Call drops: Telcos warn of increase in mobile tariffs
Telecom operators today warned that mobile tariff will go up if they are forced to pay compensation for dropped calls.
The operators have also asserted that it is not possible to make a network free from call drops.
Telecom regulator TRAI has mandated operators to compensate consumers from January 1 if they face call drop problem. However, the regulation limits compensation to only three call drops in a day which means maximum compensation can be of Rs 3 in a day to a consumer.
In a joint letter to TRAI, telecom industry bodies COAI and AUSPI have said that the scheme of compensation, far from reducing call drops, will result in a sharp increase in call drops as countless customers will cause the calls to drop to obtain Rs 3 per day as compensation.
“In a country where the average ARPU is Rs 125, the impact of such a regulation is frightening. As per independent estimates, the regulation will lead to a 3% hit on revenues and 7-8% hit on mobile EBITDA,” the letter reads.
The letter written by COAI and AUSPI says that the Authority’s regulation for compensation was unjust and would eventually negatively impact the interests of consumers and the service providers.
During the consultation process, including the Open House Discussion, the service providers had made detailed submissions, which remain unaddressed and unanswered in the TRAI regulation.
The letter says that globally, mobile radio networks are invariably designed for a grade of service. Consequently, 2% call drops have been accepted as a global norm.
This, acceptance of 2% call drop as a grade of service, is an outcome not of deficient resources or effort, but of the physics of radio wave propagation in free space.
“The Regulation on compensation assumes ideal conditions with a possibility of zero call drop which is impossible to achieve,” the letter says.
The market is already agog with talk that all a consumer has to do is to engineer 3 call drops every day and get Rs 90 reduction in the monthly bill, it says while adding that the scheme of compensation, far from reducing call drops, will result in a sharp increase in call drops as countless customers will cause the calls to drop to obtain Rs 3 per day as compensation.
To recover this cost of compensation, telecom operators will have to increase tariffs leading to customer spending more to purchase telecom services.