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Please Call Me inventor wants more than R10bn

Nkosana Makate heads back to court to challenge the R47m settlement offered by Vodacom.
Makate says the settlement offer is based on revenue generated in a five-year period, while the service has generated revenue for 18 years and counting. Picture: Moneyweb

Nkosana Makate, the inventor of Please Call Me, has revealed publicly for the first time that Vodacom offered him a settlement of R47 million during his latest compensation talks with the telecommunications giant.

However, Makate is heading back to court to challenge the settlement offered by Vodacom Group CEO Shameel Joosub, which is adding another twist to the battle that has drawn out for more than 10 years.

Makate and Vodacom have been reluctant to disclose a settlement figure, citing confidentiality agreements entered into by both parties since the Constitutional Court ordered in 2016 that they enter into in good faith negotiations to determine reasonable compensation.  

Read: Constitutional Court orders Vodacom to compensate Nkosana Makate

In court papers launched at the high court in Pretoria on August 7, Makate said Vodacom’s Joosub offered him a settlement of R47 million during a January 9 meeting with lawyers from both parties. He described the figure as “inherently unfair”.

Joosub’s involvement in settlement talks is part of the Constitutional Court’s order that enabled him to arbitrate negotiations after a deadlock on compensation materialised.

Read: New twist in battle over Please Call Me revenue generation model

Makate has launched an application at the high court for an order that seeks, among other things, to review and set aside Joosub’s settlement offer and force Vodacom to disclose the revenue the company has generated from Please Call Me since it was launched in March 2001.

Please Call Me enables a user without airtime to send a text to be called back by another subscriber.

Makate also wants the court to order that he is entitled to be paid 5% of total revenue that Please Call Me has generated from March 2001 plus accrued interest.

On this score, Makate believes that Vodacom owes him a settlement of R10.2 billion, which excludes accrued interest and all the legal fees incurred since the Constitutional Court judgment. He wants Vodacom to pay him a settlement that takes into account his legal fees.

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

The R47m in perspective

Considering the R47 million settlement that Vodacom offered, Makate said it “sounds like a significant sum of money”. However, “it is in fact merely 0.023%” of the R205 billion call revenue Vodacom allegedly generated from 2001.

“There is no sense in which an amount of 0.023% can be said to be a reasonable share of the revenue concerned, which can be up to 85% as in other instances,” he said.

A Vodacom spokesperson said the company is aware that Makate launched court papers, but it is “not in a position to comment on the merits of the application”. It will oppose the court application.

Hard to determine revenue

Vodacom recently rejected Makate’s claims about the Please Call Me service generating revenue running into billions of rands. Vodacom chief financial officer Till Streichert said the service was free for a limited promotional period when it was launched.

He added that Vodacom resolved to shelve its plan to charge for the service when it enjoyed take-up in the market and its competitor MTN decided to launch a similar product. In other words, there was “no direct attributable revenue” as part of Please Call Me as it has never been charged for.

To factor in any incremental revenue generated by customers who had decided to initiate voice calls upon receiving a Please Call Me message would be “highly speculative”, said Streichert. “We have been seeing traffic [on calls] evolving over many years. Normal calling patterns have been incremental.”

Makate wants the high court to determine the revenue generated by Please Call Me since 2001 or appoint “a new referee” to determine the figure.

Jabs at Joosub

He has called into question the integrity of Joosub in being a deadlock breaker during settlement talks. During oral settlement talks that began on October 2018, Makate accused Joosub of acting “manifestly irregularly, unreasonably, irrationally, unfair, unjustly and inequitably”.

Makate said Joosub and Vodacom acted “in bad faith” as he incorrectly based the R47 million settlement on revenue generated by Please Call Me over five years even though the service “has generated revenue for 18 years and continues to do so”.

In a transcript of recorded settlement talks, which is contained in Makate’s court papers, Joosub allegedly said the “typical duration” for an “untested” innovation in the Vodacom stable would be three years, with five years the longest. Joosub said he was inclined to allow a five-year period, which he believes is “generous” and the “outer limit of what could realistically be contemplated”.

