No Refund On Call Drop

Big relief for telcos as SC strikes down Trai's call-drop penalty

In a much-awaited relief for telecom operators, the Supreme Court on Wednesday struck down compensation policy for call drops levied by the Telecom Regulatory Authority of India.

The operators had challenged the compensation of Rs 1 for every call drop, limited to a maximum of three such calls per day. Following an adverse judgement against them in the High Court, telcos approached the Supreme Court which stuck it down today, calling the Trai order "arbitrary and unconstitutional" as well as "illegal and not transparent".

"(The) SC has rendered historic judgement today by striking down the Trai s regulation," said Kapil Sibal, who was representing telecom operators in the court.

"SC said the regulation was unreasonable, arbitrary and the procedure followed was not transparent. Government and ministers should not try to be populist and do it in accordance with laws, not outside," he added.

In October last year, Trai had come out with the regulation which was to come into effect from January 1, mandating operators to give one rupee for every call drop to the user, with a maximum of three per day.

The telcos had termed the regulation as arbitrary and whimsical, contending that providing compensation to consumers amounted to interfering with the companies' tariff structure, which could only be done by an order, and not by any regulation.

Trai had told the high court that consumers have a right to get compensated for call drops and this was different from the quality of service guidelines that cellular service providers have to follow under the licence conditions. However, telcos had argued that even if consumers were facing problems, a regulation without statutory backing cannot be created.

According to analysts, if Trai’s regulation is implemented, it could lead to a decline of seven-eight per cent in the operating income of telecom operators. However, for companies that had a call drop rate of two per cent or below – as was mandated earlier – will see a negative impact of three-four per cent on their operating income.

Interestingly, the new regulation did not allow leeway of two per cent call drops, which means the regulator expects the network to be perfect and telcos to pay for every call drop.

The government has been asking operators to invest in infrastructure to improve the quality of services, while operators say spectrum crunch is a major problem for call drops scenario.

Big relief for telcos as SC strikes down Trai's call-drop penalty - Business Standard
 
Call drops: Supreme Court strikes down Trai penalty on telecom firms ..

New Delhi: In a win for telecom service
providers, the Supreme Court on
Wednesday struck down the Telecom
Regulatory Authority of India’s (Trai)
regulation making it mandatory for
compensation to be paid to subscribers
for call drops.
Setting aside the regulation, justice
Rohington F. Nariman said, “The
impugned regulation is arbitrary, ultra
vires, unreasonable and not
transparent.”
This effectively means that telecom
service providers will continue to
operate without being penalised for
call drops experienced by subscribers.

According to Trai’s 16 October
notification, telecom service providers
would have to credit Rs.1 to a user for
every call drop, subject to a maximum
of Rs.3 per day. This was to apply to
call drops from 1 January 2016.
On 29 February, the Delhi high court
had upheld Trai’s regulation.
 
RE: Call drops: Supreme Court strikes down Trai penalty on telecom firms ..

Bad.
How much the judges paid?
 
RE: Call drops: Supreme Court strikes down Trai penalty on telecom firms ..

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