Please Call Me man hopeful for R9.4 billion in battle’s final round

Please Call Me idea-man Nkosana Makate will return to court on Thursday, 21 November 2024, for what he hopes will be the final round of his fight to get Vodacom to pay him R9.4 billion for the idea.

The Sunday Times reported that Makate said he was “upbeat” and looking forward to beginning a new chapter in his life.

Coincidentally, this coming Thursday marks 24 years since Makate wrote the memo to his boss outlining his idea for the “Buzzing option” — a way to send a missed call to another cellular user without airtime.

Makate believes he is owed compensation for his idea due to a verbal agreement between himself and his manager, and he launched legal action against the mobile operator in 2008.

Vodacom product development head at the time, Philip Geissler, had also promised to present Makate’s request for a “reward” to then-CEO Alan Knott-Craig.

Geissler had warned Makate that he may not receive compensation for his “buzz” idea but promised to speak to the CEO if Please Call Me was successful.

While he initially lost his cases at the High Court and Supreme Court of Appeal (SCA), the Constitutional Court ruled in Makate’s favour in 2016.

The Constitutional Court sidestepped questions about who invented Please Call Me and instead focussed on the contractual aspects, ruling that there was likely a verbal agreement between Makate and Vodacom on balance of probabilities.

Geissler never testified.

The Constitutional Court ordered Vodacom and Makate’s teams to negotiate reasonable compensation in good faith. It designated Vodacom Group CEO Shameel Joosub as the deadlock-breaker.

Initial negotiations ended in deadlock, resulting in Joosub offering Makate R47 million as compensation for his invention.

Makate rejected the offer, describing it as an insult, and challenged it at the High Court. The focus of the case was whether Joosub made a mistake in his calculations.

In 2022, the High Court ruled in Makate’s favour, ruling that he was entitled to at least 5% of Please Call Me revenue.

Vodacom appealed the decision at the SCA. The SCA dismissed Vodacom’s appeal and confirmed the High Court order, instructing Vodacom to pay Makate between 5% and 7.5% of the total voice revenue generated by its Please Call Me product over 18 years, plus interest.

It also instructed the mobile operator to calculate the revenue generated through Please Call Me using Makate’s models rather than Vodacom CEO Shameel Joosub’s. It didn’t specify which of the three models it should use.

The mobile operator described the SCA’s order as vague, unlawful, and unenforceable. According to its papers, it said the ruling would amount to a pay-out of R29 billion to R63 billion for Makate, between 12% and 30% of Vodacom’s entire market capitalisation.

However, Makate said Vodacom’s calculations were incorrect. He confirmed that he will accept compensation of R9.4 billion.

“The quantum, as Mr Makate stated on oath before this court in his answering affidavit, while still substantial, is an order of magnitude less — at R9.4 billion,” Makate’s responding papers stated.

However, the mobile is now hoping to appeal to the Constitution Court, but it must first present the merits of its case along with arguments for why it is a constitutional matter.

The image below shows Makate’s Model 9B as presented to the Supreme Court of Appeal.

His legal team’s calculations show that Vodacom would owe around R29 billion if mora interest were factored into the equation over 18 years.

Makate’s legal team tweaked some of the variables according to the SCA’s ruling in its Constitutional Court papers, reducing the amount from R9.7 billion to R9.4 billion.

In essence, he has committed to forgoing 18 years of interest and agreed to 5% revenue share calculated according to his model.