Communications Authority of Kenya (CA) has published a new four-year glide path reducing Mobile Termination Rates (MTRs) from KSh 0.41 to KSh 0.30 per minute by February 2030 — approximately 50% below 2023 levels.
The Communication Authority schedule shows that the new MTRs will be slashed to KSh 0.37 in 2027, KSh 0.35 in 2028, KSh 0.33 in 2029 and KSh 0.30 in 2030.
Mobile Termination Rate (MTR) is the interconnection fee paid by one telecom operator to another to complete a cross-network voice call.
Will reduction in MTR affect Safaricom Plc ?
Safaricom, as the dominant operator with the largest subscriber base, is typically a net receiver of termination fees (more calls terminate on its network than originate from it to smaller networks). This means that a reduction in MTR will hit its interconnection revenue and compress the high margin voice income.
While voice is no longer the primary growth driver for Safaricom, it still contributes meaningful EBITDA due to its strong margins.
Lower MTRs will also change competition dynamics by lowering barriers for smaller operators. The reduction in termination rates by the Communications Authority will also narrow cost disadvantages in cross-network calling, especially for smaller players.
Experts maintain that a lower MTR has the potential to intensify price competition in voice bundles. However, Safaricom’s scale, network quality, and bundled ecosystem (voice, data and M-PESA), cushions it from the competition.
While voice revenue for Safaricom has been declining as a % of total revenue, Safaricom has maintained its dominance through data and fintech, especially M-PESA, which are now its key earnings drivers.
Analysts say profitability sensitivity to MTR cuts today is significantly lower than it was a decade ago.
Safaricom’s margin resilience will depend more on data monetization and fintech scale than voice termination. Communications Authority Slashes Rates in Major Telecom Shakeup
Communication Authority’s significant reduction in MTR promises more affordable call charges for Kenyans.
The Mobile Termination Rate is the wholesale fee that one telecommunications operator charges another to connect a call to its network.
Historically, artificially high MTRs set by the Communications Authority have served as a punitive barrier, severely penalizing consumers who attempt to make off-net calls and effectively trapping them within a single provider’s ecosystem.
By forcefully lowering this wholesale rate, the Communications Authority is directly attacking the economic moat that has long protected dominant market players.
The cost of routing a call from an Airtel or Telkom user to a Safaricom user, or vice versa, will plummet. This reduction in operational overhead strips away the justification for exorbitant cross-network retail tariffs, forcing operators to innovate or face mass subscriber migration.
The immediate consequence of the Communication Authority’s directive is the ignition of an aggressive, multi-front telecom price war.
Smaller operators, previously suffocated by the heavy financial burden of termination payouts, now possess the fiscal breathing room to aggressively slash their retail prices to capture market share.
While Safaricom has moved to data, a cut in MTR is expected to ignite a fierce price war as dominant players lower their tariffs to match the competition from smaller players.
For the average Kenyan user or those running Small and Medium Enterprises (SMEs), which rely heavily on cross-network mobile communication to coordinate logistics and client relations, they will see an immediate decrease in operational overhead.
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