Cellular Call Drops: Nuisance or Symptom of a Larger Problem?

The Telecom Regulatory Authority of India (TRAI) has recently released a consultation paper (pdf) on how customers should be compensated for cellular call drops. It is indeed a bit embarrassing for the Indian telecom industry that this has become such a major public interest issue. Customer experience on most mobile networks has worsened considerably in the recent past. Not only do the dropped calls cause tremendous inconvenience and loss of business productivity, they are also a financial burden to the customers.

It was not always like this. Indeed, our nation has to be proud of this rapid growth, from almost nothing in 2000 to almost a billion subscriptions in 2015. In just two decades, mobile telephony has become inseparable from every person’s daily life. What was once conceived as a luxury at price-points affordable only to very few people is now ubiquitous; today, more Indians have access to a cellular network (95% population) than they have to a utility like electricity (79%). 

Underlying this success story, however, is the unsavoury reality of an industry that has been plagued by cartelization, political scams and regulatory uncertainty. What should have been a sunrise sector stands as a shining example of crony capitalism, particularly in the past decade. Even though it appears that the Indian telecom industry is highly competitive, the truth is that incumbents have regularly prevented true competition from emerging. If it was the Government-owned BSNL that misused its fixed line incumbency to hurt the prospects of broadband in India, then it is the private operators that created and used policy uncertainty to prevent high quality competition in mobile. 

Coming back to the issue of call drops, invariably, every stakeholder complains that the other is to blame.

If indeed blame is to be apportioned, in my opinion, the mobile operators have to take primary responsibility. The TRAI consultation paper shows that operators have not made adequate investments to support the growing traffic. In fact, it has been said that most of the leading mobile operators have spent so much money acquiring spectrum rights that they have none left to build out the networks to effectively use the spectrum. During 2013-14, as per TRAI assessment, operators invested only Rs 9,325 crores in network equipment; in the same year, the industry invested Rs 61,162 crores in spectrum. Between 2012 and 2015, the mobile operators bid Rs 181,656 crores for spectrum, an amount close to the entire network gross block of the industry. This is over and above the Rs 37,000 crore one-time fee that the DoT has demanded from the operators (subject to the outcome of court cases) for holding excess spectrum in the past.

Mobile operators complain that spectrum prices are too high in India. Of course, the government policy of releasing small chunks of scarce spectrum at irregular intervals and setting high reserve prices is faulty. But that has not prevented mobile operators from bidding huge, unviable amounts to corner that spectrum even if it has come at the cost of required investments in network expansion. Indeed, there are now demands that spectrum in 700MHz be released by the government for which there would presumably be a mad rush. Some industry insiders say that the leading operators would rather wait to invest in building networks in the more efficient 700 MHz spectrum than in 1800 and 2100 MHz. Naturally that begs the question why so much money was spent in acquiring the latter spectrum.

There can be no denying that a lot of spectrum in India remains underutilized by the defence and other government bodies. But it is also true that private mobile operators have been extremely inefficient in using the spectrum for which they have paid huge amounts. A recent audit by the Department of Telecommunications (DoT) has reportedly  shown that better optimization of the network could result in dramatic improvements in quality of service. It has also been found that operators have set aside spectrum for data capacity expansion at the expense of their voice quality. And then we have the spectacular case of spectrum inefficiency: an operator who acquired 20MHz of pan-India spectrum in 2010 for Rs 12840 crore has not launched services even five years later.

An additional issue that has prevented network roll-out, at least in some cases, is that of permissions for tower infrastructure. Recent push-back amongst municipal authorities in permitting cell-sites in dense urban locations coupled with unnecessary and unscientific scare-mongering about the impact of radiation have added to the problem. The government needs to create certain national guidelines for critical infrastructure like cell-sites and fiber networks. The ambitions of a Digital India cannot be held ransom to by local municipalities, building societies and activists.

 

The suggestion in the TRAI consultation paper that operators should not charge for calls that are dropped is welcome: why should customers pay for a service that they did not receive? Unfortunately, the devil would be in the detail of its implementation. Envisage a scenario of a customer of Operator A calling the customer of Operator B and the call drops in the 50th second of a minute; how is it established which operator dropped the call? Should both operators not charge for that minute, in which case the more efficient operator would lose revenue due to the failure of the other? How do customers keep track of this? TRAI should provide clarification on the mechanisms for not charging and compensating customers for call drops.

