It is a big victory for the telecos, and a big setback for the customers. The Supreme Court on Wednesday said telecom companies don't have to compensate consumers for dropped calls. Setting aside an order by the Telecom Regulatory Authority of India (TRAI) the top court observed that the move to penalise operators for call drops was "unreasonable, arbitrary and unconstitutional".

Telecom operators has approached the court against the TRAI ruling which mandated them to pay Rs 1 fine for every call drop, a maximum of Rs 3 a day.

They had argued that the order that penalized them was "populist" and unfair because connectivity is affected by factors beyond their control. They claimed that the additional compensation would cost them Rs 54,000 crore a year.

In its defence, TRAI argued that the operators who are making huge revenues should better their infrastructure, and the penalty was aimed in this direction.

The court has asked the Centre to make a law on call drops on the lines of the one in the US.