Call Drop issue tickles Bharti Airtel

Bharti Airtel drops 2.6 per cent today in continuation with previous 4 consecutive falls and has been held responsible for dragging the markets down. Experts believe the reason behind the fall is the call drop issue that the telecom industry as a whole is facing.

The biggest bottleneck to the telecom sector is the call drop issue. Usually the calls are charged on a per minute basis. It was observed that the subscribers were charged for full one minute even if the call dropped within first few seconds of calling. The amount of such call drops is significant, which added to the subscribers' frustration.

Telecom Regulatory Authority of India (TRAI) had imposed penalties on the telecom companies for the call drop problems faced by the subscribers. Penalties included compensation of Re 1 for every call drop that could be extended up to Rs 3 per day per subscriber. However, recently Supreme Court cancelled TRAI’s so called baseless order as stating that telecom operators alone cannot be held responsible for the same.

There is already a provision for maximum call drops of 2% in the licence order prescribed by the TRAI for the telecom operators.

Accordingly the telecom giant, Bharti Airtel has come up with a tougher drop limit of 1.5 per cent. To add to it Bharti Airtel is planning to reserve Rs 100 crore specifically Rs 1 lakh for every 0.01 per cent rise in the drop, to fine itself if the permissible limit of 1.5 per cent is ever crossed.

Bharti Airtel investors remained cautious ahead of the above mentioned step from the company that may increase its costs in near term. However, in the long term Bharti Airtel may remain positive where it holds the dominant position in the wake of the ongoing pan-India 4G spectrum holdings, cell sites and fibre advantage.