NAIROBI, Kenya — The Communications Authority of Kenya (CAK) has ordered a phased reduction of mobile and fixed call termination rates over the next four years, lowering the benchmark from Sh0.41 per minute to Sh0.30 by March 2029.
In a determination issued in December 2025, the regulator directed all licensed mobile and fixed telecommunications operators to implement new Mobile and Fixed Termination Rates (MTR/FTR) effective March 1, 2026.
Under the new schedule, termination rates will reduce as follows:
- Sh0.37 per minute (March 1, 2026 – February 28, 2027)
- Sh0.35 per minute (March 1, 2027 – February 29, 2028)
- Sh0.33 per minute (March 1, 2028 – February 28, 2029)
- Sh0.30 per minute (Effective March 1, 2029)
The current rate of Sh0.41 per minute will remain in force until the new framework takes effect.
Cost-Based Pricing Model
CAK said the review followed a comprehensive 2022 Telecommunications Network Cost Study, which found that prevailing termination rates were significantly higher than underlying network costs.
The regulator stated that the phased glide path will align Kenya’s rates with long-run cost-efficient levels and international best practice.
“In undertaking the review, the Authority considered the need to strike a balance between promotion of investment, protection of consumers and prevailing economic conditions,” the determination reads.
The revised rates will apply strictly to local voice traffic, meaning calls originating and terminating within Kenya.
Regulatory Authority and Legal Framework
CAK derives its mandate from Sections 84R, 84W, and 85A of the Kenya Information and Communications Act, 1998, which empower it to regulate interconnection arrangements and enforce cost-oriented pricing to promote efficiency and competition.
Interconnection rates are critical in the telecom sector because they determine how much one operator pays another to terminate calls on its network. High termination charges can create barriers to entry and reduce competition, often translating into higher retail call tariffs for consumers.
The regulator clarified that the MTR/FTR rates are a price cap, allowing operators to negotiate lower interconnection rates if commercially agreed.
Operators have been directed to amend their interconnection agreements in line with the determination and file Deeds of Variation with the Authority by February 15, 2026.
Market Impact
Analysts say the gradual reduction is likely to intensify competition among dominant and smaller telecom operators by lowering wholesale costs. Over time, this could place downward pressure on retail voice tariffs.
However, telecom companies may need to adjust revenue models, particularly as voice revenues continue to decline amid rising data consumption and digital services uptake.
CAK indicated that once the market reaches the Sh0.30 benchmark, a further review will assess emerging cost trends, competitive dynamics, and technological developments.
The determination forms part of Kenya’s broader ICT sector reforms aimed at enhancing consumer welfare, promoting fair competition, and strengthening regulatory certainty in a rapidly evolving telecommunications landscape.
