Telcos a cartel that earns Rs 250 cr a day, denies proper services: TRAI

  • Bhadra Sinha, Hindustan Times, New Delhi
  • Updated: Apr 22, 2016 12:37 IST
COAI, a body of Unified Telecom Service Providers of India and 21 telecom operators, have challenged the Delhi high court order upholding TRAI’s decision making it mandatory for them to compensate subscribers for call drops. (Representative Photo)

The country’s telecom watchdog defended on Thursday its decision to impose call drop charges on telcos, accusing them of running a cartel and investing barely 4% of their income in infrastructure upgrade despite earning Rs 250 crore a day.

The Telecom Regulatory Authority of India (TRAI) had directed private mobile phone operators to credit a rupee to a user’s account for every call drop from January 1 this year. The move is aimed at curbing the nuisance of call drops or snapped cell phone conversations because of technical and network glitches, which hurts millions of phone users.

The TRAI alleged that the companies have formed a cartel to deny good service to consumers, though they earn Rs 1 lakh crore a year from voice calls.

“The daily revenue earned by these companies is Rs 250 crore. Between 2010 and 2015, the subscriber base grew from 60 crore to 100 crore, which means a jump of 61%,” attorney general Mukul Rohatgi, who appeared for the telecom regulator, told the Supreme Court.

“In the same period, the revenue increased by 48%. But they have invested just 4% to improve infrastructure, which is inadequate.”

Companies blamed the poor network on inadequate number of towers, which are not allowed in many residential areas because of health and environmental concerns.

But the attorney general warned that the companies will have to find a remedy to improve service quality. “A call drop charge is a polite way to tell them to buck up,” he said, pointing to laws that the government can invoke to compel them to invest more in infrastructure.

Rohatgi faulted the telecom operators’ argument that a consumer is bound by an agreement to accept whatever service is provided.

“This is a cartel. I make him sign a form and then leave him to his fate, which he may suffer or may not. He hasn’t signed his death warrant that he will not talk ever again. We are here for consumers because they do not have a voice,” he said.

The attorney general compared investments made in China and India to point out how operators have disregarded consumer interests in the country. “China has a subscriber base of 1.3 billion and India 1 billion. Companies have invested $50 billion there to improve (infrastructure) but in India, it’s just $5 billion. The services here have deteriorated.”

The top court bench of Justice Kurien Joseph and Justice Rohinton Nariman is hearing the Cellular Operators Association of India’s appeal challenging a Delhi high court verdict that refused the companies relief from the TRAI directive.

Rohatgi dismissed the operators’ argument that they have to shell out thousands of crores in penalties. “They have to pay only around Rs 200 crore if the call drops are on account of their fault.”

Besides, a consumer can get compensation subject to a cap of only three dropped calls a day.

The TRAI alleged that telcos were diverting part of the spectrum to data to make more money.

“None of the telecom companies are here for charity. They are here with billion subscribers for profit. They charge for everything. They can’t say that we will be happy with the money and do nothing.”

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