TRAI Likely to Make Cost of Backhaul Spectrum Cheaper for Telcos: Report

The Telecom Regulatory Authority of India (TRAI) is likely going to reduce the financial burden for the telcos that comes with backhaul spectrum. This won’t be entirely removed, the cost will still be there, but it will reduce by up to 50%. According to data, the telcos pay somewhere around Rs 4,000 crore for accessing backhaul spectrum to the government. Now that cost can significantly reudce in the near future.

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The backhaul spectrum is used by the telcos to connect cell towers. At present, telcos pay between 0.15-3.95% to the government for the spectrum charges. The current methodology dictates the charges to be based on the number of carriers a telco has. The telcos have to pay for the backhaul spectrum by calculating it as a percentage of their adjusted gross revenue (AGR) by applying a weighted average formula.

Once the TRAI rolls our recommendations for this, the government or the Department of Telecommunications (DoT) will take the final call on the matter. The telcos have sought for a standard or a fixed rate for the backhaul spectrum charges. Earlier when the telcos were provided the backhaul spectrum administratively, it was done at a fixed rate. However, now a percentage of the AGR has to be calculated for the same since the time the government started offering the spectrum via auctions.

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