Vodacom has been ordered to pay Please Call Me idea-man R29 billion — minimum

South Africa’s Supreme Court of Appeal has ordered Vodacom to pay Kenneth Nkosana Makate a minimum of R29 billion for his Please Call Me idea.

Court documents, which MyBroadband has seen, show that the Supreme Court has essentially ordered Vodacom to pay Makate between R28.99 billion and R55.37 billion.

This is much higher than previous assumptions that were based on Makate’s earlier statements and High Court filings.

The exact wording of the Supreme Court ruling was as follows:

“The applicant is entitled to be paid 5%–7.5% of the total revenue of the [Please Call Me] product from March 2001 to date of judgment by the Second Respondent, together with the Mora Interest thereon, alternatively interest in terms of Section 2A(5) of the Prescribed Rate of Interest Act,” the order stated.

It continued: “…the total revenue of the PCM product shall be that set out in Model 9A, 9B & 9BB submitted to the First Respondent by the Applicant (Annexure ‘NM30’–‘NM32’ to the Supplementary Founding Affidavit)”.

MyBroadband obtained these annexures and summarised the compensation Makate’s models arrived at.

Models 9B and 9BB were pretty straightforward as the final compensation based on 5%, 7.5%, and 15% revenue share were tabulated according to Mora Interest, compound interest, and Special Interest.

These models make certain assumptions about the number of Please Call Me messages sent over 18 years, their success rate, the average call duration, and the average call revenue.

The models then arrive at a total call revenue generated by Please Call Me of R194.8 billion over 18 years.

Model 9A was trickier to analyse as it assumed 15% revenue share and didn’t break down the final compensation by Mora Interest and Special Interest.

However, it provided a sub-total of estimated call revenue generated by Call Me messages that was close to Model 9B/9BB — R196.84 billion.

It then adds Please Call Me advertising revenue, “Recharge Me” revenue, and an additional estimate of how much it generated outside South Africa.

Under Model 9A, the total Please Call Me revenue comes to R273.39 billion. 5% of this came close to the 7.5% revenue share amounts in Model 9B/9BB, allowing us to expand our analysis using amounts already accepted by the Court.

The table below summarises how much the Supreme Court effectively ordered Vodacom to pay in its ruling handed down on 6 February 2024.

Vodacom has said it will challenge the Supreme Court’s ruling in the Constitutional Court.