5G Backhaul Spectrum: Pricing Cuts & Telecom Relief

India's TRAI may cut backhaul spectrum pricing by 50%, easing telecom firms' financial burden & saving crores annually. This move will benefit telcos and end users both.

After the 5G spectrum auction in 2022, airwaves in the E band were offered provisionally to telecommunications companies on a management basis for 5G backhaul.

After the 5G spectrum auction in 2022, airwaves in the E band were given provisionally to telecom companies on a management basis for 5G backhaul. While both the regulatory authority and the DoT were open to auctioning backhaul spectrum previously, the notice of the brand-new Telecom Act changed the scenario. According to the Act, backhaul range has to be provided administratively. The regulator will certainly currently mull over pricing accordingly.

Backhaul Spectrum Pricing Reduction

The Telecommunications Regulatory Authority of India (Trai) is likely to reduce backhaul range pricing by as long as 50%, according to individuals acquainted with the matter, a relocation that would ease the monetary concern of telecom drivers and permit them to conserve a few hundred crores each year. Telcos currently pay 0.15-3.95% of their modified gross earnings (AGR) as fees for utilising backhaul airwaves. The rate differs depending upon the number of backhaul carriers utilized.

Backhaul spectrum, or the superhigh frequency used by telecom companies to connect cell towers, is offered administratively by the federal government. Under the existing method, the cost for the airwaves escalates based upon the variety of carriers a telco is and has calculated as a portion of AGR by using a heavy typical formula. The telecommunications sector currently pays regarding Rs 4,000 crore annually for using backhaul spectrum, according to industry executives.

Financial Relief for Telecom Companies

Telecom cos are on the brink of a major financial alleviation, with potential cuts of as much as 50% on backhaul spectrum fees on the horizon. The Telecom Regulatory Authority of India is set to make this game-changing decision, concentrating on lifting the weight off telecommunications drivers’ shoulders.

Backhaul spectrum contains microwave accessibility (MWA) and microwave backbone (MWB) frequencies. Authorities told ET that Trai is taking into consideration reducing prices for MWA carriers by around 50%, while fixing a reduced flat rate for MWB service providers. More affordable backhaul range would profit not just telcos but additionally end users, the sector feels.

The Telecommunications Regulatory Authority of India (Trai) is likely to lower backhaul range pricing by as much as 50%, according to people acquainted with the matter, a step that would ease the monetary problem of telecom drivers and permit them to conserve a couple of hundred crores every year. Backhaul range, or the radio frequency made use of by telecom firms to link cell towers, is given administratively by the government. Presently, service providers acquire accessibility spectrum via affordable auctions and, therefore, backhaul range pricing calls for significant rationalisation.

TRAI’s Recommendations on Spectrum

“Trai’s referrals are expected in the coming days,” an official told ET on condition of anonymity. “The Division of Telecommunications (DoT) will certainly take a final call on the problem after analysing the propositions.” Throughout assessments, the telcos looked for a level and low rate for making use of backhaul spectrum. When access or mobile spectrum was given administratively, they emphasized that the pricing of the airwaves was fixed. Currently, service providers acquire gain access to range with competitive auctions and, consequently, backhaul range prices needs substantial rationalisation.

Frequencies in the 7/13/15/ 18/21 GHz bands are among those used as backhaul spectrum. The use of V band spectrum (57-64 GHz and 64-71 GHz) has not come to be prevalent so much.