New Delhi: Telecom companies on Thursday pressed their case against mandatory compensation for call drops while the regulator justified the imposition of such penalty.

The Delhi high court, which is hearing the case, will pass an interim order or dispose of the petition filed by telecom operators on Monday.

According to a 16 October notification by the Telecom Regulatory Authority of India, telcos must credit 1 to a user for every call that ended abruptly due to poor mobile signal, subject to a maximum of 3 per day. Telcos are contesting this.

The notification was to take effect from 1 January 2016. The Cellular Operators Association of India and the Association of Unified Telecom Service Providers of India—two organizations representing telcos—challenged the notification in the Delhi high court on 11 December.

Representing telcos, lawyer Abhishek Manu Singhvi opposed the blanket compensation. “There has been no application of mind while passing such guidelines. It is called compensation but it is actually an ad hoc and arbitrary cess or tax that telecom service providers are required to pay without any fault of their own," he said.

Calling the notification arbitrary, Singhvi told the bench of chief justice G. Rohini and justice Jayant Nath that it was in violation of Articles 14, 19 and 265 of the Constitution of India.

He also told the court that call drop rate was approximately 0.75% which was well within the 2% permissible level under the quality of service benchmarks, as laid down by Trai in 2009.

Lack of mobile towers, inability to lay optic fibres in certain spaces, mobile handset technology and power failure were cited as some of the reasons for the increasing number of call drops.

Telcos suggested that any solution must be implemented in a in a phased manner, rather than imposing a blanket penalty.

Additional solicitor general P.S. Narasimha who represented Trai told the court that the guidelines had been passed after much deliberation and consultation with various stakeholders and must be enforced.

Citing the reason for such amendment, he said, “There are certain requirements under a license including extent of coverage, accessibility, bad quality of voice and retainability that need to be fulfilled by telecoms. If these are not fulfilled, a penalty is imposed on telecoms. However, the amount of penalty goes to the licensor and consumer has no role to play. We wanted to change that."

He further told the court that there was a mechanism in place to show the reason for call drops but it was not in operation.

“For the first quarter of 2015, there were a total of 25,785 crore outgoing calls of which 200 crore call drops were recorded within the network of originating service provider," he said.

Previously, an undertaking had been given by Trai that no coercive action will be taken by them till 6th January 2016.