Trai may review pricing method for backhaul airwaves

New Delhi: The Telecom Regulatory Authority of India (Trai) is considering reviewing the pricing methodology for backhaul airwaves, a move which could ease the financial burden on telecom operators, especially debt-laden Vodafone Idea.

The telecom regulator will soon come out with a consultation paper to discuss the modalities with all stakeholders, according to an official familiar with the matter.

“Pricing for E and V bands, also part of the backhaul spectrum, will be given for the first time,” said the official, who did not wish to be identified.


Currently, telcos pay 0.15% to 3.95% of adjusted gross revenue (AGR), or between Rs 4,500 and 5,550 crore annually, as spectrum charges for using backhaul carriers. The higher the number of carriers used, the more the fees paid.

Officials said Vodafone Idea pays the highest percentage as it has the largest number of backhaul carriers, followed by Bharti Airtel, while Reliance Jio has the lowest number of carriers, so it pays at a lower rate.

The situation is more critical for Vodafone Idea as it is continuing with all the backhaul carriers of erstwhile Idea Cellular and Vodafone India before their merger in August 2018. That is so because had the merged entity surrendered the carriers, it would have had to replace the equipment. That would have entailed more capital expenditure, adding to the cash-strapped operator’s financial burden.

As the AGR of the industry rises, the outgo for using backhaul spectrum rises too.

Backhaul spectrum is primarily used to connect the towers, and is different from access spectrum, which the telcos buy in auction.

Frequencies in the 7/13/15/18/21 GHz bands are used as backhaul spectrum. While the E band (71-76 GHz and 81-86 GHz) is being primarily used for 5G backhaul, the usage of V band spectrum (57-64 GHz and 64-71 GHz) has not become prevalent so far.

After the 5G spectrum auction in 2022, spectrum in the E band was given provisionally to telecom firms on an administrative basis for 5G backhaul.

While the regulator and the Department of Telecommunications (DoT) were open to auction backhaul spectrum earlier, the notification of the new Telecommunications Act changed the scenario. As per the Act, backhaul spectrum has to be given administratively and, therefore, the regulator will now deliberate pricing based on that.

The telcos want a fixed cost for backhaul spectrum and the price to be minimal as they have been paying market-determined rates for access airwaves.

Traditionally, backhaul carriers had been given administratively to telcos, but the practice was stopped after the 2012 Supreme Court verdict. After that, the DoT started allocating backhaul carriers provisionally. But with the Telecommunications Act being implemented now, there is clarity and a revised pricing for spectrum will be needed.