Creator of “Please Call Me”, Kenneth Makate, achieves significant legal win against Vodacom

The Supreme Court of Appeal (SCA) in South Africa has denied an appeal from Vodacom and ruled favourably for Kenneth Nkosana Makate, the man behind the idea for “Please Call Me.” The Court determined Vodacom must compensate Makate with between 5% and 7.5% of the total voice revenue the “Please Call Me” feature earned over an 18-year period, in addition to interest.

Based on the language in the ruling, the 18-year period spans from March 2001 to January 9, 2019 — the day Vodacom first proposed a compensation of R47 million to Makate for his idea.

The dispute can be traced back to 2007 when Makate, a Vodacom finance manager at the time, first sent letters demanding payment, asserting that he was promised remuneration as the originator of the idea for “Please Call Me.” He initiated legal action in 2008.

Makate’s idea was to create a system allowing users to send a call back request without airtime. This concept ultimately became the “Please Call Me” feature, which was implemented in the Vodacom network in 2001.

While Makate didn’t play a role in the development or introduction of the product (and there’s compelling evidence indicating MTN was actually the original innovator of the “Call Me” concept), his manager had guaranteed him compensation.

The case eventually landed in the Constitutional Court, which ordered Vodacom and Makate’s teams to negotiate reasonable remuneration amicably, with Vodacom CEO Shameel Joosub tasked with breaking any deadlock.

Joosub proposed a figure of R47 million, which Makate promptly contested and took to the High Court. The High Court sided with Makate, propelling Vodacom to appeal to the Supreme Court.

The final ruling from the Supreme Court hinged on the interpretation of the Constitutional Court order and whether the High Court was correct in its decision, especially regarding its directive to the CEO.

A statement from the Supreme Court alongside the ruling summarized that the two parties had a dispute over the period for which compensation should be calculated. Vodacom suggested a five-year term, rather than its standard three-year contracts. However, Makate’s lawyers contended that assuming Vodacom would have cancelled an assumed contract with Makate after five years was implausible. They proposed compensation should be calculated over a 20-year span.

The SCA stated, “this Court found that the aforementioned must be considered in the context of the duration of the agreement between Makate and the applicant. It would have been an un-businesslike and an unreasonable decision by the CEO not to have extended the contract it made with Makate. Therefore, this Court determined that the valuation was flawed and inequitable.”

By adding thirteen years plus interest to Joosub’s initial proposal of R47 million, Makate is already set to receive a large sum of money. However, the Supreme Court has further ruled that Vodacom must use the models submitted by Makate’s team to calculate the amount owed.

According to these models, Makate’s legal team estimated that a 5% share of an approximated R205 billion in revenue over 18 years equals to R20 billion in compensation. This amount is double what Vodacom annually invests into its South African network as capital expenditure and accounts for over 10% of Vodacom’s entire market capitalization, which sat at R197 billion on Tuesday afternoon.

In response to a request for comment, Vodacom said, “We acknowledge the recent 66-page judgment handed down by the Supreme Court of Appeal regarding the Please Call Me matter. We are carefully studying its contents and will respond in due course.”