India’s mobile phone subscribers recently crossed the one billion mark. With the cheapest call tariffs in the world,
India’s mobile user base is expected to contribute to massive growth in data usage and internet accessibility
through mobile phones in the near future. However, the Telecom Regulatory Authority of India (TRAI) has a bigger
problem on its hands. Although India definitely seems to be shining (it may also outstrip the United States in
smartphone users), it cannot be denied that this shining comes with a considerable amount of whining from mobile
phone users about the rapidly increasing phenomenon of “call drops”.

Call drops can be simply explained as the service provider’s ineptitude in maintaining a call between users and
providing continued service once a call has been correctly established. Inadequate infrastructure, overloaded
networks and fast paced expansion with poor investment by Telecom Service Providers (TSPs) to match the
expansion are some of the reasons behind this occurrence. With the Indian Prime Minister stepping in last year
and demanding that a solution be found, the problem has obviously not gone unnoticed and is expected to have a
direct negative impact on the Digital India program by which the government seeks to convert India into a digitally
reliant and empowered economy.

The Role of TRAI and the New Compensation Regulations

Section 11 of the Telecom Regulatory Authority Act, 1997 inter alia provides that the function of the TRAI shall be
to lay down the quality of standards provided by the service providers and to ensure maintenance of such standards
for the quality of service provided. In keeping with its role of watchdog, TRAI laid down the Quality of Service (QoS)
Standards for Basic Telephone Service (Wireline) and Cellular Mobile Telephone Service in July, 2000. These
standards have been periodically revised. Benchmarks have also been laid down inter alia for call drops and circuit
switched voice drop. The latest revision pursuant to the Telecom Consumers Protection (Ninth Amendment)
Regulations of 16th October, 2015 (Regulations) prescribes for the imposition of a financial disincentive on TSPs
for failure to meet quality of service benchmarks. Subsequent to a call drop audit in major urban centres such as
Mumbai and Delhi, TRAI’s issued Regulations ordering telecom operators to pay a compensation of Rs.1 to mobile
users for each call drop subject to a maximum of 3 dropped calls per day with effect from 1st January, 2016.

Pursuant to the new Regulations, the operator will have to send a message to the consumer within four hours of a
dropped call with details of the amount credited to their account. It is estimated that the Regulations may result in
TSPs paying out an approximate Rs.150 crores every day. The Association of TSPs and 21 telecom operators
have challenged the Regulations before the Hon’ble High Court of Delhi citing the decision to penalize as irrational
and without any legal basis. It has been contended by the TSPs that the Regulations are arbitrary and whimsical
and interference with a company’s tariff structure could be only done by an order and not a regulation.

The Bone of Contention
The question under consideration is whether the policy of compensation to consumers for call drops is a viable
decision on the part of TRAI. It has been submitted by TRAI before the Hon’ble Delhi High Court that a technical
consultation paper was circulated by TRAI to all TSPs and that the fine of Rs.1 per call drop (limited to 3 calls per
day) has been imposed after taking all submissions into account.
The TSPs however contend that call drops are result of sustained resistance from resident welfare associations
against installation of towers in residential colonies, sealing of the existing towers and the spectrum crunch due to
the high growth of subscribers. TSPs have also alleged that compensation mechanism may result in a plethora of
litigation proceedings between TSPs and consumers.
Problems with Compensation
Notwithstanding the fact that there has not been adequate investment by the TSPs to keep pace with usage, the
Indian Government and TRAI are now burdened with the onerous responsibility of resolving the issue while
simultaneously ensuring that the threat of hike in tariff rates does not materialize as the same will have a direct
impact on subscribers and Digital India.
Although the intention to compensate consumers for the inconvenience caused due to lack of seamless
connectivity is a laudable effort, it is imperative that a few issues (that still remain) are resolved by the Government
and TRAI before proceeding further. For one thing, TRAI has failed to provide a rationalisation behind the imposition
of penalty. No explanation has been given as to how the amount of one Rupee per dropped call (limited to a
maximum of three dropped calls per day) has been decided as sufficient compensation, if at all. TRAI has further
failed to lay down concrete guidelines to be followed by TSPs for providing compensation, it’s receipt by consumers
and failure to pay. Failure to provide such rationalisation will result in confirmation of the TSPs’ contention that the
imposition of penalty is irrational and arbitrary.

Conclusion

In December, 2015 the Hon’ble High Court of Delhi recorded the Government’s stand that no coercive steps would
be taken pursuant to the impugned Regulations during the pendency of the disputes subsequent to which the
matter now stands reserved for final orders. It now remains to be seen whether the Regulations are upheld by the
Hon’ble High Court or are struck down with a direction to the Government to focus on laying down guidelines for
improvement in the quality of services provided by telecom operators. The critical factor after all remains that the
ongoing litigation and the opposition by the TSPs against the penalty imposed by TRAI should not waylay the
ordinary consumer’s right to reasonable quality of telecom service and seamless connectivity.