TRAI Hits ‘Refresh’ on Backhaul Spectrum—Telcos Hope for a Price Drop

Unknown Apr 02, 2026 750 Views

India Telecom Regulatory Authority (TRAI) is weighing a major overhaul of the pricing model for backhaul spectrum, a development that would bring needed fiscal relief to struggling telecom operators hit with exorbitant spectrum fees. The review is needed at a crucial juncture for the sector, particularly for highly indebted companies such as Vodafone Idea, and should help resolve longstanding issues regarding the cost dynamics of crucial network backbone.

Background and Existing Scenario

Backhaul spectrum is needed for interconnecting telecom towers and is different from access spectrum, which is procured through auctions.
Telecom operators currently pay 0.15% to 3.95% of their adjusted gross revenue (AGR), which equates to ₹4,500–₹5,550 crore a year as spectrum fees for backhaul carriers.
The fee increases with the number of carriers used. Vodafone Idea pays the highest charges due to its extensive use of backhaul carriers, followed by Bharti Airtel and then Reliance Jio.

TRAI’s Proposed Review

TRAI is set to release a consultation paper to discuss potential changes in the pricing methodology with all stakeholders.
For the first time, E band (71–76 GHz and 81–86 GHz) and V band (57–64 GHz and 64–71 GHz) spectrum pricing—both key to 5G backhaul—will be dealt with explicitly.
The step is intended to make charges more rational and bring in new pricing structures for the high-capacity bands, not used extensively till date, particularly the V band.

Industry Impact

As the sector's AGR grows, so does the financial expenditure of employing backhaul spectrum, adding to the financial burden on operators.
Vodafone Idea is in an especially difficult spot since it still employs all backhaul carriers prior to its 2018 merger, skipping expensive equipment changes but paying more for spectra.
The review has been viewed as a step to alleviate the financial pressure on telcos to enhance their prospects to invest in network growth and 5G deployment.

Next Steps

DoT expects to approach TRAI for suggestions on the price of E and V band spectrum, with an eye to possibly abandoning the auction route and going for a fixed-fee or administratively derived pricing regime.

Stakeholder consultations will inform the final recommendations, which may set a new precedent for spectrum pricing in India's rapidly changing telecom environment.

Sources: Economic Times

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