The World Bank has reignited focus on the rate mobile phone operators in Kenya charge each other for calls made across networks, saying consumers have been denied cheaper calls as the sector regulator postpones the adoption of cost-based pricing.
The current mobile termination rates (MTRs) set by the Communications Authority of Kenya (CA) are set to lapse in February 28, 2026, opening a window for fresh cuts even as the World Bank, which significantly influences Kenya’s policy decisions through financing, technical advice, and policy recommendations, said that the prevailing rates are still high despite successive cuts and urged a reduction of the wholesale cost.
After another battle pitting Safaricom against the Communications Authority of Kenya and rival telcos (Airtel Kenya and Telkom Kenya), the regulator cut the MTR per minute from Sh0.58 to Sh0.41 effective March 1, 2024.
The regulator had planned to reduce the charge to as low as Sh0.12 per minute, effective January 1, 2022, but faced fierce opposition from Safaricom, which is the net beneficiary of the fees based on its leading market share in the voice business.
The World Bank says the delay in drastic cuts to MTR has seen Kenya lag behind other countries, including Tanzania, which has a charge equivalent to Sh0.088 per minute and is set to chop it further in the coming years.
“Kenya has yet to fully implement cost-oriented or pro-competitive mobile termination rates. These create club effects that favour larger operators, because networks with fewer customers must pay MTRs on a higher share of calls their customers make,” the global financier says in its latest Kenya Economic Update.
“The MTR caps set by the Communications Authority are higher than rates in comparable peers like Tanzania and Ghana and significantly above cost,” the institution, which is a major financier of the Kenyan government, added.
Safaricom has a top tariff of Sh4.87 per minute for calls on its network as well as to rival telcos, according to a communication to clients seen by Business Daily.
Airtel has a top tariff of Sh4.3 per minute for both on-net and off-net calls, according to its website. The mobile telephony firms, including Telkom Kenya, also have much lower voice tariffs for both on-net and off-net calls, depending on the bundle or promotion being run.
The charge per minute can fall below Sh1, especially for on-net calls, supporting analysts' view that the MTR should reflect the low cost of providing voice services.
The World Bank noted that a 2022 study by CA found that the cost of MTR in Kenya is Sh0.06, well below the current level.
“Mobile termination rates for voice and SMS are important for the poorest –half of the bottom 40 percent of the population only have a basic phone and daily use of phone calls is over four times that of the Internet,” the multilateral lender said in the report.
In its successive efforts to lower the MTRs, the regulator has said the policy decisions are aimed at reducing call rates for consumers by promoting competition.
The current MTR is set to expire on February 28, 2026, meaning that the regulator is expected to prepare to make another review of the interconnect fee.
While Kenya has struggled to make aggressive MTR cuts, Tanzania has committed to slashing its charges even further in the coming years. Tanzania's current MTR of Tsh1.68(Sh0.089) will drop to Tsh1.60(Sh0.085) effective January 1, 2026.
It will fall further to Tsh1.52(Sh0.081) on January 1, 2027. Other countries in the region are also trimming the interconnect fees in the race to boost the affordability of voice services.
Uganda in September last year slashed its MTR to 26 Ugandan shillings (equivalent to Sh0.95) from the previous 45 Ugandan shillings (Sh1.64).
Telcos with leading market shares, such as Safaricom and MTN Uganda, have been on the losing side of the declining MTRs, with their collections from their rivals falling by billions of shillings.
Safaricom has seen its revenue from interconnect fees drop by more than Sh2 billion per annum since Kenya embarked on its downward MTR glide path from highs of Sh2.21 per minute in 2010.
The Nairobi Securities Exchange-listed firm is the net beneficiary of the charges since it has a leading market share in the voice business, meaning that most calls terminate on its network.
Data from the CA shows that Safaricom had a market share of 63.4 percent in the quarter ended June 2025, recording 18.49 billion minutes against the industry total of 29.16 billion minutes.
Only 7.9 percent or 1.46 billion of Safaricom’s minutes represented calls made to rival networks. Telkom is the most squeezed by MTR, with more of its subscribers calling Safaricom numbers than within its network, and leaving it to pay a hefty price to the major telco.
Telkom’s on-net calls were 17.3 million minutes, while off-net calls stood at 17.4 million minutes. Nearly 30 percent of Airtel’s calls go to its rivals, with the company also incurring substantial interconnect fees.
Airtel had 3.1 billion minutes of outgoing calls, while 7.4 billion minutes were in-house. While Safaricom has been dominant in the Kenyan market, it is an underdog in Ethiopia, where it is counting on MTR cuts to grow its startup operation.
