If you have ever wondered why your airtime vanishes faster than it should, the World Bank has an answer: you are paying for a regulatory delay. In a stinging critique released this week, the global lender revealed that Kenyans are paying inflated prices for voice calls because the Communications Authority of Kenya (CA) has failed to implement cost-reflective tariffs.

The verdict from the Kenya Economic Update is blunt. While the cost of connecting a call between networks has plummeted, the savings are not reaching your wallet. Instead, a regulatory logjam is protecting the profits of dominant players while squeezing the mama mboga who relies on her phone to run her business.

The 'Hidden Toll' Keeping Prices High

At the heart of the issue is the Mobile Termination Rate (MTR)—the fee one telco pays another to complete a call on their network. Think of it as a toll station: when an Airtel user calls a Safaricom user, Airtel pays a toll to Safaricom.

Currently, the CA has capped this rate at KES 0.41 per minute. However, the World Bank’s data suggests the actual cost of terminating a call is a mere KES 0.06. This means the regulated rate is nearly seven times higher than it needs to be.

“Kenya has yet to fully implement cost-oriented or pro-competitive mobile termination rates,” the World Bank report notes. “These create club effects that favour larger operators.”

The implications are massive. Because Safaricom controls 63.4% of the voice market, smaller operators like Airtel and Telkom send far more calls to Safaricom than they receive. The result? They pay huge sums in MTR fees to their dominant rival, draining resources they could otherwise use to lower prices or improve their networks.

Lagging Behind the Region

While Kenya drags its feet, its neighbors are moving fast to lower costs for their citizens. The contrast is stark:

• Kenya: KES 0.41 per minute (current MTR).
• Tanzania: Approx. KES 0.09 per minute (dropping to KES 0.08 by 2027).
• Uganda: Approx. KES 0.95 per minute (recently slashed from KES 1.64).

“The delay in drastic MTR cuts has left Kenya behind other countries in the region, slowing affordability and market efficiency,” the World Bank warned. While Tanzania is aggressively cutting rates to boost digital inclusion, Kenya’s hesitation is effectively a tax on communication.

The 'Kabambe' Economy Hit Hardest

This is not just a corporate battle between billionaires; it is a cost-of-living issue. The report highlights that for the bottom 40% of Kenyan earners, voice calls are a lifeline. Half of this demographic relies on basic feature phones (kabambes), making voice calls four times more common than internet use.

When wholesale rates remain artificially high, retail prices stay sticky. Safaricom currently charges up to KES 4.87 per minute, while Airtel tops out at KES 4.30. If the MTR were slashed to the recommended KES 0.06, analysts believe these retail prices could drop significantly, putting money back into the pockets of millions of households.

A History of Delay

The CA is not entirely inactive, but its pace has been glacial. In March 2024, the regulator cut the MTR from KES 0.58 to KES 0.41. But this was a compromise. The CA had originally planned a much deeper cut to KES 0.12 back in 2022, a move that was fiercely opposed by Safaricom in the courts and boardrooms.

Safaricom has consistently argued that drastic cuts would punish them for their investment in infrastructure. However, the World Bank argues that the current system stifles competition. The report also flagged outdated rules on tower sharing and spectrum allocation, which continue to favor incumbents.

The current MTR regime is set to expire on February 28, 2026. With the World Bank turning up the heat, the CA faces a critical test: will it side with corporate profits or the Kenyan consumer?