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Apex Court Strikes Down TRAI's Call Drop Rules
May 13, 2016

The Supreme Court on May 11 struck down the TRAI regulation making it mandatory for telecom companies to compensate subscribers for call drops holding it as "arbitrary, unreasonable and non-transparent.

The apex court passed the judgement on the appeals filed by COAI, a body of Unified Telecom Service Providers of India and 21 telecom operators, including Vodafone, Bharti Airtel and Reliance, challenging the Delhi High Court order which had upheld the TRAI's decision making it mandatory for them to compensate subscribers for call drops from this January.

The telecom companies had earlier told the apex court that the entire sector is under huge debt and they have to pay big price for spectrum, therefore zero tolerance on call drops should not be imposed on them.

Refuting the allegations of TRAI that the telecom service providers are making huge gains in the sector, the firms had said they have been investing hugely on the infrastructure.

  • The Telecom Regulatory Authority of India (TRAI) had earlier told the apex court that it will take action against the Telecoms for call drops to protect the interest of consumers as these service providers are not willing to compensate them.

  • The regulatory body had told the court that it has to safeguard 100 crore telecom subscribers and if companies agree to compensate call drops with equal number of free calls to consumers without pre-conditions then it is open to re-consider its direction imposing penalty on them.

  • It had also told the court that a ‘cartel’ of 4-5 telecom firms having a billion subscribers are making Rs. 250 crores a day but not making investments on their network to improve services to check call drops.

The counsel for telecom operators had refuted the allegations of TRAI that telecom companies are not investing on technology and towers and had said that in past 15 months over two lakh towers have been installed.

The Delhi High Court had early this year upheld the October 16, 2015 decision of TRAI, making it mandatory for cellular operators to pay consumers one rupee per call drop experienced on their networks, subject to a cap of Rs. 3 a day.

What is Call Drop?

In telecommunications, the dropped-call rate is the fraction of the telephone calls which, due to technical reasons, were cut off before the speaking parties had finished their conversational tone and before one of them had hung up (dropped calls). This fraction is usually measured as a percentage of all calls.

Reasons for Call Drop

  • Mobile phones work using radio waves in the frequency range of 300 MHz and 3,000 MHz. But the entire range is not available for use. Critically, the lower the number, the better the quality of transmisison.

  • It makes sense for a telecom company to pitch for a 900 MHz band instead of 2,100 MHz or even 1,800 MHz. Since limited space is available in each band, companies jostle for more space in the better (or lower) bands.

  • Towers act as boosters that help radio waves travel better, and are a necessary part of the telecom architecture in any country. There are approximately 5,50,000 towers in India, and industry associations reckon another 1,00,000 are needed.

  • The lower radio bands need fewer towers to travel longer distances, so when telecom companies offer richer services like 3G or 4G, they have to be at higher frequencies (2,100 MHz or 2,300 MHz instead of 900 MHz), which need more tower support.

Remedial Measures

  • Give more spectrum by releasing some from the defence services.

  • Allow trading of spectrum to reduce the cost of adding on to spectrum.

  • Encourage states to follow uniform procedures on towers.

  • Free up the roofs of government buildings to erect towers.

  • Set up a nationally publicized database on call drops to force laggard companies to improve on their services.

  • Telecom firms claim they have spent Rs 1,29,000 cr ($ 22.4 bn) on airwaves, other investment in 2015.

  • Total annual revenue for the companies was Rs 1,76,000 cr in 2014—about 73 per cent capex. 

  • There are 13 service operators in India—7 have pan-India networks.

  • Urban teledensity is above 100 across India; Delhi’s is the highest at 222.78.

  • TRAI figures show call drops have improved in last reported quarter across firms to less than 2%. 

  • But in worst affected areas, drop rate remains 12.5%, which means more than one of 10 calls drop.

  • In Delhi, no operator has a call drop ratio within the acceptable range of under 3%. Mumbai is a shade better off.

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