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Why TRAI slapping operators with token fines will do little to improve poor state of telecom services

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Sushant Talwar
Sushant TalwarSep 11, 2018 | 17:27

Why TRAI slapping operators with token fines will do little to improve poor state of telecom services

India's telecom sector has been on a roller-coaster ride since the entry of Reliance Jio in 2016. Jio's entry into the market changed the game for incumbents who, until then, were charging high tariffs from consumers for basic voice and 2G/3G data services. 

For the first time in the country, voice calls became free, and data – the new oil – started being handed out to consumers at extremely low rates. Going through a massive churn, the telecom industry of India took on millions of new users, and the existing ones happily jumped ship from one telecom operator to another, lured by the promise of "affordable tariffs." 

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However, what many of us didn't realise at that time was that the "affordable tariffs" and freebies would bring with them their own set of problems.

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Despite all the choices, the result is the same. (Photo: PTI)

Lack of infrastructure

Extremely low tariffs and a sudden influx of new telecom users in the country put increased pressure on the already burdened telecom infrastructure of the country. Declining profits – and many telecom operators even running into losses – added to their problems and hampered their ability to improve the infrastructure at hand.

And even operators such as Reliance Jio and Airtel who were flush with money found it difficult to cut through the red tape and quickly fix the bottlenecks that plagued their networks. So much so that despite pouring in thousands of crores, the quality of services provided by them remains quite poor in most parts of the country. 

The measure of the situation can be gauged by taking a look at this report by Open Signal. Published earlier last year, the report explains how India, despite making it to the list of top 15 countries in terms of 4G LTE connectivity, is ranked 74th – even below Pakistan – in terms of 4G data transfer speeds. 

TRAI steps in

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With slow internet speeds and call drops becoming a major issue, over the last year and a half, India's telecom regulatory body, TRAI, has stepped in a number of times to take stock of the situation. Previously, it warned operators to improve the quality of their services or face its ire. 

But with internet speeds, as well as call connectivity, still remaining as big an issue as it was a year ago, TRAI has now slapped penalties on all major telecom operators, including Reliance Jio, Bharti Airtel and the now merged Vodafone Idea entity, for failure to meet various service quality benchmarks for the March quarter.

As per a PTI report, “the fines cover various parameters and service areas, and all the operators are in the process of making the payment.”

The sternest punishment, however, has been meted out to Reliance Jio, which has been asked to pay a fine of Rs 34 lakh, while the country’s other big name operator, Bharti Airtel, has been asked to pay a fine of Rs 11 lakh. Vodafone and Idea have been slapped with fines of Rs 4 lakh and 12.5 lakh.

It is interesting to note that these fines are for the first three months of the year.

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So many towers. Such little service. (Photo: Facebook)

Why it’s not enough

The fines imposed for failing to live up to TRAI’s Quality of Service (QoS) benchmarks that came in effect from October 1 include a number of quality parameters, including Point of Interconnect congestion, accessibility of call centres or customer care, and percentage of calls answered by operators (voice to voice) in a set timeframe.

Though a step in the right direction, TRAI’s QoS benchmarks still does little to pull up operators for the poor state of data services in the country. To date, India remains one of the worst countries when it comes to mobile broadband speeds.

But, even if we ignore that for a second and focus on the fines itself, it becomes clear that the punishment given to the operators is not really something that will bother them too much.

Case in point, Reliance Jio – the company which has been slapped with the harshest fine of Rs 34 lakh.

Though a lot of money on paper, Rs 34 lakh, however, is pocket change for a company which is valued at well over $30 billion and has invested over 2.5 lakh crore in building up its telecom network in the last two years.

Similarly for Airtel – again valued at over $30 billion – the Rs 11 lakh fine will be little motivation to spend lakhs of crore on improving its network’s capacity.

What can TRAI do?

For starters, not slap the telecom operators with token fines.

The fact is that if TRAI is actually serious about improving the quality of telecom services across the country it will have to make the telecom operators realise that there will be serious consequences if they don’t improve their networks. The fines have to be much harsher and have to be followed by other steps that threaten the business of non-compliant telecom operators.

Suspension of licenses, not token fines, is the way to fix things.

And TRAI should understand that.

Last updated: September 11, 2018 | 17:27
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