In a big setback for the telecom regulator TRAI, the Supreme Court on Wednesday struck down its regulation making it mandatory for telecom companies to compensate subscribers for call drops.
The apex court said TRAI’s regulation was “arbitrary, unreasonable and non-transparent”.
The Supreme Court gave its verdict while hearing appeals filed by COAI, a body of Unified Telecom Service Providers of India and 21 telecom operators, including Vodafone, Bharti Airtel and Reliance. These telcos challenged Delhi High Court order which had upheld the TRAI’s decision making it mandatory for them to compensate subscribers for call drops from this January this year.
“We have held the impugned regulation to be ultra vires, arbitrary, unreasonable and non-transparent,” a bench comprising Justices Kurian Joseph and RF Nariman said.
The telecom companies argued that their sector is suffering from a massive debt and they are also paying a big price for spectrum so it is not possible for them to pay a hefty fine on call drops. They also claimed that they were making hefty investments on infrastructure.
On the other hand, TRAI had earlier told the apex court that it will take action against the Telcos for call drops to protect the interest of consumers.
The regulatory body had earlier argued that if companies agree to compensate call drops with equal number of free calls to consumers without pre-conditions then it is open to re- consider its direction imposing penalty on them.
TRAI said it was only trying to safeguard the interest of over 100 crore telecom subscribers of the country.
TRAI claimed in court that a “cartel” of 4-5 telecom firms having a billion subscribers was making Rs 250 crore a day. But even then the cartel was not making investments to improve network services to check call drops, claimed TRAI.
Telecom operators refuted TRAI’s allegations and claimed to have installed over two lakh towers in the past 15 months.
Earlier this year, the Delhi High Court had upheld the October 16, 2015 decision of TRAI, making it mandatory for cellular operators to pay consumers one rupee per call drop with a cap of Rs 3 a day.
(With inputs from PTI)