The Communications Authority of Kenya (CA) has announced a major downward review of Mobile Termination Rates (MTR) and Fixed Termination Rates (FTR) that will make phone calls more affordable across networks beginning March 1st, 2024.
The regulatory authority made the announcement on Friday, November 17th, 2023, following their latest assessment and determination of interconnection rates between operators.
Maximum Termination Rate Slashed to KES 0.41 Per Minute
According to CA’s statement, the new unified MTR and FTR will be capped at a maximum of Ksh 0.41 per minute, substantially lower than the previous rate of Ksh 0.58 per minute.
“The authority has capped the MTRs and FTRs at Sh 0.41 per minute with effect from March 1, 2024,” said CA in their notice.
This new maximum allowable charge will apply equally across all mobile network operators in Kenya. The SMS termination rate has been retained unchanged at the current KES 0.05 per SMS.
Projected Boost for Consumers and Operators from Rate Reduction
CA indicated that the revised lower rates take into consideration current economic conditions, ICT market dynamics, and balancing continued investment against consumer protection needs.
“This decision will have positive outcomes for both the consumers and operators. Consumers will now enjoy access to a variety of affordable services across networks while operators will have more price flexibility in developing more affordable products,” outlined CA.
The significantly reduced interconnection rates are intended to enable more competitive pricing of phone calls across mobile networks, providing savings for consumers. Operators also gain flexibility to adjust pricing downwards and remain competitive with affordable packages.
Operators Directed to Update Agreements by February 1st
According to CA’s directive, all mobile operators are required to review and vary their interconnection agreements to align with the new rates determination. The revised agreements and Deeds of Variation should be formally filed with the Authority by February 1st, 2024 in readiness for the changes.
“Ahead of the new rates taking effect, all operators are required to vary their Interconnection Agreements in line with the Determination and file their Deeds of Variation with the Authority latest February 1, 2024,” CA directed operators.
The reduced rates for MTR and FTR will apply for a two-year period before the next review, from March 1st, 2024 to March 1st, 2026.
Lower Calling Rates Welcome Relief as Cost of Living Rises
The move to significantly cut termination rates has been positively received considering the prevailing economic hardships and rising cost of living facing many Kenyans. More affordable calling rates will provide relief to consumers grappling with increasing prices for basic commodities and services.
Telecommunication companies are expected to undertake reviews of their pricing and release new rates aligned to the directive’s reductions in termination rates. This will enable greater affordability of mobile and fixed line calls for subscribers across networks.
Full details of the determination have been availed on the CA website. Additional updates and information can also be obtained directly through the Authority’s communications office via mobile and email.
The directive demonstrates CA’s commitment to ensuring meaningful consumer protection outcomes and a more competitive telecommunication sector that delivers cost-effective services.