Kenya’s mobile industry is bracing for another regulatory showdown in 2026 as current rate phone operators charge each other for calls made across networks near expiry, reopening debate over voice charges and competition in the market.
The mobile termination rates (MTRs) are a key influence on the cost of calls across Safaricom, Airtel and Telkom. When a customer on one network calls a user on another, the originating operator pays the termination fee to the receiving network.
High MTRs significantly disadvantage smaller telcos by increasing their operational costs, reinforcing the market dominance of larger operators, and creating a barrier to competition.
The existing MTRs, set by the Communications Authority of Kenya (CA), took effect on March 1, 2024 and are due to lapse on February 28, 2026.
They cap both mobile and fixed termination rate at Sh0.41 per minute, after CA cut it from the previous Sh0.58 per minute.
Once the framework expires, CA0 will be required to review and potentially cut the rates, creating room for further reductions in cost of voice services.
The last review triggered a prolonged dispute pitting market leader Safaricom against CA that was backed by rivals Airtel and Telkom.
The regulator had initially planned to slash the termination rate to as low as Sh0.12 per minute from January 2022, arguing that lower wholesale charges would stimulate competition and reduce retail call prices.
But Safaricom opposed the plan, warning of revenue losses, and the regulator eventually settled on a more gradual reduction to the current Sh0.41 per minute.
Latest CA data for the three months to September shows Safaricom controlled 61.19 percent of voice traffic, accounting for 18.3 billion of the industry’s 29.9 billion minutes.
Only about 1.43 billion of these minutes or 7.8 percent, were off-network.
Airtel and Telkom held 38.59 percent and 0.12 percent of the voice market, respectively.
Airtel handled 11.5 billion minutes, with 3.3 billion minutes (29.3 percent) terminating on rival networks, while Telkom’s much smaller base (34.8 million minutes) saw half of its calls (17.5 million) going off-network.
Operators with large subscriber bases, therefore, tend to benefit, as they receive more termination payments than they pay out.
At the retail level, voice tariffs remain well above the regulated wholesale rates. Safaricom’s top tariff stands at Sh4.87 per minute for both on-net and off-net calls, while Airtel’s published top rate is Sh4.30 per minute, with lower prices available through bundles and promotions across the market.
Smaller players argue that high termination charges limit their ability to compete aggressively on price.
Already, pressure for deeper cuts is building from outside the sector. The World Bank in November said the country lags regional peers in adopting cost-oriented, pro-competitive termination rates.
“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 lender said in its latest Kenya Economic Update.
It noted that Kenya’s caps remain significantly above those in markets such as Tanzania and Ghana, and well above the estimated cost of termination.
A 2022 CA study found the cost of mobile call termination in Kenya to be about Sh0.06 per minute, far below both the earlier Sh0.58 cap and the current Sh0.41 rate.
The World Bank argues that high MTRs create “club effects” that favour dominant operators and raise costs for smaller networks, with knock-on effects for consumers.
“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 institution, a major financier of the Kenyan government, added.
Tanzania has committed to slashing its charges further in the coming years; the country’s current MTR of Tsh1.68 (Sh0.087) will drop to Tsh1.60 (Sh0.083) effective January 1, 2026, and then to Tsh1.52 (Sh0.079) on January 1, 2027.
Uganda also slashed its MTRs in September last year to 26 Ugandan shillings (equivalent to Sh0.935) from the previous 45 Ugandan shillings (Sh1.62).
With the 2026 deadline approaching, CA’s challenge will be balancing competitive pressures and consumer affordability in a voice market that, while declining relative to data, remains essential for millions of mobile phone users.
The mobile termination rates have fallen from Sh4.42 per minute in 2010, sparking a price war that helped firms cut tariffs
It fell to Sh1.44 per minute in 2012 from Sh2.21.
Safaricom has since expanded into Ethiopia since the last MTR review and now operates in Kenya’s northern neighbour as a challenger rather than a dominant player. This creates a new dynamic that could shape negotiations this time, says sector analyst Ben Roberts.
Kenya’s biggest telco now finds itself paying significant termination charges to Ethio Telecom, which holds over 90 per cent share in Ethiopia’s voice business. Mr Roberts argues that the dual position could temper Safaricom’s stance in Kenya’s upcoming MTR discussions.
“They cannot say one thing in the Kenyan market that does not work for them in the other market,” the Kenya Private Sector Alliance ICT Sector Board chair told the Business Daily.
“Their experience in Ethiopia will influence how it approaches CA and rivals.”
