Telcos seek rollback of compensation ruling by TRAI

Industry bodies COAI and AUSPI have expressed reservations about the misuse of the compensation regulations, that might result in huge losses for operators

Published Date
28 - Oct - 2015
| Last Updated
28 - Oct - 2015
 
Telcos seek rollback of compensation ruling by TRAI

Telecom operators in the country on Tuesday requested the withdrawal of the call drop compensation regulations, before a scheduled meeting with TRAI on October 29. The operators have warned that mobile tariff may be hiked if the recent rulings by TRAI regarding call drops compensation come into effect.

Representing GSM and CDMA operators, COAI and AUSPI have jointly addressed a letter to the telecom regulator, expressing their concerns regarding the new guidelines. Terming the ruling as “coercive” and “grossly unjust”, the telcos have requested a rollback of the regulations. The letter has indicated that such regulations will be “catastrophic” for the industry. It will severely impact the profitability of the business, which will in turn force the telcos to raise tariffs. According to estimates, the industry will be burdened, and incur a cost of Rs. 54,131 crore by way of compensation, even if 50 percent of the users are to be compensated. "The market is already agog with talk that all a consumer has to do is to engineer three call drops every day, and get Rs. 90 reduction in the monthly bill. In a country where the average ARPU is Rs. 125, the impact of such a regulation is frightening," the letter said.

The letter has also pointed out the technical shortcomings of the regulations. According to the operators, the rulings are based on ideal conditions with no call drops. Whereas, the letter notes, wireless networks can seldom operate with zero call drops, since it is technically impossible to provide full network capacity and coverage everywhere. "Technically impossible to provide drop free experience in basements, examples of lifts and across thick walls, forest or water which kills the waves faster, and significantly less supply of spectrum against requirement would further compromise this grade of service," the letter added.

Operators have also observed in the letter that, "Such a regulation is not pursuant to the provisions of the TRAI Act. There is no violation of licence conditions by the service providers, compensation being a matter not covered under TRAI Act and this regulation is not in regard to ensuring quality of service."

TRAI has scheduled a meeting with the CEOs of telecom companies on Thursday to discuss the issues regarding the new compensatory regulations. If the regulator refuses to budge from its position, telcos may approach the telecom tribunal TDSAT, to challenge the ruling.