The value of unused airtime and data bought by Safaricom customers has more than doubled from last year’s figure.
The total amount of unused airtime and data bundles has risen to Ksh2.1 billion from last year’s Ksh 0.9 billion, a 133.3% rise. The rise is because of the telco’s decision to offer its customers non-expiry airtime and data bundles.
The decision to introduce non-expiry airtime and bundles was made following a public outcry that had ended up in court.
“During the year the group introduced the no expiry products under the Neo theme to ensure customers get value for what they buy. As a result, the value of unutilized resources increased,” a report from Safaricom reads in part.
Safaricom and other Kenyan telcos were forced to introduce the non-expiry after lawyer Adrian Kamotho sued telecoms operators Safaricom, Airtel, and Telkom Kenya over the expiry of data and loss of unused internet bundles.
The three telcos responded with the introduction of non-expiry airtime and data bundles even before the case had been decided.
The telco has also predicted a further rise in the figure as the current figure only five months use of the non-expiry product. The figure shows data as per the first quarter of 2020.
Safaricom further said that it only recognizes this amount as revenue once the customer uses the airtime or data bundles. The practice is in line with the International Financial Reporting Standard (IFRS) 15, which gives guidance on how and when to recognize revenue.
“On purchase, the billed amount is deferred and revenues only recognized when the service is rendered as either voice or SMS,” Safaricom said in the report.
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