TRAI to ease cost burden by slashing backhaul spectrum charges by up to 50%

The Telecom Regulatory Authority of India (TRAI) is reportedly preparing to cut backhaul spectrum pricing by up to 50 per cent. The move is expected to significantly reduce the financial burden on telecom operators, saving them hundreds of crores annually.

Telcos currently pay between 0.15 per cent and 3.95 per cent of their Adjusted Gross Revenue (AGR) for using backhaul airwaves, with rates varying based on the number of carriers used. Backhaul spectrum, radio frequencies that connect cell towers, is allocated administratively by the government.

Trai's recommendations are anticipated soon, with the Department of Telecommunications (DoT) taking the final decision.

The industry’s annual payment for backhaul spectrum is estimated at around Rs 4,000 crore.

Under the current system, charges rise with the number of carriers a telco operates, calculated as a percentage of AGR using a weighted average formula.

“TRAI’s recommendations are expected in the coming days," an official told ET, requesting anonymity. “The DoT will take a final call after reviewing the proposals," an official explained to ET Telecom.

During the consultations, telecom operators sought a uniform, reduced fee for backhaul spectrum. They noted that the existing rates were established at a time when access spectrum was allocated administratively, whereas mobile spectrum is now assigned through competitive auctions—underscoring the need for a pricing rationalization.