Telcos don't need to compensate consumers for call drops: Supreme Court

NEW DELHI: In a major victory for the country's mobile telecom operators,the Supreme Court on Wednesday said telecom companies don't have to compensate consumers for dropped calls.

Last October, the Telecom Regulatory Authority of India (Trai) made it mandatory for telcos to compensate consumers for calls that get cut after a connection is made. Telcos were ordered to pay consumers Rs 1 per call drop and the penalty was capped at Rs 3 a day.

The country's apex court said that the Trai notification - that came into effect on January 1 - .was unreasonable, arbitrary and non-transparent.


The Cellular Operators' Association of India had approached the court challenging the Delhi high court order which had upheld TRAI's decision.

The court has asked the Centre to make a law on call drops on the lines of the one in the US.


The service providers, during the hearing, had contended that Trai decision was a "populist" measure to accommodate consumers as call drops were happening for host of external considerations not attributable to them.

However, Trai had defended its decision to impose the call drop penalty, describing it as a "least invasive way to deal with the issue" and told the apex court that the service providers must enhance their investment in infrastructure as they were earning huge revenues.

Trai had on October 16, 2015 said that every originating service provider (providing cellular mobile telephone service) was liable to credit the calling consumer (a consumer who initiates a voice call) by one rupee for each call drop within its network for a maximum of three call drops per day. The telecom companies claimed that the additional compensation would cost the companies Rs 54,000 crore a year.

that The association had first challenged Trai's decision before the Delhi High Court which dismissed its plea on February 29. "Petitioners are bound to comply with regulation 16 of the Telecom Consumers Protection Regulations, 2012, as inserted by the impugned notification dated 16.10.2015, with effect from 01.01.2016 and Trai is at liberty to take appropriate steps in accordance with law for compliance of the same," the HC had said.