Telcos may soon have to compensate customers for call drops

Claiming that call drops is a quality of service issue, the Telecom Regulatory Authority of India (TRAI) has issued regulations on standards of quality of service.As per these regulations, financial disincentive is imposed on cellular telephone service providers for "non-compliance with the benchmarks for network-related parameters at the rate of Rs 50,000 per parameter for violation of the first instance and Rs 1 lakh per parameter for violation of subsequent instances. For non-compliance with customer-related parameters the financial disincentives imposed is Rs 50,000 per parameter," the TRAI release said.TRAI has further said that repeat offenders may have to shell out up to Rs 2 lakh by way of penalty.The Telecom Regulatory Authority of India (TRAI) through its audits has found that despite repeated requests by the government, there has been no improvement in the call drop situation. Finally biting the bullet, the government has also decided to make it mandatory for telecom companies to compensate customers for call drops, sources say. Interestingly, existing players such as Telenor already compensate their customers for any inconvenience of this nature.While compensation to customers may not result in a severe financial blow, but the penalties are a different matter altogether.

The regulatory authority had conducted independent audits in Mumbai and Delhi in the months of June and July and called it unsatisfactory.TRAI has also conducted open house discussions on the issue where all stakeholders including mobile operators and consumer groups expressed their views.

Obviously, telecom operators on their part have been vociferously opposing any such move, involving compensation for call drops. They have been saying that there are many things that are responsible for call drops and not all are under their control, including lack of spectrum, government removing towers claiming them to be illegal, among others. But the government as well as the regulatory authority has maintained that telecom companies are not doing enough by way of network expansion.

COAI's Rajan Mathews says it is inaccurate for the government to say that telecom companies are not making investments. "We own the problem, we will fix the problem and we are focussed on the problem and we are not running away from taking responsibility," he told CNBC-TV18. He says foreign investments in telecom have gone up from USD 2 billion to USD 7-8 billion, and hence to say that we are not bringing in investment is not correct. Also, according to him, after bidding so aggressively for spectrum (over Rs 1000 crore), the entire argument that telecom companies are not or will not invest in towers and infrastructure, which will ultimately bring in revenues, does not ring right.