TRAI attacks telecom firms for call drops; accuses them of profiteering at the expense of consumers

NEW DELHI: The Telecom Regulatory Authority of India launched a fierce attack on telecom companies in the Supreme Court on Thursday, accusing them of behaving like a cartel that was only interested in profiteering at the expense of consumers who have to put up with atrocious service quality in the form of dropped calls. “This is a cartel of four-five players in a country of a billion,” Attorney-General Mukul Rohatgi told the apex court, arguing against a petition filed by telcos against a Delhi High Court ruling upholding TRAI penalties on call drop charges. “They earn huge revenues and couldn’t be bothered about consumer satisfaction.” Rohatgi said the companies were earning up to 61% profit but only investing 5% in infrastructure and only interested in signing up more subscribers without fixing call drops.

“If you are not capable of (serving) more subscribers please stop (adding more),” Rohatgi said. He disputed the assertion of telecom companies that they don’t gain from call drops. “Every time a call terminates, you call again, they gain,” he said.

Rohatgi was defending the TRAI regulation ordering telecom companies to pay consumers at the rate of one rupee per dropped call subject to a maximum of three calls daily. He also pointed out that the order was not set in stone: “This is anyway not forever. It will be reviewed in six months.”

Rohatgi questioned the contention of the telecom companies that their finances would be badly hit by the penalties. “What is their grievance? That they will lose one day’s revenue? It is not something that the court should examine at all,” he said.

“Does the whole country not talk of call drops? The average is 4.73%,” he said. “The investment just does not match the increase in subscriber base. The idea is to have orderly growth with consumer satisfaction and reasonable returns.” The telecom companies are constantly investing in the business, a lobby group told ET.

“The telecom industry is buying spectrum worth $8-10 billion each year and then investing another $7-8 billion in infrastructure, after which telcos pay 15% in licence fees and spectrum usage charges. So, we are constantly investing in the business,” said Rajan Mathews, director-general of the Cellular Operators Association of India, in an email. COAI represents top GSM telcos such as Bharti Airtel, Vodafone India and Idea Cellular, besides newcomer Reliance Jio Infocomm.

Rohatgi said TRAI’s levy was the least invasive method that could be used to galvanise the sector into dealing with consumer concerns. “We could very well come up with a proposal making it mandatory for all of them to invest 50% of their returns in investment,” he told the bench of Justices Kurian Joseph and RF Nariman.

‘NOT A PERMANENT SOLUTION’
Nariman suggested that the levy was hardly a permanent solution, alluding to the six-month condition. “This is an ad hoc gift to the consumer,” he said. “In fact, everything is ad hoc, not better.” Rohatgi said handsets made by Nokia, Ericsson and Huawei have technology that triggers codes indicating whether a call drop was due to the fault of the user or the service provider.

He claimed that 64% of call drops were attributable to telecom companies and only 36% to userrelated factors such as low battery.

“The argument that a large proportion of call drops is due to factors beyond their control is completely wrong. The argument is, we don’t care. Just because an illiterate man who recharges for Rs 10 signs a contract, has he signed his death warrant?” Rohatgi said. “Most call drops are attributable to you. This (call drop charge) is ameliorative. Even an interference with signals is a technical issue.”

He rejected the argument that lack of spectrum was to blame. Instead, it was lack of optimisation of spectrum, he said. Rohatgi also said telcos don’t just have to provide clear signals out in the open, they also have to do so inside buildings. It was meant to be just in the open during the rollout period and not forever, he said.

He said Indians were already exposed to greater radiation levels legally than in other countries and the difficulty of setting up telecom towers could not be used to justify call drops. Rohatgi will continue with his arguments next Tuesday.

The telecom companies have said they are not to blame for call drops and cannot be penalised for it, given the difficulty in setting up telecom towers. They have also said the call-drop penalty charge would drive the sector into the ground.