Summary
- The telco disclosed in its 2018 annual report that the loyalty points carried by ordinary customers were valued at Sh3.5 billion at the end of March, while those held by enterprise business customers were worth Sh533 million.
- The points are accounted for as a liability on Safaricom’s books, and only translate into income once they are redeemed by customers in form of gifts, devices, airtime, short messages service (SMS) or data bundles.
- Safaricom also runs an offer to customers to use their Bonga points to make purchases at selected retail stores, eateries and chemists.
The unclaimed value of Safaricom’s customer
loyalty awards, popularly known as Bonga points, has hit Sh4 billion
after rising by 6.2 per cent in the year to March 2018.
The
telco disclosed in its 2018 annual report that the loyalty points
carried by ordinary customers were valued at Sh3.5 billion at the end of
March, while those held by enterprise business customers were worth
Sh533 million.
The points are accounted for as a
liability on Safaricom’s books, and only translate into income once they
are redeemed by customers in form of gifts, devices, airtime, short
messages service (SMS) or data bundles.
“The accrued
liability relating to customer loyalty credits of Sh3.51 billion (2017:
Sh3.32 billion) is expected to be recognised into revenue as customers
redeem their points,” said Safaricom in its annual report for 2018.
“Also included in the customer loyalty credits is an amount of
Sh533 million (2017: Sh482 million) earned by Enterprise Business
customers, which will be redeemed on maturity of their revenue
contracts.”
Safaricom also runs an offer to customers
to use their Bonga points to make purchases at selected retail stores,
eateries and chemists.
The
growth in retail customer Bonga points in 2017 stood at 2.8 per
cent—excluding the enterprise business credits— compared to 5.7 per cent
this year, indicating that customers are either cutting down on their
redemptions, or that they have increased their usage of Safaricom’s
services hence accumulating the points at a faster pace.
The
points are gained based on amounts used on various services that are
marked as rewardable, with a customer earning a point for every Sh10
spent on voice calls, SMS, data and M-Pesa services.
Safaricom
has also reported additional deferred revenue of Sh4.81 billion, up by
22.4 per cent from Sh3.93 billion in 2017, which it says is mainly in
form of unused airtime and bundled resources.
The telco added that like Bonga points, this will also be recognised as revenue when used by customers.
The
deferred revenue also includes Sh243 million for managed services to be
rendered in the current financial period under the National Police
Service contract, an amount that is unchanged from 2017.
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