Telcos, don't forget customer service

New rules on the quality of telecom services seeking granular disclosures at greater frequency, and increased fines for delinquency, are being disputed by the industry on the grounds that these will raise operating costs without significantly benefiting consumers. This argument is difficult to comprehend. The rules were framed in consultation with the industry and are being updated after a gap during which telecom services have evolved. Latest-generation cellular networks have enormous transformative potential for economic productivity, which may not be met if service quality remains subpar. The new rules are being imposed with a lag to enable telecom companies to roll out 5G networks rapidly.

GoI has done its bit to help telcos to upgrade their networks. Spectrum can now be bought in instalments. Financial stress in the industry has been eased by a relief package that includes swapping debt for equity. Infra issues that impede network rollout are being addressed in consultation with local bodies. Telcos have regained some pricing discipline after a bruising price war. Rising data consumption is providing ballast to industry revenue. India has had a rapid rollout of 5G networks, and the telecom sector's health is on the mend.

This is an opportune juncture to place stricter rules designed to keep the industry on a high-growth strategy. Competitive intensity must diversify from price to quality, and the telecom regulatory is aiding the process by raising the bar on issues such as outages, call drops and latency. Telcos have pointed out exogenous factors that affect expected service quality. Still, the regulator is not convinced these are of an order for consumers to settle for less. Telecom usage, especially data traffic among machines, is poised to grow exponentially, and consumers need to be compensated for downtime or slow internet. Enterprise consumers will need these guard rails before they commit more of their processes to the cloud.