Trai to discuss call drops with telcos on Thursday

The Telecom Regulatory Authority of India has called for a meeting with the heads of all mobile carriers on Thursday to discuss grievances against a directive asking telecom operators to compensate users for dropped calls.

The meeting, which has been called suo motu, is set to be preceded by a joint letter by the firms highlighting issues that require clarification, which may go out on Tuesday.

"Trai has called for a meeting with all CEOs on 29 October at noon to discuss call drops and the recent Trai regulation on it," Rajan Mathews, director general of the Cellular Operators Association of India (COAI), confirmed to The Economic Times.

On 15 October, Trai mandated that telecom firms pay subscribers Rs1 for every call drop they experience on their network, subject to a cap of three drops a day, starting from 1 January. As per this mandate, , telcos must intimate pre-paid customers through SMS or USSD within four hours after a call drop, and detail the amount credited. For post-paid customers, credit details should be provided in the next bill.

COAI had said new rules imposed harsh penalties and could create a confrontation between customers and telcos. Carriers want rules to be modified or withdrawn, failing which they will move court.

The first of its efforts in the direction of negotiations will be a joint letter, from not only top GSM telcos such as Bharti Airtel, Vodafone India and Idea Cellular, but also from CDMA telcos such as Reliance Communications and Tata Teleservices, which are represented by Auspi.

The letter will list out issues that the CEOs will want to cover in their meeting with the Trai chairman on Thursday, an industry insider said, asking not to be named.

The communication will point out anomalies in the new rules, for instance, which telecom party is responsible for call drop and, hence, would be penalised if a call drops when the phone runs out of battery or when a consumer enters an elevator, a common area where network coverage is minimal.

The issue of implementation of the new rules and the time frame will also be raised, according to industry executives.

Other legal points on the new rules, including telcos licences do not require them to compensate customers for call drops, are likely to be included in the communication to Trai.

Telcos are, however, unlikely to raise the question of Trai's jurisdiction on levying penalties at this stage, since they feel the argument would be better placed in court, if matters head there, said a top executive, part of one of the associations.

The letter may also red flag technical measures and methodology used for ascertaining the level of call drops for the entire country, based on findings of Delhi and Mumbai alone.

Most analysts peg call drops at around 2 per cent of total calling. "In the event the regulation is enacted, we estimate 5% negative impact on our EBITDA estimates for Bharti's India wireless segment," said a note by Nomura. For Idea, it expects a hit of 6 per cent.

"FCF (free cash flow) will be under pressure from 2016-18, in our view. Jio's scheduled entry in December should increase competition, with potential for a price war in data segment," Nomura said. It remained underweight on both Bharti Airel and Idea, No. 1 and 3operators in the country.