Call drop: Telcos warn of hike in mobile tariffs if forced to compensate

New Delhi: Upping the ante against TRAI's regulation on call drops, telecom operators Tuesday warned that mobile tariff will go up if they are forced to pay compensation for dropped calls.

The operators have also asserted that it is not possible to make a network free from call drops.

TRAI has mandated operators to compensate consumers from January 1 if they face call drop problem. However, the regulation limits compensation to only three call drops in a day which means maximum compensation can be of Rs 3 in a day to a consumer.

In a joint letter to TRAI, telecom industry bodies COAI and AUSPI have said that the scheme of compensation, far from reducing call drops, will result in a sharp increase in call drops as countless customers will cause the calls to drop to obtain Rs 3 per day as compensation.

"To recover this cost of compensation, telecom operators will have to increase tariffs leading to customer spending more to purchase telecom services," the letter said.

The two industry bodies, which represent all the operators in the country, said that the regulation is an invitation for limitless misuse and gaming of the system that as per estimates will lead to a 3 percent hit on revenues and 7-8 percent hit on mobile EBITDA.

"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 industry bodies said.

GSM telecom players body COAI had earlier said that the regulation may force the industry to shell out about Rs 150 crore every day even if half of the consumer base in the country faces call drop problem.

The operators also said that it was not possible to make a network free from call drops.

"Wireless networks cannot be designed for zero call drops ... Therefore, in a cellular mobile radio network, having full coverage and capacity everywhere is an oxymoron. The Regulation on compensation assumes ideal conditions with a possibility of zero call drop, which is impossible to achieve," the letter said.

"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 said.

The letter said that the authority has not addressed rationale for assuming any call shorter than 5 seconds being a dropped call.

"Any discussion on compensation without having complete understanding on how such compensation can be auditable and accurately verifiable, would only lead to chaos in the telecoms sector and increase litigation," it said.

The letter has been sent to the Telecom Regulatory Authority of India (TRAI) couple of days before a meeting of TRAI with operators to discuss issues over the call drop issue.

TRAI is meeting telecom operators on October 29 to discuss the issues around call drops.