The Supreme Court (SC) struck down the TRAI regulation on compensation for call drops as "ultra vires, arbitrary, unreasonable and non-transparent", striking a blow against consumer interest and giving relief to telcos. However, the problem exists and is a major source of consumer dissatisfaction.
The telcos say that they have installed more than 200,000 sites for 2G and 3G over the last 15 months. They say that the issue is the availability of affordable spectrum and timely permission for locating cell towers. They also said that there are technology solutions to tackle this issue like self-optimising software. All of which they did not do because they did not want to.
The telcos also clearly admit there is a problem.
That is precisely the reason there needs to be a penalty for call drops to get them to address this quickly. Who prevented them from setting up more sites earlier? Who prevented them from using self-optimising software and other technology solutions earlier to improve call service? Who asked them to sell more connections, more than what their spectrum allocation could handle?
Why did they sell more data connections knowing fully well that their spectrum allocation could not support the extra load and that this would compromise on their call service? Why did they bid at high rates for spectrum if they found the cost unaffordable?
It is obvious that telcos compromised on their license conditions, provided bad service, made consumers suffer through call drops and left TRAI no choice but to come out with these regulations after detailed public consultations.
They also used the specious argument that they had huge debts on their balance sheet. If they have not raised enough equity, then why should consumers suffer? Their capital structure is under their control and their choice. One telco borrowed heavily for an African misadventure which has gone sour, while continuing an extremely profitable Indian operation. Yet, consumers here have to suffer for their borrowing and huge losses in Africa!
Others have paid heavily for acquisitions, but invest inadequately in networks and make the consumers suffer. The telcos have failed at their most fundamental purpose - to consistently and reliably connect their customers.
Let's make it clear - consumers have rights to standards of service. When our rights are abused, we must demand that the regulators step in to arbitrate on the issue and deliver a path to better service.
This is what the TRAI has attempted to do, and it is fully within its duty to protect consumer rights. This is not state action for its own protection, but arbitration by a regulator to protect the consumer, set standards for acceptable service, and penalise providers when they under-deliver.
Yet the Supreme Court judgement says that the regulations are an unreasonable restriction on the fundamental rights of telcos! Do consumers not have fundamental rights? Are their rights not compromised by the Supreme Court judgement? Are we to believe that there is a fundamental right to deliver bad service?
The Supreme Court has taken a narrow view of this case and ignored consumer interest, public interest and public policy. The decision focused on the mechanics of how the figure of Rs 1 per dropped call was arrived at, why there was a cap of compensation for a maximum of three dropped calls per day, why the calling party alone is to be provided compensation, and so on. It also stated that this shows a complete lack of "intelligent care and deliberations", rendering the regulations manifestly arbitrary and unreasonable. It also asks why hold the telcos as 100% responsible when 36.9% call drops could be due to the fault of consumers?
It says the orderly growth of the telecom sector cannot be ensured by making the operator pay a penalty without it being at fault. The judgement also says that nothing is disclosed as to why service providers were incorrect when they said call drops were due to varied reasons, some of which cannot be said to be because of the fault of the service provider.
Sadly, these conclusions fly in the face of subsequent action by the telcos when regulations were being framed. If all this is true, then what was the need for telcos to install 200,000 sites in the last 15 months, to invest in self-optimising software and other technology and take other measures? This clearly demonstrates deficiency of service, bordering on cheating the consumers as they were forced to pay for deficient service and deliberate under-investment.
As for the Rs 1 compensation for the calling party and the limit of three dropped calls per day, it was a balance struck by TRAI between consumer and telco interests to force telcos to invest and improve service. Would the telcos have improved service without the threat of penalties? The call drops for a busy user is more than three per day and this limit itself makes the consumer share the burden. The regulations do not put the whole burden on the telco, but limits the burden, and thus cannot be called arbitrary and unreasonable.
TRAI had public consultations, responded to widespread public anger at bad service and cheating of consumers as they paid for the call drops, and balanced telcos' and consumer interest. Even the 3G data services have not delivered the promised speeds. Sadly, the Supreme Court has ignored consumer interest and given relief to the telcos at the cost of consumers.
Its judgement has weakened TRAI which after a long time tried to enforce licence conditions and protect consumers - the very reason for its creation by Parliament. Orderly growth of the telecom sector cannot be promoted by letting telcos off the hook, cocking a snook at the regulator, ignoring consumer service, providing inconsistent service and making consumers pay for their recurring under-investment and lack of care. Certainly, consumer protection interests are fully justified in asking the Supreme Court to review its judgement.
Overall, this is a sad day for 100 crore Indians whose interests have been overlooked by the judgement. We must stand up for the principle of consumers' rights to quality of service, set transparent standards on acceptable quality, and penalise service providers when they abuse these standards.
(Mohandas Pai was the CFO and then the head of HR at Infosys. He is now Chairman, Aarin Capital Partners.)Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.
Disclosure: Mohandas Pai is an investor in NDTV Convergence's e-commerce venture, smartcooky.com