The value of Safaricom’s #ticker:SCOM Bonga Points, a customer loyalty award scheme, has hit Sh3.3 billion, meaning subscribers are yet to claim merchandise, airtime or data credit worth the amount.
The telco, in its latest annual report, says the loyalty points increased by 28.8 per cent from the Sh3.23 billion recorded at the end of March 2016 financial year.
Safaricom accounts for Bonga Points as a liability in its books in keeping with accounting guidelines, and only recognises them as an income when customers redeem their gifts.
Customers accumulate the points based on their service usage patterns, earning a point for every Sh10 spent on voice calls, short messages service, data and M-Pesa services.
“The growth in Bonga Points is a natural result of the continued growth in our customer numbers as well as the increasing number of services and products which are rewardable on our network,” chief executive Bob Collymore told the Business Daily.
“This is not a concern because we view Bonga Points as a reward to customers for their continued use of our services.”
This liability also includes points earned by Safaricom’s Enterprise Business upon achieving monthly revenues targets.
Bonga Points, which were introduced in 2007, eat into the telco’s revenue given that accounting guidelines require the firm to only recognise the loyalty points as sales once customers redeem the credits. This has seen Safaricom innovate new ways through which customers can redeem their points.
The telco recently partnered with retailers such as Naivas Supermarkets to launch Bonga Popote, a scheme that allows subscribers to use their points to make purchases at the retail chain.
Safaricom has also revealed a further Sh3.4 billion in deferred revenue, mostly from unused airtime on bundled packages.
This represents a 23 per cent increase from the previous financial year.
This unrealised revenue, the telco says, also includes Sh243 million it expects “for managed services to be rendered in the next financial period under the National Police Service contract”.
Safaricom has also seen the deposits it holds for its postpaid customers increase by Sh119 million to Sh1.1 billion.