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  Business   Telcos defy regulator on call drop penalty

Telcos defy regulator on call drop penalty

Published : Jan 3, 2016, 11:56 pm IST
Updated : Jan 3, 2016, 11:56 pm IST

Rule effective from Jan. 1, but telcos await court orders

Phone tower.jpg
 Phone tower.jpg

Rule effective from Jan. 1, but telcos await court orders

Telecom regulator and telecom operators are set to clash over regulation to pay Rs 1 as compensation to consumer from January 1.


While Trai has written to operators to comply with the order from January 1, service providers have maintained that compensation to subscribers will be paid only after court orders them to do so.

According to sources, Trai has written to all telecom operators reminding them about call drop regulations, expecting them to have already put in place all mechanisms to comply with the order.

Telecom operators, who have challenged the order in Delhi High Court, said that the matter is sub-judice and they will compensate consumers when the court directs them to do so.

Trai had submitted before the court that it will not take any coercive action against the telecom operators till the next date of hearing on January 6.

“Any coercive action for us means to even comply with the regulation. As of today the telecom operators are not ready to implement it because of various complexities that we brought to the notice of the court,” said an official from the telecom operators association.

In October 2015, Trai had come out with regulation making it mandatory for the operators to pay Rs 1 as compensation for every call drop to consumer from January 1.

The regulation, however, capped the compensation paid to each subscriber to only three calls drops a day.

The regulator acted against the telecom operators after Prime Minister Narendra Modi expressed his displeasure over the rate of call drops in the country.

Telecom operators claimed that the annual industry compensation due to dropped calls may range from Rs 10,000 crore even if only 10 per cent of subscribers claim the compensation. The figure could hit Rs 54,000 crores in case 50 percent of subscribers claim it.

“Moreover, even if the call drop rate is one per cent (which is within the two per cent benchmark prescribed by Trai), operators will still be required to provide compensation to the tune of Rs 1,083 crore which is 0.9 per cent of voice revenues,” said the operators.

However, Trai has said that maximum outgo under the rule in a year would be around Rs 800 crore if networks are not improved.

Location: India, Delhi, New Delhi