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TRAI To Telecom Operators: Compensate Call Drops Or Face Automatically Disconnected Calls

|Includes: 5BARz International, Inc. (BARZ)

The Telecom Regulatory Authority of India (TRAI) wrote to telecom operators to ensure compliance with the drop call regulations that took effect on January 1. The mandate was written even as service providers remained noncompliant and said that drop call compensations will only be paid after court hearing on January 6, the Indian Express reported.

According to The Economic Times, in October 2015, the TRAI issued an amendment in Telecom Consumers Protection Regulation stating that mobile service providers should compensate their subscribers for calls dropped or an automatically disconnected call which is a result of telecom's poor network service.

The rules state that each telecom operator should pay a compensation rate of Re 1 for each drop call, which totals to Re 3 compensation cap per day.

The mandate raised both regulatory and financial issues that concerned the TRAI and telecom operators.

"The Delhi High Court last month directed Trai not to take any coercive action against telecom operators in the matter of compensation for call drops until the next date of hearing on January 6," according to the ET.

Meanwhile, TRAI remained adamant that the court has not issued any orders as of the moment which means that the mandate still stands and telcos need to follow.

Economically, analysts warned that the regulation could set off a 3 percent revenue loss and a 7-8 percent EBITDA on mobile operations annually.

"Telcos have said the call drop regulation would send a negative message to the entire investor community when more than Rs 5 lakh crore will be required over the next 10 years to expand services," according to The Economic Times.

In response, telecom operators took a stand and argued that drop calls are not entirely their fault.

In an interview to the ET, Ashok Sud, secretary general of the Association of Unified Service Providers of India (AUSPI) said that, "The matter remains sub judice, so things stand as they are. We will only pay the compensation if the court directs us to."

Sudeep Sengupta, spokesperson of the Cellular Operators Association of India (COAI) reaffirmed the telecom operators' stand that compensation should only be paid after the court decides on the matter.

He also added that telecom operators were not yet ready to implement the mandate until various complexities and issues were resolved in court.

Admittedly, telecom operators said that increased levels of drop calls in the country was due to the lack of airwaves and their inability to add more towers. However, even with the challenge of acquiring permits for the installation of more cell towers due to a radiation issue, telecom operators agreed to enhance and improve their services.

One way to improve their services is to increase mobile network signals through network extenders. A mobile technology company, 5BARz International (OTCQB: BARZ) through its subsidiary 5Barz India, introduced a revolutionary radiofrequency based network device that is able to strengthen weak indoor signals.

This single plug-and-play device can be used by simply plugging it in any power outlet. It can enhance network signals and can cover an area of up to 4, 000 square feet.

The company has already completed its product rollout to top "Tier One" operators in the country.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.