The Communications Authority of Kenya (CA) slashed the termination rates for both fixed and mobile providers to reduce the cost of voice calls.
With carriers likely to lower off-net calling charges, this is also intended to increase market competitiveness.
This helps smaller operators and improves the market by frequently reducing the pricing difference between on-net and off-net calls. In the most recent action, CA has suggested that the Mobile Termination Rates (MTR) and Fixed Termination Rates (FTR) be gradually reduced over the next four years. During this time, the rates will move closer to the long-term cost-effective level determined in the Telecommunications Network Cost Study of 2022.
FTRs are the wholesale fees one telecom operator pays another for ending calls on a fixed-line (landline) network, whereas MTRs are the fees that operators charge one another to enable consumers to communicate across networks. The connectivity charge, which has been at Sh0.41 per minute for the past two years, will drop to Sh0.37 per minute during the first phase, which starts on March 1. This will continue until March of the following year, at which point the rates will drop to Sh0.35 per minute for the 2027–2028 cycle, Sh0.33 for the 2028–2029 cycle, and Sh0.30 for the 2029–2030 cycle.
“Undertaking the review, the authority has considered the need to strike a balance between promotion of investment, protection of consumers, and the prevailing economic and market environment, as well as best practices in the region and globally,” director general David Mugonyi said on Friday.
The CA had conducted a comprehensive Telecommunications Network Cost Study to determine the efficient cost of delivering mobile and fixed call termination services in 2022.