Senior advocate Harish Salve, appearing for telecom companies, made the submission before a bench of Chief Justice G Rohini and Justice Jayant Nath, which will tomorrow commence hearing arguments of the Telecom Regulatory Authority of India (TRAI) defending its decision.
The Cellular Operators Association of India (COAI), the Association of Unified Telecom Service Providers of India (AUSPI) and 21 telecom operators, have challenged TRAI's October 16, 2015, rule mandating them to pay consumers one rupee per call drop experienced on their networks, subject to a cap of Rs 3 a day.
He said the telcos were not breaching licence conditions, as under it, they were required to maintain 90 per cent coverage and two per cent call drops were exempted.
He said the new regulation was a "parallel regime" running along with the quality of service rules.
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Salve said the telcos across India had a consumer base of one billion and as per a technical paper of TRAI, 36 per cent of call drops were due to irregular use by consumers.
Referring to litigations against setting up of mobile
towers on the ground of their environmental impact, the telcos' counsel said while "everyone wants mobile phones, no one wants mobile towers close to their homes".
They told the court that TRAI, instead of bringing the regulation, ought to have involved the Centre, states and civic bodies to come out with a solution, as paying Rs 3 to consumers would not make call drops disappear.
On post-paid connections, they said the billing system was complex but per second pulse tariff was also available to consumers.
Singhvi, during arguments, also said the compensation the telcos are mandated to pay amounted to taxation and thus was a violation of Article 265 of the Constitution which stipulates that no tax shall be levied or collected except by authority of law. Tax cannot be imposed by way of a regulation, he said.
It had also said the compensatory rule was made due to consumer complaints that call drops were happening more often and added that call drops amounted to the service providers "breaching" the contract they have with the users.
It had further said the compensation payable by telcos would be only a "flea bite" and thus the regulation must come into force.
TRAI had told the court that telecom companies had failed to keep investments commensurate with the pace of increase in usage and growth in number of subscribers being added by them.