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I would also ask for more due to the weakening of the Rand over the last 18 years… milk them dry babba. They are Gupta owned.
In the end, his idea was to be able to let people message the other party for free / gratis. In return, they made big bucks from the rich calling the poor, which is the “direct attribute”.
Who still use this when you can have WhatsApp?

Didn’t know I am a Gupta (that’s the only part I have issue with, since it’s so incorrect that all the various people with shares are Guptas)

….”Guptas” thrown around by those with a bent attitude of “apathy” & “entitlement”

10bn? I’d give him a snowballs chance in hell.

HeHeheheee anpther series of the gripping tales of wonder – pass the popcorn !!!

This entire case is absurd and reeks of an entitlement mentality. If I, in the normal course of my workday, come up with an innovative idea related to my work, surely my employer, who pays me to do my work, owns that idea? I can’t now turn around and say I want to be the owner or patent holder of such an idea. The whinger must just get lost.

I worked in the ICT sector for 25 years and that’s exactly how it worked. Whatever.

Except that the employer agreed to compensate him for the idea at the time. They made a mistake, and now they should pay for it.

Couldn’t agree more. Makate should have been smacked down from the start – after being given something more appropriate for his “invention”. A free ticket to the next Pirates match, for instance.

This whole saga epitomises the level of self-entitlement of the presently advantaged population. Nowhere else on the planet would this be an issue – it wouldn’t even feature in the company magazine.

Let us not forget that one CEO of the company claimed he invented the “Please Call Me” wonder of the communication sector…. my kids, my unemployed family members, street vendors, police, the sick in hospitals use this facility to the fullest and in return generates billions for the cellphone companies…. they must pay him the R10 billion…. next year it will be twice that… They can have a rights issue of shares and settle this amount… for them its only a pittance.

If it was not for the employer “Vodacom” and the environment that it had created, would this person in their average life day come up with something like this and then sell this product to the market?

The answer is quite simply No.

Trick is, the lawyers have got hold of this and know that they have a pot of 47m to burn through in legal fees.

At this point most of that 47m is probably going to them – but there must still be some left because they’re mounting a final push.

As the “inventor” (call me was actually invented by MTN and patented by them in the early 2000’s) sees his pile dwindle to zero, the desperation levels rise.

yes, this case sounds similar to electric meter box fiasco in pretoria where the meter box was installed, but afterwards the installer thereof wanted to share / claim / earn a certain % or fixed monthly amount which was read by the installed meters, same with the toll road system where the larger part of its innings/ earnings is for a foreign company which developed the toll road system to which the government signed the contract. (surely it could have been done in-house)
Based on the above i must be able to claim from 2 municipalities just by advising / showing them how to import portions of already captured data into a new database to do quick calculations of rates, addresses etc iso doing it in a massive hand written book (eastern cape province)and save them days of calculations and checking work each year – they will laugh in my face. Money & Greediness stays the root of all evil.

The worst of creativity is that this guy had a brilliant idea, made it work, and Vodacom used it all the way. Pay the man with honesty, this why capitalism only work for about 40% of people. Bright ideas like Please Call Me are “hijacked” and not honestly rewarded. Pay him with shares or whatever way, but do not “steal” his idea, he acted in good faith.

An employer pays his employees to have bright ideas. He got paid his salary. Case closed.

Not if the employer agreed to compensate him, which happened in this case.

MTN’s “claims” are irrelevant to the standing of Makate’s agreement with his erstwhile employer, and this dispute.

What if he had a brilliant idea and it failed, costing Vodacom R10bil. Would he then open his wallet to chip in for the lost revenue? no. So why should an employee share in the revenue from an idea he was paid to generate.

If he wants to share in capital appreciation, buy the shares.

He stole the idea from MTN.

What has happened in this case is that the Constitutional Court held that Vodacom had agreed to compensate him and that that contract must be enforced, in its entirety. You can’t ask a court to enforce an agreement, but only to the extent it benefits you. Notwithstanding the fact that MTN had evidently come up with and registered this idea long before Vodacom or this aggrieved “inventor”, the complainant is a party to a contract under which the Vodacom CEO would resolve any dispute as to quantum. If he thought that was improper, he should have said as much at the time and insisted on an impartial arbitrator. R47m for an idea that a competitor company registered first is already beyond extortionate; R10 billion is patently ridiculous. Why not ask for one hundred thousand point ninety five zillion Rand and a half?!

