In a potential setback for telecom operators, the government has proposed to keep charges for backhaul spectrum unchanged, despite the regulator’s recommendation for a reduction, according to the draft rules on non-auction spectrum assignment dated 17 June.
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.
In December last year, the Telecom Regulatory Authority of India () had proposed a cut in the charges that operators pay to use airwaves for backhaul spectrum. Telcos pay a percentage of their adjusted gross revenue (AGR) for such spectrum.
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.
The telecom regulator 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” since it was based on an escalating payment mechanism.
However, the draft rules of the department of telecommunications kept the charges similar to earlier levels at 0.15% of AGR for the first carrier of 28 MHz bandwidth and up to 3.95% for the 11th carrier for the microwave access and microwave backbone spectrum.
For the E-band in 71-76 GHz and 81-86 GHz, the charges are proposed at 0.15% of AGR for the first carrier and 0.3% for the second, as per the draft rules. The rules will come into effect within 30 days.
Seeking feedback
“These are draft rules and feedback is invited from stakeholders. The prices have not been reduced at this stage to avoid revenue loss to the government,” an official said on condition of anonymity.
Queries emailed to DoT, Bharti Airtel, and Reliance Jio on Friday did not elicit any response.
“The objection or suggestion which may be received from any person with respect to the said draft rules before the expiry of the aforesaid period shall be taken into consideration by the Central Government,” DoT said in the draft rules.
, Vodafone Idea and Reliance Jio together paid ₹4,068 crore in SUC to the government in 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 report released in December.
The brokerage said if the DoT accepts Trai’s recommendations, telecom operators are expected to see modest financial benefits. Analysts at IIFL Capital estimated that the potential Ebitda uplift would be less than 1% for Reliance Jio and Bharti Airtel, while Vodafone Idea could benefit by about 1.5%. The improvement would come from annual savings on SUC.
In its submission to Trai last year, Bharti Airtel said that a rational SUC model which is flat, low, and predictable must be adopted for backhaul spectrum.
“Delinking SUC from a number of carriers would not only promote efficient deployment but also help optimize access spectrum utilization and improve consumer experience,” the telco said.
Telecom operators have been paying the government 0.15% of their AGR for a single E-band carrier since 2022 as an interim measure as it was not decided whether to auction the spectrum or assign it administratively. The charges are about 3,000 times what telecom service providers in Iraq pay and 1,400 times what TSPs in Saudi Arabia pay, the Broadband India Forum had said in its submission to Trai last year.
Regulator’s rationale
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, according to its recommendations to DoT.
The Telecommunications Act 2023 provides for a non-auction route of assigning spectrum for certain services and entities such as national security and defence, law enforcement, radio backhaul and global mobile personal communication by satellites (GMPCS), among other things, under its First Schedule.
However, the draft rules have left commercial satellite internet services outside the scope of the non-auction spectrum assignment framework, further delaying the commercial rollout of satellite internet services for OneWeb, Starlink, Jio Satellite Communications and Amazon Leo.
“All the services listed under serial No. 16 of the First Schedule of the Telecom Act except GMPCS are there. GMPCS has been quietly removed from this list without any consultation/discussion by DoT,” an industry executive said.
According to a government official, the spectrum will be assigned via non-auction route, but a decision is yet to be taken on the spectrum pricing and other modalities. Security parameters are also being evaluated before giving the final go-ahead. OneWeb, Jio Satellite and Starlink have obtained GMPCS licences for the commercial rollout of satellite internet services.