The Telecom Regulatory Authority of India (TRAI) is reportedly considering a review of the pricing methodology for backhaul spectrum, a move that could bring relief to financially stressed telecom operators, particularly Vodafone Idea Limited (Vi). TRAI will soon release a consultation paper to discuss the proposal with industry stakeholders.
Currently, telecom companies pay between 0.15 per cent and 3.95 per cent of their adjusted gross revenue (AGR), or roughly Rs 45 billion to Rs 55.50 billion annually, as spectrum charges for using backhaul carriers. These fees increase with the number of carriers in use.
Vi bears the highest cost due to its extensive use of backhaul carriers inherited from both Idea Cellular and Vodafone India prior to their 2018 merger. The company chose not to surrender any of the carriers post-merger, as doing so would have required expensive equipment replacements, an unviable option for the cash-strapped operator.
In contrast, Bharti Airtel pays a lower percentage, and Reliance Jio the least, owing to their smaller number of backhaul carriers. As industry AGR increases, so too does the financial outlay for using backhaul spectrum.
Backhaul spectrum, used to connect telecom towers, is distinct from access spectrum acquired through auctions. It includes bands such as 7 gigahertz (GHz), 13 GHz, 15 GHz, 18 GHz, and 21 GHz. The E band (71–76 GHz and 81–86 GHz) is now being utilised for 5G backhaul, while the V band (57–64 GHz and 64–71 GHz) has yet to see significant adoption.
