Network OperatorsCall drop penalty to be challenged by mobile operators

Call drop penalty to be challenged by mobile operators

Telecom operators in India may be gearing up to fight TRAI over the authority’s command to pay consumers for call drops. The companies think the penalty will have a negative impact and create an environment of hostility between customers and network providers. But subscribers who are fed up with poor services are welcoming the penalty.

The Cellular Operators Association of India, a lobby group comprised of brands like Airtel and Vodafone, asserted that it would turn to legal action if TRAI did not address their concerns sufficiently. Rajan Mathews, the director general of COAI, feels the call drop compensation scheme distracts telecom players from resolving the problem.

Man With Phone

He further claims the companies recognize that call drops are under its provision and are working to resolve it. According to the Economic Times, COAI plans to meet TRAI next week. It’s planning to seek clarity on issues such as whether the regulation applies even in places where 100% coverage is not required, and who is supposed to be penalized when two operators are involved.

Some brands have consulted lawyers, who think the new rule in unfair and will be stayed until a final court order on the matter. However, no legal documents or arguments have been drafted yet. Ashok Sud, the general secretary of Auspi, is of the opinion that TRAI should have given a margin of 2% for call drops and imposed the penalty only after a provider has gone beyond the set limit.

Also See: TRAI asks telcos to pay users for call drops, Rs 2 lakh fine for poor service

Analysts project bad figures for network brands, saying the call drop scheme could knock down revenues by roughly 3%. The maximum amount a company could potentially have to pay a subscriber is Rs 93 a month. It’s a huge hit, considering the Rs 120 – Rs 200 average revenue for each user which players get per month from voice calls.

Credit Suisse research analyst Sunil Tirumalai thinks the penalty for call drops might be abused by enterprising users. He further claims the law may result in a 7% to 8% hit on mobile EBITDA for Idea and Airtel. Shares of the two companies fell by 3% yesterday after TRAI introduced the new compensation scheme.

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