NEW DELHI: Telcos have urged the regulator to withdraw its order to compensate users for call drops, saying it is a ‘coercive, grossly unjust’ step that could shave off 3-5% of the industry’s $36 billion (Rs 2,37,600 crore) annual revenue and force carriers to raise tariffs.In a joint letter to Telecom Regulatory Authority of India Chairman RS Sharma Tuesday, the telcos also indicated that Trai may not have the jurisdiction to order compensation for call drops. “Such a regulation is not pursuant to the provisions of the TRAI Act. There is no violation of licence conditions by the service providers, compensation being a matter not covered under TRAI Act and this regulation is not in regard to ensuring quality of service,” the letter read.The letter, routed via industry associations representing companies such as Bharti Airtel, Vodafone India and Reliance Communications, added that the rule is unprecedented in the service industry and would lead to an increase in tariffs and litigation.Trai mandated telcos on October 15 to pay subscribers Rs 1 for every call that isn’t completed, subject to a cap of three a day, starting from January 1. Telcos must inform prepaid customers about the amount credited through messages within four hours of a call drop . For monthly-paying customers, details of the amount credited should be provided in the bill.“We’ve written to Trai to withdraw the ruling,” said Rajan Mathews, director general of the Cellular Operators Association of India. “We’re hoping that Trai will consider the points that we have raised. The present ruling only creates more problems.”Executives from telecom carriers are slated to meet Sharma on October 29 to discuss the regulation. Mathews estimated the industry’s annual revenue at $36 billion.In their letter, the telcos redflagged the financial impact of the measure, saying “3-5%” of the industry’s revenue could be hit, starting from an annual outgo of Rs 10,826 crore if 10% of the subscribers are compensated. This could escalate to Rs 54,131 crore when 50% of the subscribers get compensation.The letter notes that the regulator’s assumption that call drops amount to a deficiency of service is flawed and zero call drops are scientifically impossible. Globally, a 2% call drop rate is accepted. Even if a 1% call drop rate is accepted in India, telcos will be required to pay out at least Rs 1,083 crore a year, they added.The carriers said some users may deliberately cause calls to drop to gain Rs 3 a day as compensation. Given that the average revenue per user in India is not more than Rs 125 per month, an outgo of Rs 90 as compensation every month will hit operating profit by 7-8% and add to taxes payable to the government.“To recover this cost, operators will have to increase tariffs," the associations said. Besides, the order will lead to disputes and customers trying to enforce claims, irrespective of the reason for a call drop, which is “practically impossible” to pinpoint. “Further, this will unnecessarily inundate call centres, which is not just very costly, but will sharply deteriorate regular service to the consumer.”There can be no legitimate basis for a consumer not to exercise his or her choice of operator in a competitive market and then expect compensation from a fully compliant service provider, the telcos said.The companies reiterated their demand for adequate spectrum and a uniform policy on right of way, besides permission to set up towers on government buildings to strengthen networks, while seeking to work with the government to improve the quality of service.