Total bonga points accumulated since initiation of the award scheme in 2007 have hit 10 billion.
Safaricom awards one Bonga point to its customers for every Sh10 spent on its network.
The value of un-redeemed customer Bonga points held in Safaricom’s books has surged by a third to Sh3.2 billion, reflecting increased liability the telecommunications company owes to its customers.
Total bonga points accumulated since initiation of the award scheme in 2007 have hit 10 billion, out of which about 80 per cent have been redeemed through exchange for airtime, text messages, data bundles and merchandise.
Safaricom awards one Bonga point to its customers for every Sh10 spent on its network, with accounting rules requiring that it provides for them as a liability in its books.
“We encourage of the points so that the programme can achieve its objective and also clear our books of accrued liability,” Safaricom said in a statement to Business Daily.
The growth in Bonga points recorded in the year to March 2013 reversed a 5.1 per cent dip recorded a year earlier where total customer loyalty credits were worth Sh2.4 billion.
Safaricom defers revenue for all Bonga points accumulated by subscribers and recognises the revenue relating to the points earned only on redemption.
The rising liability has seen Safaricom lure its customers with offers to redeem the credits for smartphones, air tickets as well as pay-TV subscription.
Merchandise redeemable through Bonga points include mobile phones, tablets, laptops and accessories such as modems and routers; free talk time, data, SMS and MMS bundles.
The accrued liabilities from Bonga points eat into Safaricom’s revenue given that accounting guidelines require the telco to only recognise the loyalty points as sales once customers redeem the credits.
This means Safaricom’s total sales for the year to March 2013 would have been 127.4 billion without the deferral of revenue.
Safaricom says it allocates the revenue deferral against voice income which grew 13 per cent to Sh77.6 billion last year, accounting for nearly two-thirds of total revenue of Sh124.2 billion.
The volume of accrued Bonga points held by Safaricom has more than doubled in the past five years from Sh1.4 billion in 2009 to gross Sh3.2 billion last year.
Safaricom last year introduced ‘Changa Na Bonga’ which allows subscribers to pool Bonga points and use the credits to purchase merchandise using part cash and part Bonga points.
However, the valuation of Bonga points has not been consistent over the years with the worth of each loyalty point varying depending on the merchandise or non-merchandise being redeemed.
Safaricom in 2009 disclosed that Bonga points redeemed against airtime was valued at Sh0.12 per point.
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