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Telcos Are Earning Rs 250 Cr a day, But Not Investing in Call Drop Reduction: TRAI

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Indian telecom industry has been growing by heaps and bounds. As per a Forbes magazine report by Nicole Fisher, more people in the world use mobile phones than toothbrushes. Considering the high mobile penetration in a humongous populous of India, money needs to be spent on maintaining good standards when the market is growing by the second. But just like the past has had it, there is refusal to spend over improvisation from higher authorities, and the typical Indian ‘chalta hai’ attitude of companies leading to high rates of call drops.

Indian telecom companies make Rs. 250 crore a day, but seldom have we as consumers had pleasures of exceptional service. TRAI is taking major steps to curb this now, by levying a call drop penalty . It claimed that telcos were playing smart moves by diverting a certain part of the spectrum to data, to mint more money out of it.

“There is a cartel of four-five telecom companies having billion subscribers, who are making Rs 250 crore a day from outgoing calls. They have stupendous growth but they are making minimum investment on their network to improve the quality of service on their network to curb call drops,” Attorney General Mukul Rohatgi said.

Service providers were claiming that the penalty levied on them is ‘thousands of crores’, which Rohatgi denied stating it is merely 280 crore. The amount seems to be quite meager for those making close to that amount per day, at the cost of inconvenience of people who have innumerable call drops and have to pay again for re-calling.

At a growth rate of 61% in the subscriber base from 2009 to 2015, there is no probable reason for telecom companies to not invest in services, despite of unwillingness to spend. Additionally, they can earn more when they divert spectrum from calls to data as data services earnings are more than calls. The Attorney General further stated that telcos cite shortage of spectrum as the major cause of call drops, but that ain’t the true story. The spectrum remained unsold during the recent auction in 700Mhz band.

The unified body of telcos, COAI have challenged the Delhi high court order upholding TRAI’s decision making it mandatory for them to compensate subscribers for call drops from this January. TRAI is of the opinion that when the company has less spectrum, they have to restrict their subscription.

We’re sure no one would come up and say that they have their hands full and hence cannot take more subscribers. That would hamper the market growth, making it stagnant. The other option left with them is to invest, which as Indian companies is a kind of charity, which they certainly wouldn’t take up.

In the last 5 years, Chinese telcos have invested 5000 crores on services, whereas India’s figure unsurprisingly remains 500 crores. This difference of 10 times the amount needs to be paid attention to, and TRAI is rightly coaxing them to make up for the damages.

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  1. […] TRAI had said that telecom companies are earning Rs 250 cr/day, but they are unwilling to invest in infrastructure or compensate for call drops. On the other hand, […]

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