shankar Prasad said that changes in frequencies of access spectrum, shifts in usage patterns, and a shortage of towers contribute to call drops.

"Network optimisation is a continuous process, and the service providers have started optimisation exercise of their network extensively," he added.

If the Delhi High Court upholds TRAI's ruling, the operators can knock on the doors of the Supreme Court of India, and, if they do so, payment of compensation to the aggrieved consumers will be delayed for some time.

The mobile phone subscriber base in India recorded 6.71 percent year-on-year growth to 980.81 million users in Q2 2015. In the first half of 2015, the mobile phone subscriber base in India grew by 36.84 million new mobile phone users, which resulted in 6.72 percent growth compared to the same duration last year, according to TRAI.