By Snigdha Kalra
The Telecom Regulatory Authority of India (TRAI) has decided to deal with an excessive issue of call drops in a very stringent manner. It has issued new rules with an aim to impose penalties on telecom operators. The rules are based on the rate of call drops, which ranges from Rs. 1 lakh to Rs. 5 lakhs per quarter. They will come into effect from the 1st October 2017; however, penalties will only be charged from the first quarter of 2018. The new rules will also aim to improve coverage strength in under-connected areas.
Rules to iron out a major glitch
A dropped call is a call which is hung up before the conversation has been completed by the conversing parties, due to network/signal problems. According to the new rules introduced by TRAI, telecom operators will face penalty depending on the extent of call drops. TRAI has set five levels. The penalty goes up directly with the call drop rate (CDR), which is the percentage rate of dropped calls. If the CDR is between 2 – 4%, the operator will face a penalty of 1 lakh. 4-6% of CDR will result in a penalty of 2 lakhs. Similarly, the rules impose a 3 lakhs penalty for CDR 6-8%, 4 lakhs for 8-10% CDR and 5 lakhs for a CDR above 10%. If the violation continues in the second consecutive quarter, the penalty will increase by 1.5 times.
A third consecutive violation will result in a penalty that is twice the original. Thus, the maximum penalty amount levied on any company will be Rs. 10 lakhs for a quarter. However, the penalties will be effectively imposed January 1st, 2018 onwards. In the first quarter (October-December), TRAI will observe call drop activity and statistics of different telcos. There have been some issues in the measurement of call drops. Averages hide a lot of things. Under the new rules, we are taking into account temporary issues that may be there on the network as well as geographical spread of the network, said R S Sharma, the Chairman at TRAI.
Whats in it for stakeholders?
Telecom companies are already suffering under a massive debt burden. Reliance Jios entry has created a stiff competition and reduced the revenues of incumbent market participants such as Airtel, Vodafone, and Idea. The share of the telecom sector in the total Non-Performing Assets (NPAs) with banks has been growing to 8.7% in 2016-17 from 5% in 2015-16. In such a dire situation, these penalties are hardly good news for telcos. Improving signal strength requires massive investments in infrastructure, an undertaking that is not so feasible for these companies at this moment. Their difficulties only increase with the introduction of the new rules by TRAI.
Apart from the debt problem, there are also other limitations. Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), said that quality of service is beyond the absolute control of a carrier, and as there are a lot of technicalities involved in call drops, if and when they occur, they do in pockets. If the companies can make investments in improving signal strength, the penalties will act as a catalyst in the process. A consequent reduction in call drop rates will improve service and benefit the customers.
A considerate resolution
The ultimate impact of these rules depends on how they are implemented. A consideration of telcos situation needs to go side by side with an aim to provide better quality services to customers. The customers have been suffering for years due to the call drop problem, which had been going under-reported by telcos. However, the situation is now set to improve.
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