The link between lower MTRs and retail tariffs remains indirect, with operators retaining discretion over how much of the cost savings are passed on to consumers.
Off-network calls in Kenya have crossed the five billion-minute mark for the first time in a single quarter, signalling a structural shift in how subscribers communicate across mobile networks amid falling interconnection costs and evolving pricing dynamics.
Off-net calls refer to the telephone calls you make to a person outside your operator's network, for example, calling someone on the Safaricom network using your Airtel SIM card.
Latest data from the Communications Authority of Kenya (CA) shows that off-net voice traffic rose to 5.3 billion minutes in the three months to last December, up from 4.3 billion minutes in a similar period a year earlier.
This came as on-net calls — those made within the same network — stood at 26.2 billion minutes, placing off-net traffic at 16.9 percent of total voice usage during the quarter.
The latest figures mark a continuation of a shift in Kenya’s telecoms market, where cross-network communication is steadily gaining ground against traditionally dominant on-net calling patterns.
When the battle over Mobile Termination Rates (MTRs) first gathered steam in 2010, off-network traffic was a marginal feature of Kenya’s voice landscape, accounting for just 171.2 million minutes in the quarter to December that year against 4.3 billion on-net minutes.
That meant cross-network calls made up only 3.8 percent of total voice traffic, highlighting a market structure heavily skewed toward intra-network communication in a market dominated by one large operator.
That imbalance reinforced concerns among smaller operators that high interconnection charges entrenched the dominance of larger players by making off-net calls significantly more expensive.
Fifteen years on, the structure of traffic has shifted markedly, even as on-net calls continue to dominate in absolute terms.
The rise to 5.3 billion off-net minutes represents nearly a thirty-fold increase from 2010 levels, while the share of cross-network calls has more than quadrupled to 16.9 percent.
The widening share of off-net calls signals a gradual erosion of the insular calling patterns that once defined Kenya’s mobile ecosystem, with consumers increasingly indifferent to network boundaries.
Operator-level data shows that Airtel Kenya accounted for the largest share of off-net traffic at 3.7 billion minutes during the quarter to last December, followed by Safaricom with 1.6 billion minutes.
Telkom Kenya recorded 16 million minutes, as smaller players Jamii Telecommunications Limited (JTL) and Equitel posted 13.8 million and 12.4 million minutes respectively.
The shift in traffic structure has been largely driven by successive reductions in MTRs, which are the wholesale charges operators pay each other to complete inter-network calls.
The MTR stood at Sh4.42 per minute in 2010 before the regulator initiated a series of cuts aimed at lowering interconnection costs and promoting competition.
The rate was reduced to Sh2.21 in 2010, then to Sh1.44 in 2011, and subsequently to Sh1.15 in 2012 as pressure mounted to align pricing with underlying costs.
A further reduction to Sh0.99 in 2015 was followed by a prolonged freeze, during which the rate remained unchanged for six years despite major shifts in the telecoms landscape.
The next major adjustment came in March 2024, when the regulator set the MTR at Sh0.41 per minute following a negotiated settlement with industry players.
The pricing regime entered a new phase on March 1 this year when the MTR was reduced to Sh0.37 per minute as part of a four-year glide path aimed at aligning interconnection costs with efficient market levels.
The downward trajectory reflects a broader policy objective aimed at reducing barriers to cross-network communication, as well as fostering a more competitive telecoms environment.
Lower termination rates reduce the cost of off-net calls, giving operators greater flexibility to bundle cross-network minutes without significantly eroding margins.
This has contributed to the steady rise in off-net traffic, as consumers face fewer price penalties for calling across networks.
The link between lower MTRs and retail tariffs, however, remains indirect, with operators retaining discretion over how much of the cost savings are passed on to consumers.
During the quarter currently under review, the average industry voice tariff stood at Sh3.47 per minute, down from Sh3.92 a year earlier.
The limited pass-through reflects changing market dynamics, where voice services are increasingly bundled with data and SMS, making per-minute pricing less transparent.
Telecom operators are also contending with rising costs related to network expansion, energy, and spectrum, which offset the impact of lower interconnection charges.
