DoT retains backhaul spectrum pricing, rejects Trai's cut proposal

Mumbai: The department of telecommunications (DoT) has retained the existing pricing framework for backhaul spectrum despite the regulator proposing reductions of up to 55% to ease network costs, dealing a setback to telecom operators.

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The Telecom Regulatory Authority of India (Trai) had proposed a uniform charge of 0.1% of adjusted gross revenue (AGR) per carrier, replacing the current slab-based structure under which operators pay progressively higher fees for additional carriers.

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Trai had argued that lower backhaul costs would improve network economics, encourage greater deployment of backhaul links and ultimately enhance service quality.

However, the draft Telecommunications (Administrative Allocation of Spectrum) Rules, 2026, published June 17, restored the earlier regime, a move that will continue to be a significant cost burden on telecom companies. It wasn't clear whether the draft was open to consultation or further changes.

Backhaul spectrum is used to carry voice and data traffic between telecom towers and the core network, and has become increasingly critical as operators expand 4G and 5G networks.

Under the existing framework, telecom operators pay 0.15% of AGR for the first backhaul carrier, while charges for subsequent carriers rise progressively under a weighted-average formula. As operators add more carriers to support rising data traffic, the effective spectrum cost increases sharply.

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Trai had proposed replacing this structure with a uniform charge of 0.1% of AGR per carrier, a move that would have reduced spectrum charges by about 55% for operators holding around five backhaul carriers. The regulator said the change would facilitate cost-effective deployment of microwave backhaul, particularly in areas where fibre connectivity is difficult or economically unviable.

The draft rules notified by the DoT on June 17 did not incorporate the regulator's pricing recommendations and instead preserved the earlier charging framework, according to the Gazette notification. The decision means telecom operators such as Bharti Airtel, Reliance Jio and Vodafone Idea will continue to bear higher backhaul spectrum costs even as mobile data consumption and network capacity requirements surge.

The development comes at a time when telecom companies are investing heavily in standalone 5G networks, fibre deployment and capacity expansion. Industry executives have long argued that backhaul spectrum is an essential network input rather than a revenue-generating asset and therefore should be priced more affordably.

Trai had also recommended that radio backhaul spectrum across 6 GHz, 7 GHz, 13 GHz, 15 GHz, 18 GHz, 21 GHz, E-band and V-band continue to be assigned administratively under the Telecommunications Act, 2023, rather than through auctions. The regulator had argued that backhaul complements access networks and should not be treated as a commercial spectrum resource.