DoT sticks to legacy backhaul pricing, ignores TRAI cut proposal

The Department of Telecommunications has decided to retain the existing pricing framework for backhaul spectrum, rejecting the Telecom Regulatory Authority of India’s (TRAI) proposal to reduce charges by up to 55 percent. The move comes as a setback for telecom operators seeking relief amid rising network costs.

TRAI had recommended a shift to a uniform pricing model, proposing a charge of 0.1 percent of adjusted gross revenue (AGR) per carrier. This would have replaced the current slab-based system, under which operators pay progressively higher fees as they add more backhaul carriers.

In its draft Telecommunications (Administrative Allocation of Spectrum) Rules, 2026, released on June 17, the DoT chose to retain the existing regime. It remains unclear whether the draft will undergo further consultation or revisions.

Backhaul spectrum, which carries voice and data traffic between telecom towers and core networks, has become increasingly critical with the rapid expansion of 4G and 5G services. Under the current framework, operators pay 0.15 percent of AGR for the first carrier, with charges increasing for additional carriers based on a weighted-average formula. As data demand grows and operators deploy more carriers, the effective cost rises sharply.

TRAI had argued that a uniform pricing structure would significantly lower costs, by as much as 55 percent for operators using around five carriers, while encouraging wider deployment of microwave backhaul, particularly in regions where fibre rollout is challenging or commercially unviable. The regulator also linked lower backhaul costs to improved network quality and capacity.

However, the DoT’s decision to retain the existing pricing model means telecom operators such as Bharti Airtel, Reliance Jio and Vodafone Idea will continue to face elevated backhaul costs, even as they invest heavily in 5G rollouts, fibre expansion and network densification.
Industry stakeholders have consistently maintained that backhaul spectrum is a critical network input rather than a revenue-generating resource, and should therefore be priced more affordably.

Separately, TRAI had recommended that backhaul spectrum across multiple bands including 6 GHz, 7 GHz, 13 GHz, 15 GHz, 18 GHz, 21 GHz, as well as E-band and V-band, continue to be assigned administratively under the Telecommunications Act, 2023, rather than through auctions, arguing that such spectrum serves a complementary role to access networks.

CT Bureau