SC drops Trai-al call to provide compensation to subscribers

With just a stroke of the pen, India’s over 1 billion mobile users have been squarely put ‘in the penalty box’.

Published: 12th May 2016 04:16 AM  |   Last Updated: 12th May 2016 04:16 AM   |  A+A-


Illustration: Amit Bandre

NEW DELHI/CHENNAI: With just a stroke of the pen, India’s over 1 billion mobile users have been squarely put ‘in the penalty box’.

On Wednesday, the Supreme Court struck down the Telecom Regulatory Authority of India’s (TRAI) regulation making it mandatory for telcos to compensate consumers. It means the Trai’s diktat mandating operators to pay subscribers Rs 1 for every dropped call, subject to a cap of Rs 3 per day, will cease without even coming into effect.

The imposition of the ‘strict penal liability’, the SC said, was made on an erroneous basis. The move brought cheer to operators, much to the chagrin of consumers, who have to bear the brunt of deteriorating service quality and with no immediate solution in sight.

“We have held the impugned regulation to be ultra vires, arbitrary, unreasonable and non-transparent,” said a bench comprising justices Kurian Joseph and R F Nariman. The judgment was made on appeals filed by trade bodies COAI, Association of Universal Service Providers of India, and 21 telcos, including Vodafone, Airtel and Reliance, challenging the Delhi High Court order that had upheld the regulator’s decision in February.

The issue of truncated calls reached dire proportions in the recent past. While operators’ monthly data submitted with the sector watchdog showed they were meeting standards, Trai’s independent drive test revealed call drop rates as high as 17.29 per cent in Delhi and 5.56 per cent in Mumbai. Only one operator of the six reviewed were within the benchmark.

Trai had in October 2015, invoked its rules set as early as 2000 prescribing financial disincentive for telcos failing its monthly average call drop rate of 2 per cent. The compensation concept — a first in India — was music to consumers’ ears, but opened a faultline between telcos and Trai, with the former questioning the jurisdiction of the latter.

“It is the responsibility of the entire ecosystem, beyond government and regulator — including operators, network planners, designers and integrators, handset vendors, ODMs, chip makers and app developers to contribute their part to overall network quality,” said Faisal Kawoosa, lead analyst, Telecoms, Cyber Media Research.


Experts blame inadequate infrastructure for the poor service quality. For instance, if 2G and 3G data use rose 106 per cent and 252 per cent respectively in the past two years, related infrastructure grew 8 per cent and 61 per cent respectively. With consumers increasingly moving from voice to data (Internet) usage, thanks to 3G and 4G networks, telcos are tapping a rich vein revenue-wise.

To meet demand, operators committed Rs 1.1 lakh crore towards spectrum acquisition last year and are gearing up for the largest-ever radio waves auction worth Rs 5.36 lakh crore in the next few months.

What was TRAI’s diktat?

The sector regulator had mandated that telecom companies compensate users from January 1 at the rate of C1 per dropped call, with a ceiling of three dropped calls per day (or C3 a day).

Why do you face a call drop?

Technical and non-technical issues. Primary among technical reasons are lack of spectrum, radio interference, imperfection in network functioning, capacity constraints and overload, transmission problems and unauthorised repeaters. Non-technical issues could include low battery. Even if you are miffed with someone and disconnect the call, it’s considered a call drop.

Why telcos opposed Trai move?

Service providers argued that compensation leaves room for customers to manipulate and collect maximum compensation of C3 per day. They believe scope for manipulation is high as determining the actual cause for a call drop wasn’t foolproof. The companies said their outgo towards call drop penalties would be C54,000 crore per annum, but Trai claimed payouts won't exceed C800 crore.

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