Call drops’ Re 1 penalty: Trai, telcos headed for fierce court battle


The battle between the telecom operators and the Telecom Regulatory Authority of India (Trai) on the Re 1 penalty for call drops is all set to head to a fierce court battle with the telecom regulator deciding to reject the operators’ demand of a review of the decision.

A senior TRAI official said there is no question of  retracting and the regulator will go ahead with its plans to impose the penalty from January, as planned.

“The penalty will come from January 1, there is no going back,” said the official, adding that the operators can challenge the Trai regulation in a High Court if they don’t want to implement it.

In a letter last week, signed by both industry bodies Cellular Operators’ Association of India (COAI) and Association Of Unified Telecom Service Providers Of India (AUSPI), the telecom players had unitedly accused Trai of being “coercive, grossly unjust, and its unintended impact will be catastrophic”.

They pointed out that the call-drop penalties could end up eating over a third of telco revenues.

The Trai official, however, said that the contention was absolutely misplaced as the regulator’s internal assessment suggested that penalties could not be more than a few hundred crores, which the industry should bear for the deficiency in service.

On the industry’s argument of not having a way to figure out whether a call has got “dropped” due to a problem in the network or whether it was intentionally terminated by a user — and the users could game the system — the Trai official pointed out there are as many as 180 codes for call drops available with the telecom operators and they can easily find out the reason for any call drop.

According to the industry estimates, while the average earning per customer is Rs 125 per month, the Trai rules of a Re 1 penalty per call (subject to a ceiling of three a days) could force telcos to pay Rs 90 to each user a month, which might lead to an increase in tariffs across the board proportionately.

The Trai’s proposition is that the industry is tracking 11 billion minutes call per day and it is not difficult to monitor and pay for the call drops due to the system to the customers.

Clearly, with the Trai and the industry at loggerheads on the penalty issue, this could be another long legal battle in the sector.

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