Trai Brushes Aside Telecom Operators' Claims on Call Drop Compensation

Telecom regulator Trai has refuted claims by mobile operators that call drop compensation will have huge financial implications for them and may not be technically possible to implement.

In a statement on Thursday, Trai said it's technically possible for the operators to implement the regulation and termed the claim of Rs. 54,000 crores per year on account of call drop compensation as "exaggerated". It put the likely figure at Rs. 200 crores per quarter.

"It is observed that the total financial implications on telecom service providers (TSPs) is likely to be not more than Rs. 200 crores per quarter, which is less than 1 percent of the total revenues of TSPs," Trai said.

"However, as per the regulation, there is a ceiling on relief of Rs. 3 per subscriber per day. Thus, the likely financial implications would be even less than Rs. 200 crores per quarter."

The Telecom Regulatory Authority of India (Trai) last month mandated that telecom companies from January 1 should compensate users at the rate of Re. 1 per dropped call, with a ceiling of three dropped calls per day (or, Rs. 3 per day).

The industry maintains that implementing the regulations would cause a huge financial outgo.

Telecom operators, through their respective associations namely COAI and AUSPI, had said the regulation was an invitation for limitless misuse and gaming of the system and as per estimates, it will lead to a hit of 3 percent on revenues and 7-8 percent on mobile Ebitda.

Citing media reports on the issue, Trai said the financial implications of Rs. 54,000 crore per year on account of call drop compensation are exaggerated and appear to be based on COAI/AUSPI's apprehension that 50 percent of consumers would manipulate and misuse the regulation to get Rs. 3 every day from the operators.

"The Authority notes that such a sweeping presumption about the consumers is certainly not correct," Trai said.

It further added that based on the data of operators, the Authority has conducted a detailed analysis of the call data and call drops data