The most important action, however, that the DoT and TRAI must take is to examine the real causes for the deterioration of voice networks in India by doing an actual technical audit of all the mobile networks. Instead of being pressured into giving out more spectrum to those who are seeking to corner it, they must ensure effective utilization of spectrum that has already been allocated. If commensurate capital expenditure in network expansion does not follow spectrum acquisition, then a question must be raised about the underlying strategic logic of such investment. Further, the TRAI must study if a few players are blocking effective competition by pricing spectrum out of reach of the others. Do customers really have competitive choice in terms of enough differences in service offerings, quality and prices between various operators? Are call-drops just a symptom of a bigger structural problem in the Indian telecom industry?


(Disclosure: I was associated very closely with the Tata group's telecom business for many years. I continue to remain engaged in advisory services (mostly, teaching/training) with the Tata group telecom companies and other mobile/tech companies.

31 responses
You missed one major aspect, its CORRUPTION, yes you heard it right its corruption in all telecom private players. Both at procurement and operations. The biggest corruption is in O&M for the BTS towers. This increases the cost for telco's and the number of towers required are not installed. None of the telco is able to handle it properly.
Nice post Mr Addepalli While I agree to most of it, I would like to add there are even some small fixes possible which can have very strong impact. Take example of call drops and high call volume flow - a lot of that is restricted to Tier 1 and Tier 2 cities and a lot of that actually comes from corporate India. I am referring to folks in corporate India sitting in office which is quite well connected to Internet + have good wifi access but still consuming mobile spectrum and putting strain on it. Surely those folks can use landline but that's not convenient (address book availability, mobility concerns etc). Thus a small trick of offloading that high call traffic in congested office spaces over wifi/wired broadband networks can remove hell lot of traffic from 2G/3G networks. That's already happening for data, isn't it? We just need to ensure same happens for voice calls. As you might be already aware of - latest iOS supports wifi offloading of calls natively. I guess it's Indian regulation which still prevents voice traffic over public internet (no bridging of VoIP and PSTN over the internet rule...). This is also important because one can to an extent tweak internet, ensure better wired internet connectivity in metro cities but can barely do anything about poor cell phone quality. Thanks.
Good article which everyone must read it
Call drop is a serious issue, the service providers say that low tower density is the cause - but call drop is a recent phenomenon, same locality same tower density and call drops. If low density is the only cause then the service providers should erect more tower not on and around dwellings/buildings but, on free grounds keeping radiation hazard in focus. Since residents have been objecting on towers on buildings, the Service providers might be doing intentional call drops to justify low density on people's objections on towers on buildings.
Good analysis of the issues
Nice article Srinivas Addepalli. You mentioned about audit of existing facilities infrastructure by TRAI. Shouldn't the COAI be doing the audit. I remember I hyderabad couple of years ago that a mobile operators was getting lot of flak on connectivity and they went around the city identifying blind spots. Where ever they had a blind spot they had installed a mobile tower installed on a truck. This improved the connectivity alot. I feel the COAI which fights for the industry should take the lead and perform the audit a d take remedial measures.
very nice article, and really call drops are killer for repute of telecom operators quality of service, its high time when there should be a collaborative approach from operators to share the towers and reduce the call drops , instead every operator try to invest in call drop solutions and increase the monthly bill for end customer.
very well said, Sir.
Very well said.. But r used to corruption its ultimately the customers who have to suffer
Basically we Indians lack morality,ethics,accountability to consumer,in every field,Telecom cos are not exemption.As told when corruption controlled in day-to-day life rest will take care itself.Our minds & thoughts are conditioned kuch aur kaise bhi chalta hai due to foreign rulers for centuries.Still at 69 I am optimistic my country will change under dynamic leadership of P.M.MODI.
Very nice article Srini Sir! Very well written :)
nice article, and addressed major issues
They have issue of call drops!! Here I don't have even a single network from few major operators at my Vasai location.
Very well analysis indeed !
Move away from mobile voice anyway. Lets inherit data for all our voice/video/message purposes. Wait, could that be the larger scheming agenda of these telco cartels?
Nice!
Very useful
Resort for sale in HP KULU MANIKARAN Total land 160 biga. In 12 BIGA 8 Built up cottages. Demand 37Cr. Company transfer. Land 148 BIGA Demand 18Cr. Registrey circle rate 25Lakh per biga. Total BUILT UP RESORT PLUS LAND 160 BIGA. Demand 55 cr.
Now a days, if you call somebody and he didn't pick up, Idea is charging 6-8 paise per call. Even if you give missed call to somebody, they charge 6-8 paise for first missed call.
12 visitors upvoted this post.