Supreme Court’s verdict on call drops expected today

By: | Updated: March 10, 2016 10:19 AM

Thursday could be the verdict day for the months-old dispute between the Telecom Regulatory Authority of India (Trai) and mobile operators on whether the former has the right to bring in a regulation which mandates the latter to monetarily compensate subscribers for call drops.

Call drop issueThe new rules framed by the Trai provides that mobile users will get a compensation of Rs 1 for every dropped call, with a maximum for three dropped calls in a day.

Thursday could be the verdict day for the months-old dispute between the Telecom Regulatory Authority of India (Trai) and mobile operators on whether the former has the right to bring in a regulation which mandates the latter to monetarily compensate subscribers for call drops. The Supreme Court, which had on March 4 declined to stay the Delhi High Court order upholding the regulation, will be hearing the matter and is expected to pass the final order.

The regulation came into effect from January 1 but so far, the operators have not started compensating the subscribers as they had challenged the order in the high court and the Trai had decided not to prosecute them till the final order came. The Delhi High Court rejected the operators’ plea on February 29, after which they appealed in the SC. Though the Trai had asked the operators to file their report on call drops compensation by Monday, it has given them time till Thursday upon the latter’s request that the matter is coming up for hearing in the apex court.

The new rules framed by the Trai provides that mobile users will get a compensation of Rs 1 for every dropped call, with a maximum for three dropped calls in a day. Effectively this means that a maximum amount of Rs 3 will be credited into the consumers’ account in a day for call drops.

The operators have challenged this stating that this is against the licensing condition as there’s nothing as 100% coverage. Technology provides for a certain percentage of call drops, like around 2%. Further, there’s no provision for 100% in-building coverage. They have also argued that call drops were beyond their control because they had less than required spectrum as a result of government’s policy and its inability to provide space to put up sufficient towers.

According to Trai, most of the operators have consistently failed to meet the call drop limits in the drive tests conducted by it. It has said that if the operators have entered into a contract with the subscribers to offer services and fails to do so, it is bound to monetarily compensate them.

The telecom industry has cited a potential annual loss of Rs 10,000 crore if 10% of the subscribers seek compensation, which can go up to Rs 54,000 crore if 50% subscribers are to be compensated. The Trai has, however, disputed the amount and says it would be around Rs 800 crore. Brokerage firm Credit Suisse has estimated that the regulation could shave off close to 3% of revenue and 7-8% of Ebitda of the mobile operators.

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