India’s operators claim dropped-call penalty to cost $8B

India’s operators claim dropped call penalty to cost $8B

10 NOV 2015

India’s mobile operators complained to the Department of Telecom that the planned penalty for dropped calls will cost the industry INR540 billion ($8.3 billion) a year and called on the minister to intervene.

The Cellular Operators Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI) said in a joint letter to the telecoms minister that such a payout would harm the industry’s ability to attract investment and slow the government’s Digital India programme, the Economic Times reported.

After the country’s dropped call problem worsened over the past year, the telecoms regulator last month ordered operators to compensate customers INR1 ($0.015) for each dropped call. The new regulation, which will go into effect 1 January, will limit operators to compensating customers for a maximum of three calls per day.

The operators already appealed to the Telecom Regulatory Authority of India (TRAI) for a review of the order, but it has not backed down. The operators argue that TRAI doesn’t have the authority to issue the order and that it will be very difficult to implement.

Credit Suisse estimates that the regulation could reduce revenue by up to 3 per cent and EBITDA by 7-8 per cent, the Times said.

Author

Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

Read more

Related

Tags