Communications Authority Announces Major Slash to Mobile Connection Fees

Kenya’s telecommunications industry is braced for a significant shift as the industry regulator prepares to slash the costs operators charge one another to connect calls.

The Communications Authority of Kenya (CA) has unveiled a four-year roadmap aimed at systematically reducing “termination rates” the wholesale fees paid when a call moves from one provider’s network to another.

Under the new directive, the cost of connecting a call will drop from the current KES 0.41 per minute to KES 0.37, effective from March 1 this year.

This marks the beginning of a downward trajectory that will see rates fall to KES 0.35 in 2027, KES 0.33 in 2028, and eventually bottom out at KES 0.30 by 2029.

According to the regulator, this final figure aligns with a 2022 government cost study, which identified KES 0.30 as the “true, realistic” cost of connecting a call.

Historically, these Mobile and Fixed Termination Rates (MTR/FTR) have been inflated well above actual network costs.

Consequently, ordinary customers have inadvertently “picked up the tab,” as these high wholesale fees were baked into the retail price of airtime.

However, the CA’s logic is that by lowering the barrier for networks to talk to each other, competition will inevitably intensify.

Furthermore, there is a strong precedent for this move; a similar intervention in 2010 sparked a dramatic price war, resulting in a tumble in retail call prices across the board.

David vs Goliath

While the news is a boon for consumers, it presents a mixed bag for the industry’s heavyweights.

• Larger operators: Giants like Safaricom, which traditionally receive more in termination fees than they pay out, are expected to see a “pinch in revenue.”

• Smaller operators: Conversely, boutique providers currently spend heavily to terminate calls on larger networks. Lower rates represent a reduction in running costs, potentially allowing them to price their services more aggressively.

The transition is already in motion, as the CA set a deadline of February 15 for operators to update their interconnection agreements.

Once the rates hit the KES 0.30 floor in 2029, the Authority has pledged to carry out a “fresh review” to evaluate the state of the market.

For the time being, the message from the regulator is clear: the era of expensive cross-network calling in Kenya is coming to an end.