The Telecom Regulatory Authority of India (TRAI) is considering a review of the pricing methodology for backhaul spectrum, a move that could ease the financial burden on telecom operators, particularly the financially stressed Vodafone Idea. TRAI will soon release a consultation paper to seek inputs from stakeholders on the potential revision, ETTelecom reported, citing an official familiar with the matter. For the first time, the regulator will propose pricing mechanisms for the E and V bands—high-frequency airwaves increasingly seen as crucial for 5G backhaul.
Also Read: DoT Plans to Charge Telecom Firms for High-Frequency Backhaul Spectrum
Pricing Mechanism for E and V Bands
"Pricing for E and V bands, also part of the backhaul spectrum, will be given for the first time," said the official, as mentioned in the report.
Currently, telecom operators pay between 0.15 percent and 3.95 percent of their adjusted gross revenue (AGR) annually as spectrum usage charges for backhaul airwaves. This amounts to an industry-wide outgo of Rs 4,500 to Rs 5,550 crore each year. The charges are linked to the number of backhaul carriers an operator uses, with Vodafone Idea incurring the highest costs, followed by Bharti Airtel and Reliance Jio.
High Spectrum Charges
Officials cited in the report said Vodafone Idea pays the highest percentage as it has the largest number of backhaul carriers, followed by Bharti Airtel, while Reliance Jio has the lowest number of carriers, so it pays at a lower rate.
Vodafone Idea's situation is more acute due to its continued use of the backhaul carriers inherited from both Idea Cellular and Vodafone India prior to their merger in August 2018. Surrendering those carriers would have necessitated costly equipment replacement—an expense the cash-strapped telco has been unable to bear.
Also Read: Telcos to Oppose DoT’s Move to Delicense Lower 6GHz Band, Citing 5G Expansion Concerns: Report
5G Backhaul Needs Drive Policy Shift
As the industry's AGR rises, the expenditure on backhaul spectrum usage also increases. Backhaul spectrum is used to connect telecom towers and is different from access spectrum, which is acquired through auctions. Commonly used backhaul bands include 7, 13, 15, 18, and 21 GHz, while the E band (71–76 GHz and 81–86 GHz) is primarily used for 5G backhaul. The V band (57–71 GHz), though identified, has seen limited commercial deployment so far.
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