Telcos urge Centre to accept Trai’s backhaul spectrum fee proposal

Telecom operators Bharti Airtel Ltd, Vodafone Idea Ltd and Reliance Jio Infocomm Ltd have urged the department of telecommunications (DoT) to accept the telecom regulator’s one-year-old recommendation to reduce the backhaul spectrum charges.

The Cellular Operators Association of India (COAI), which represents the telecom operators, said in a statement on Thursday that the existing charging structure places a disproportionate burden on backhaul spectrum.

“A simpler and more predictable charging structure will give operators greater certainty for long-term planning and allow greater flexibility in combining fiber and microwave according to geography and network requirements,” said S.P. Kochhar, director general of the COAI, adding that the issue should not be viewed merely as a reduction in operator input costs, but as a network-led reform that can support wider rollout, better quality of service, stronger resilience and more efficient use of spectrum.

Backhaul spectrum enables wireless links between mobile towers and the core telecom network, carrying voice and data traffic where fibre connectivity is unavailable, impractical or insufficient. These airwaves are not used to provide services to customers directly.

The operators pay a percentage of their adjusted gross revenue (AGR) for such spectrum, and the current mechanism is leading to higher expenses.

Operators are charged per carrier, a block or channel of spectrum used to transmit wireless signals. More carriers mean more capacity, but also higher costs.

Trai recommendations

In December 2025, the Telecom Regulatory Authority of India (Trai) proposed reducing the charges that operators pay to use airwaves for backhaul spectrum.

It proposed a reduction by up to 55% in certain microwave bands and suggested a uniform spectrum usage charge (SUC) of 0.1% per carrier, replacing what it described as a non-linear pricing structure. Trai described the earlier structure as “simply not justified” because it relied on an escalating payment mechanism.

The regulator’s reasoning for recommending a reduction was straightforward: backhaul spectrum does not generate revenue. It is an enabling input, not a consumer-facing asset. Pricing it like access spectrum, Trai argued, distorts network economics and inflates rollout costs.

However, the draft rules on non-auction spectrum assignment dated 17 June showed that the DoT kept the charges for backhaul spectrum unchanged at 0.15% of AGR for the first carrier of 28MHz bandwidth and up to 3.95% for the 11th carrier for the microwave access and microwave backbone spectrum.

For the E-band in 71-76GHz and 81-86GHz, the charges were kept at 0.15% of AGR for the first carrier and 0.3% for the second.

The telecom operators have been paying the government 0.15% of their AGR for a single E-band carrier since 2022 as an interim measure, pending a decision on whether to auction the spectrum or assign it administratively.

The Telecommunications Act 2023 provides for a non-auction route for assigning spectrum for certain services and entities, such as national security and defence, law enforcement, radio backhaul, and global mobile personal communication by satellite (GMPCS), among other things, under its First Schedule.

Operators’ view

“Trai’s recommendation for a uniform and rationalized pricing framework for traditional microwave bands is an important step towards improving network economics, resilience and service quality. Backhaul should be viewed as foundational infrastructure that enables access to spectrum to deliver its full value to consumers,” Kochhar said.

Approximately 25% of the total SUC payout relates to access spectrum, and nearly 75% relates to backhaul spectrum, even though backhaul is not itself a standalone revenue-generating resource, according to the operators.

“Moreover, it is estimated that backhaul demand could grow by three to five times over the next five years across most LSAs (licensed service areas), making a non-escalating pricing structure increasingly important,” Kochhar said.

Bharti Airtel, Vodafone Idea and Reliance Jio together paid ₹4,068 crore in SUC to the government in fiscal year 2024-25 (FY25). Of this, ₹3,051 crore or 75% was for backhaul spectrum alone. Had Trai’s proposal been in place, operators would have saved about ₹1,545 crore, according to IIFL Capital estimates in a December 2025 report.