In today’s Finshots, we tell you why telecom companies like Jio, Airtel and Vi are annoyed with TRAI’s new regulations.

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The Story

Picture this. It’s the 18th of June 2024, and a staggering 45,000 Reliance Jio users are furiously refreshing their phones, trying to figure out why they can’t connect to the internet. Massive network outages had everyone from Mumbai to Bhopal throwing up their hands in exasperation.

But wait, there’s more! Just when we thought it couldn’t get worse, Airtel users chimed in with 9,000 complaints the very next day. Suddenly, it wasn’t just a Jio problem. It was an all-India problem, with metro cities and major hubs like Indore feeling the pinch.

It was a techie’s nightmare and a user’s headache, as people across the country grappled with dropped calls, missed messages and the undeniable inconvenience of being offline.

This meant that users struggled to access social media, OTT platforms and other internet apps for about two days. Now, these issues aren’t just minor annoyances. Connectivity blips like this can spell trouble for enterprises using cloud-based apps like Microsoft Office or Salesforce. And getting back to normal can take hours or even days, with unplanned downtime costing up to ₹1.2 lakhs per minute in India. Sounds crazy, right?

Well, TRAI (Telecom Regulatory Authority of India) has been keeping a close eye on these telecom company (telco) failures and has been wanting to improve things for customers for a long time.

That’s exactly why it issued a new set of rules a few days ago, to get telcos to improve their quality of service. And these rules are pretty strict. If they get implemented, telcos might have to compensate subscribers by extending the validity of their plans for the number of days lost due to outages. This applies if the outage exceeds 24 hours. On top of that, they could face penalties of up to ₹10 lakhs for violating the rules.

And you can imagine that telcos are not thrilled about these new rules. And guess what? They’re pointing fingers at the government and authorities, blaming them for their poor quality of service. It’s like saying, “Unless you fix things at your end, we can’t improve our services.” Sounds a bit like passing the buck, doesn’t it?

But what do the authorities have to do with this, you ask?

Well, quite a bit actually.

You could look at the Right of Way (RoW) rules, for instance. These rules dictate how telcos can use public or private property to set up towers and other network equipment. But getting these rules actually enforced has been moving at a snail’s pace. Amendments to include them in the old Indian Telegraph Act, now replaced by the Telecommunications Act, have been ongoing since 2017. Even after being added to the law on paper, they aren’t always enforced.

Local authorities often block telcos from installing small cell equipment on street furniture like traffic lights or electric poles. This equipment is crucial for boosting 5G coverage in high-density areas. Without it, 5G networks can get choppy because they use higher frequency bands with shorter ranges that are easily blocked by buildings and trees. To provide solid coverage, small cells need to be installed densely, sometimes over 200 per square kilometre. Without proper installation, 5G connections end up patchy and unreliable.

And telcos have been pressing the Central government to make RoW rules a must for all authorities.

But here’s the thing. Even if the Central government makes RoW rules mandatory, things might not improve right away. That’s because local authorities often have their own plans for city infrastructure. And sometimes these plans clash.

Take Bengaluru, for example. The city has been struggling with a mess of unkempt overhead cables, about 25,000 km of them, to be exact. In 2021, the Karnataka High Court even told the BBMP (Bruhat Bengaluru Mahanagara Palike), Bengaluru’s municipal authority, to clean up these cables.

But just when that was happening, the Central government had given telcos the green light to install new overhead cables to improve connectivity, since underground installations were causing delays. This led to a mess where authorised cables were being removed unannounced, causing network outages and frustrating customers.

So, when Central rules and local planning collide, it can lead to a lot of confusion and problems.

But it doesn’t end there. Another reason for patchy networks is something that telcos really need the government’s help with ― theft of telecom equipment. Thieves are swiping gear that connects wireless networks because it’s valuable on the black market in places like China and Bangladesh, or even on sites like eBay and Alibaba. And these thefts have been skyrocketing since October 2023, with just 4% of districts across India accounting for nearly 50% of them. Replacing stolen equipment is a major hassle for telcos and no doubt costly.

To make matters worse, local police often refuse to file FIRs (First Information Reports) for these thefts. This means that insurance companies won’t cover the losses, leaving telcos with a ₹800 crore hole in their pockets so far — ₹150 crores of that just from last year. It’s a huge headache that the government really needs to sort out.

So yeah, this is exactly what telcos mean when they’re asking the government and authorities to fix their act, before they expect telcos to fix theirs. And unless that happens, no number of rules may help improve the quality of service from telcos.

How this tug of war will end and when it will happen is anyone’s guess. For now, we’ll just have to wait and see.

Until then…

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