The man suing Vodacom for R9.7 billion over an idea

Please Call Me idea-man Kenneth Nkosana Makate has said in papers before the Constitutional Court that he is seeking R9.7 billion in compensation from Vodacom.

His case has been before South Africa’s courts for sixteen years. Makate initially lost in the High Court and Supreme Court of Appeal before the Constitutional Court ordered in 2016 that he was promised — and is owed — some form of compensation.

After several more years of back-and-forth between the parties, Vodacom offered Makate R47 million in 2019. He rejected the offer, calling it “shocking and an insult”.

The case has now made its way back through the courts on the grounds that Vodacom CEO Shameel Joosub did not calculate the compensation correctly.

This time, Makate won on the High Court and Supreme Court, and Vodacom appealed to the Constitutional Court. The court has yet to determine whether it will hear the case.

Part of the reason the Constitutional Court found in favour of Makate was because the apex court took a dim view of former Vodacom CEO Alan Knott-Craig taking credit for coming up with Please Call Me in his book Second is Nothing.

Knott-Craig disputed this characterisation years before the court issued its ruling, saying he never claimed the idea as his.

“What the autobiography actually says was that the head of new products and development brought an idea to me,” Knott-Craig said.

“What I did not know at the time was that this idea had already been given to him — and that is what the court papers show.”

That idea was to send a missed call to someone’s phone even if you had no airtime. Makate had called it the “buzzing option” in a memo to his boss, Lazarus Muchenje.

Ultimately the idea of ringing someone’s phone when the caller was without airtime proved impractical. Instead, Vodacom’s product development team ended up using a USSD command to generate a free SMS message.

The court did not believe Knott-Craig’s version that he did not know about Makate’s contribution when his biography was being written, with the judges going so far as to say that he was a “poor, and in some respects plainly dishonest, witness.”

Makate’s story of how he came up with the idea has been published in the book We Were Always Here: Stories of Black Inventors Across the African Diaspora by Candice Bailey, Lerato Makate, Sizwe Malinga, Les Owen and Therese Owen.

An extract was published in the City Press in July.

In it, the authors write that Makate’s idea was fuelled by a love story. He and his wife-to-be, Rebecca, had been separated as they tried to make the most of their professional opportunities.

Nkosana and Rebecca first met in 1994. South Africa was heady with the promise of its new democracy, the World Wide Web was spreading around the globe, and Vodacom and MTN were rolling out their cellular networks around the country.

In 1995, their love would face its first test. Rebecca moved to the Eastern Cape to study medicine, while Vodacom accepted Nkosana into its trainee accounting programme. He would remain in Gauteng.

His first official day at Vodacom was 2 February 1995.

In a 2022 interview with the BBC, Makate recalled how his love had inspired his idea.

“Rebecca was a student at Fort Hare University and we were in a long-distance relationship. There’d be times where she’d want to call me but didn’t have airtime,” he said.

“I thought: ‘Wouldn’t it be great if there was a way to initiate a call even when you didn’t have airtime?’ That’s how the idea came about.”

On 21 November 2000, Makate sent a memo to his direct boss, Lazarus Muchenje, who advised that he relay his idea to the head of product development, Philip Geissler.

By December, the product was in development. It would eventually launch in February 2001, and Vodacom thanked Makate for his contribution in an internal newsletter.

The newsletter article also recorded that the service initially only worked between Vodacom customers, and that the company aimed to charge 15c per Call Me message from 1 January 2002.

Initially, Nkosana was overjoyed. Now Rebecca could buzz his phone even when she didn’t have airtime — a signal that she wanted to talk but that her student budget couldn’t afford it.

However, when he was told he was being greedy when he kept asking for compensation for the idea, he grew disillusioned with the company.

He left in 2003 and joined Nedbank as a finance manager.

Rebecca qualified as a paediatrician and, in 2005, the pair got married.

Nkosana left Nedbank in 2006 to become deputy director of business governance at the City of Joburg.

In 2007, he made a decision that would see him in court for going on 17 years.

Makate had secured a litigation financing deal with a company willing to bankroll his legal fight in exchange for 50% of any payout.

They served Vodacom with a letter of demand. In 2008, they instituted legal action in the High Court.

The most recent Supreme Court ruling ordered that Vodacom pay Makate 5–7.5% revenue share over 18 years, with interest.

In its Constitutional Court challenge, Vodacom said this works out to between R29 billion and R63 billion, or 15% to 32% of its market cap.

Makate disputed this in filings objecting to Vodacom’s majority shareholder, Vodafone, joining the proceedings as amicus curiae.

Makate said the amount of R9.7 billion, which he sought when the case was still with the Pretoria High Court in October 2020, remained valid.