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Vodacom ordered to recalculate ‘Please Call Me’ offer

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 08 Feb 2022
Vodacom Group CEO Shameel Joosub.
Vodacom Group CEO Shameel Joosub.

In a victory for “Please Call Me” inventor Nkosana Makate, the North Gauteng High Court has ordered Vodacom to recalculate a fair compensation for the former employee’s invention.

Vodacom CEO Shameel Joosub was offering Makate compensation of R47 million in the case that has dragged on for about two decades.

However, Judge Wendy Hughes found Vodacom was not negotiating in good faith and Joosub must go back to the drawing board to give Makate a reasonable compensation.

Makate accused Vodacom of falsifying information in a bid to deny him fair compensation for his creation.

His invention enables a user without airtime to send a text to be called back by another subscriber.

Makate said his legal team calculated that “Please Call Me” earned Vodacom R205 billion in call revenue from 2001 to 2020 (a forecast), which excludes, among other things, advertising revenue linked to the innovation.

Makate reportedly wants compensation of up to R10 billion. 

In the court documents seen by ITWeb, Judge Hughes says: “To me, it is clear Vodacom is defying the Constitutional Court order to act and negotiate in good faith.”

She says Makate is entitled to be paid 5% of the total voice revenue generated from the “Please Call Me” product from March 2001 to March 2021.

The total voice revenue includes “Please Call Me” revenue derived from prepaid, contract (both in bundle and out bundle) and interconnect fees as set out in Vodacom’s annual financial statements.

In a statement to ITWeb following the ruling, Makate says: “All I can say is that I am happy with the judgement which finally provides some certainty in this whole matter.”

Vodacom has indicated it will appeal the ruling.

Says the mobile operator in a statement: “Vodacom confirms it will appeal the Gauteng High Court judgement and order on the 'Please Call Me' matter, delivered by Justice Wendy Hughes on 7 February 2022.

“Vodacom remains of the view its negotiations with Mr Makate were held in good faith, as determined in the Order of the Constitutional Court issued on 26 April 2016.”

In her ruling, Judge Hughes says two decades ago, Makate came up with a “brilliant idea” which was rated as “a world first”.

His idea was eventually developed by Vodacom. At the time, Vodacom was Makate’s employer and his idea was developed into one of Vodacom’s most successful products, dubbed “Please Call Me”.

According to the judge, it is common cause that “Please Call Me” generates billions of rands of revenue for Vodacom.

“Makate and Vodacom have been embroiled in litigation over the ‘Please Call Me’ product that spans over two decades. Relevant to these review proceedings is the pronouncement made by the Constitutional Court on 26 April 2016, which concluded in respect of the ‘Please Call Me’ product, that Vodacom was bound by the agreement concluded by Makate and Philip Geissler, the former director of product development and management of Vodacom,” she says.

Geissler is not a party in these proceedings.

The Constitutional Court then ordered Vodacom to negotiate in good faith reasonable compensation to be paid to Makate for “Please Call Me”.

The judge notes that failing an agreement being concluded, that court further ordered, that the matter be submitted to the chief executive officer of Vodacom (the first respondent) to determine the amount.

The CEO was appointed in terms of the agreement between Makate and Vodacom.

Negotiations ensued between Vodacom and Makate; however, no agreement was reached. According to the Constitutional Court order, Joosub, was duly engaged to determine a reasonable amount of compensation to be paid to Makate.