Following the prime minister’s counsel that the issue of call drops be addressed urgently, the Telecom Regulatory Authority of India (Trai) recently released a consultation paper (CP) on compensating consumers in the event of dropped calls. As part of the exercise, Trai conducted “drive-tests” across certain routes in Delhi and Mumbai to assess the intensity of the problem. And to no one’s surprise the result showed that “most operators” fell short of the 98% Quality of Service (QoS) benchmark set by the telecom regulator. The telecom sector, thus, has once again grabbed public attention for the wrong reasons.
Trai’s paper comes at a time when service providers are likely to have very few sympathisers. The suggested remedies, of a zero charge for dropped calls and refunds to customers for past call drops, are just prescription to address the disease of bad service quality and would be welcomed in most quarters. But these are unlikely to deliver us from the malaise, at least not by themselves.
One should keep in mind that the last time Trai initiated refunds was in 2000 when operators moved from the fixed licence fees to a revenue sharing regime. The process occupied significant regulatory resources even at a time when oversight was limited to a few areas. With the unprecedented increase in subscribers and a vast enhancement of the regulatory canvas, one can only guess the cost-benefit of refunds. Prospective penalty on operators for call drops however makes eminent sense. None of this should be taken to mean that operators should be let off the hook. In fact, just the reverse—if their demands for more resources to deliver calls are met (or seem unjustified at the moment), then enforcement for poor quality should be strict and remorseless.
QoS has had a repressed history in India. While it falls squarely within the regulator’s mandate (QoS norms are to be set, ensured and surveyed by Trai), it was not perceived as a matter that merited urgent consideration in the beginning. Much greater attention was paid to tariffs and ensuring competition within the market, the unstated presumption being that quality would be one of the elements that service providers would compete on. This was soon proven to be overly optimistic—even though the first QoS benchmarks were released in July of 2000 with a 36-month window for compliance, follow-up regulations released in 2005 recognised that these were yet to be achieved.
It would be unfair however to criticise Trai for choosing to first focus on pricing-of wholesale and retail in the interest of stimulating competitive outcomes in a concentrated market. QoS monitoring would have been premature involving large amounts of (unavailable) technical data and expertise. For Trai to have focused on QoS from the very beginning would have meant diversion of thin regulatory resources at a time when the complete framework for enforcement itself was quite unclear. Despite issuing regulations for mobile services in 2000, it was only in 2005 that the regulator even recognised that it could impose fines for non-compliance, and only in November of 2012 did regulations finally set down the consequences of failure to meet benchmarks in the form of such fines. For much of the previous decade, the preferred means of addressing quality failure was “naming and shaming” operators who failed to meet benchmarks and the belief that competition and customer churn (later facilitated by Mobile Number Portability) would be sufficient until more tumultuous events at the turn of the decade eclipsed QoS from regulatory focus once again.
Since then, the trust deficits between customers, operators and the government seem to have only widened. Trai explicitly states that it cannot accept individual consumer complaints unless these are of a generic nature. The Kafkaesque subscriber experience with “customer care” representatives makes that an ineffectual option.
Fortuitously, for some customers, the dramatic rise in the popularity of social media platforms—Twitter and Facebook—allows customers to bypass the frustrating, multi-step customer helpline process. A 2011 study by Bain & Company found that customers whose service requests are entertained and addressed using social media can spend significantly more on the company’s services while recent research by professors in the United States indicates that redressal of complaints made on social media triggers a “dual effect” of both improving the customer relationship as well as triggering “chains” of customers voicing their complaints on the platform. The first domino in India’s net neutrality debate—Airtel’s decision, in December last year, to charge for VoIP calls and its speedy volte-face a week later—was the direct result of consumer outrage expressed on social media.
On the other hand, the gulf between operators and the government does not appear to be narrowing. Both DoT and Trai claim that prima facie operators are making insufficient infrastructural investments to efficiently utilise assigned spectrum—in the same breath there is talk of delaying the next round of spectrum allocation until operators “adequately invest in existing airwaves”. The DoT has also asked Trai to look into the existence of tariff plans that might actually incentivise operators to drop calls—an accusation the industry has taken exception to by stating that given competition within the sector, it would be short-sighted to engage in such behaviour and that most customers are already on per-second billing plans (which the CP argues against by stating that this was true for only 59% of total outgoing voice usage for the quarter ending in March 2015). A quick examination of the pan-India numbers comparing the growth in total minutes of use against the number of BTSs reveals that the ratio has remained roughly constant over the last five years. All else equal, increase in the number of BTSs appears to have kept pace with the growth in voice demand.
But ceteris has not been paribus—what’s changed, of course, has been the growth in data. According to Nokia’s 2015 MBit report, the total amount of mobile data across India has increased from 10 petabytes in December 2011 to 85 petabytes in December 2014. And while 3G growth has been faster with users consuming more data on a per capita basis, the large number still dependent on 2G has meant that the overall growth in data usage has so far been evenly divided between the two technologies (though the gap widened in the last year). In this context, the need to use spectrum more suited for voice to carry 2G data is inefficient and currently deployed infrastructure is not enough to service both voice and data. But there may be a limit to the benefits that can accrue from simply adding more BTSs due to interference of closely deployed infrastructure.
Operators, thus, assert that call drops are the inevitable result of inadequate spectrum as well as rising difficulties in installing new cell tower sites and maintaining current ones. Fears of radiation, objections from resident welfare associations, rent-seeking by site owners and orders from local bodies for locking out sites in the absence of a uniform national tower policy are all listed as hurdles outside operator control. If airwaves are to be made less congested, data must be offloaded to optic fibre—of which there is a marked dearth in urban spaces. In this context, the problems of Right of Way that prevent the laying of optical fibre add to India’s infamous costs of doing business.
As is the case often, there may be truth on both sides and thus needs to be carefully drawn out for policy action. Some of the operators’ concerns are acknowledged by the Trai (which is currently working on a paper on tower radiation that may dispel some of the more alarmist claims). For example, there is the possibility of permitting operators to access government buildings for installing telecom towers. The recent nods to spectrum trading and sharing should help, although the sharing guidelines leave little room for larger operators to share spectrum and operators are also less than enthused about the transactions fees under the trading framework.
So, is there a solution close at hand? Sadly, it would appear not immediately. While the regulator’s move towards tighter, tower-level monitoring would help attain a clearer picture of the causes, including between metros and other cities, the call drop epidemic is symptomatic of a deeper institutional weakness that is manifest in trust deficits. Policy formulation in a suspicious atmosphere is doomed to produce discontent and in telecom, added litigation. On the operators’ side, a candid and truthful self assessment of their financial health is necessary. On the government’s side, recognition of the impact of regulatory burdens on operator balance sheets is vital. Since infrastructure is long lasting, such investments will be helped by certitude in regulation, disruptive technologies notwithstanding. And in all of this, the quality of mercy ought not to be strained on either side.
Kathuria is director and chief executive, and Urdhwareshe is research assistant, ICRIER. Views are personal