Call drops are not acceptable

In my book titled Customer Icebergs, I have discussed the subject of call drops and have stated that mobile companies actually benefit with call drops which is what Hindustan Times reported today. Mobile companies have no incentive to reduce call drops because of the following reasons:

(a) They are able to generate more revenues by adding new customers with out making any investment in the infrastucture.

(a) When customer experience call drops, the revenue of mobile company increases without a corresponding increase in costs. This is well explained in the Hindustan Times article. If mobile user is being charged at the pulse rate of 60 seconds and the call drops after 3 seconds, he will be charged for 60 seconds. If he calls again to complete his call lets say in 30 seconds, he gets charged again. What this shows is that he will get charged twice.

There are various ways in which this problem can be fixed, some of which are as follows:

(a) We need to establish a basic thum rule / formula for establishing the maximum number of customers that a mobile company can have based on its technological resources (I am not a technical guy but I think the capacity of mobile companies are based on resources like spectrum/towers etc).

(b) Mobile companies have suggested that spectrum is a constraint which is in government hands which is not a controllable factor. As I have stated earlier, all the mobile company owners are used to working with scarce resources. So they should expand their subscriber base according to the resources available. I can also give an argument that they give me the money and I will be able to expand the capacity of the network with the same spectrum. I am basing this on the comments by industry experts who have said that the problem is that mobile companies have not invested adequately in building their networks to serve the fast expanding customer base.

(c) Another argument they may give is that of congestion at peak time and availability of network capacity at other times. We can also establish a norm for call drop rate. So if they violate this norm they are penalized heavily.

(d) Another argument that they have given is that let the service quality be monitored by the competitive forces. Why do we need government interference in the mobile industry. This is the only argument of theirs which puts me on the defensive as I am a staunch believer of free competition. However, my response to their requirement is as follows:

* It is illegal for them to cheat customers. With call drops they are cheating their customers which is not a competitive issue, it is legal issue and a public interest issue. Similarly, mobile companies habit of charging customers for services not ordered by them is a legal matter of cheating the general public and falls well within the domain of government regulation. Now why should the customer pay twice for the same call. So I suggest that the mobile companies figure out a way to compensate the customer for call drops and I will support them on the issue of free competition.

* Secondly, our anti-competitive and MRTP laws are not very strong. We have recently had Jet and Kingfisher getting into an agreement which is anti-competitive and illegal in all non-banana countries. Just a few weeks ago, all the airlines together increased their prices and nothing much has been done about it. So I am not sure what members COAI talk about when they meet. How is it that every mobile company has adopted the illegal practice of billing their customers for services not ordered?

* When it suits the mobile companies they talk about free competition but not when it is not in their interest to do so. What about a number of mobile companies getting together to form telecom tower companies? I believe these guys went to the government to get clearance for this totally illegal and anti-competitive act. Its like all the car manufacturers having a common manufacturing plant. What happens to the theory of free competition.

* What about number portability? These same companies have given all kinds of logic to delay the implementation of number portability. Even now the proposal is that the customer has to pay for changing the service provider which is unfair. If I as the customer wants to change my service provider because of poor service, I have to pay to get rid of him. Lets take this further. If the second service provider gives me poor service, I have to again pay. There is no other industry except maybe cable where the customer suffers whenever he changes his service provider because of poor service.

It is obvious from above that mobile companies should be held accountable for service quality levels. It is well known that when self regulation doesn’t work, government has to intervene.

Avinash Narula

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