Individuals who employ their own capital and run the risk of losing that capital while they develop their business ideas may be called entrepreneurs and they deserve the right to the profits if there are any. An individual who uses the capital of other people and takes no risk with his own money while he demands a right to profits is not an entrepreneur but rather a parasite.

Some parasites are hard to get rid of. For his idea, he deserves a bonus of some sort but his claim on the profits of the company is parasitic behaviour. He exhibits the typical BEE mentality of maximal exploitation and zero contribution.

I agree that behavior is parasitic, Vodacom paid his salary throughout and even though he allegedly created the “please call me” he was still employed by Vodacom. The point is that he did not have capital to take on risk should the idea collapse. If the risk was not absorbed by vodacom and then 10 billion rand later a loss of disaster occurred. I do not think in any given situation would Makate would have liquid of 10 Billion – not even 1 of sort. The fact that he demands a share of the profits is absurd. He is still lucky they’re willing to give him 47 million which his lawyers will demand once the case is closed. if Makate was sound of mind why did he not apply for a patent at the time. Many inventions to day are mostly owned by entrepreneurs so hence he lost out

I could not have said it any better. People who back Mr Makate clearly have no what it means to put your own capital on the line, the risks involved or how someone who works for a company will at best get a bonus and would definitely not share in the company’s profits.

If Mr Makate is so set on sharing in a company’s profits why didn’t he start his own telecommunications company with his own capital?

*clearly have no idea

Bet you his lawyer saw the R47m and told him to go for it, knowing he will lose but there is R47m to cover his fee, of a fat % if they do get an adjusted amount.

Personally I think he has done very well and should walk away and will no doubt blow it all….

By the time the case is concluded billions of Rand will not have much value.

His legal team are after the 10 billion. Nokosana will still be where he is right now.

Spot on. He has to pay greedy lawyers and rent-a-crowd protestors.

10bn is a significant chunk of Vodacom’s assets. I’d argue that such a big contract would require board or at least exco approval. Not some senior manager in the accounting department.

Pretty clear his legal bills have run beyond the 50m mark hence this latest attempt. Going to be tough to say that 50m is not enough though I suspect and 10bn is just a stupid figure really.

Can see this ending in tears.

And during ongoing legal team dealings between Makate and Vodacom, Makate’s team must’ve habitually sent “Please Call Me” requests to VC’s legal team to be contacted *lol*

Makate to VC: “Please Call Me”

VC answers: “Oh, it’s you Mr Makate. You want R10bn now?”

Moral of the story….don’t respond to Please Call Me’s! Most of the time, it’s trouble. Plus the audacity to expect someone else to pay for the return-call.

R47 m as a bonus for doing your job sounds very fair to me. Greedy little man, he’ll get burnt here, lawyers will win

This is a textbook example of UNETHICAL behaviour by business executives.

This company agreed to rewarding an employee for an idea.

Then the executive not merely reneged on their undertaking, they wilfully and dishonestly lied about the record and pulled EVERY trick in the book afterwards.

Concourt failed “justice” big time by not removing Joosub from the process, and replacing him with an IMPARTIAL adjudicator.

This is an INTRINSICALLY DISHONEST company. And this executive suite needs to be made an example of.

As an Inventor and Product Developer myself, I come across this dishonest, unethical, behaviour all the time from “businessmen”.

I hope Vodacom and its sly, devious, executives and lawyers get their ass well and truly kicked.

Couldn’t enjoy the schadenfreude more!

MTN, as the true inventor, hasn’t made such an outrageous claim against Vodacom.

MTN is irrelevant to the case between Makate and Vodacom.

2 Points:
– I don’t like Vodacom
– In this case they have offered to pay. And an outrageous amount at that, taken into account that this person carried zero risk and did not even develop the idea himself, merely ‘came up’ with it. Which could have involved all of 10 minutes of work from his side.

The issue is that he wants more.

The issue is he wants more? And rightly so!

He just wants what the company agreed to abide by in the agreement between the two of them in the first place.

That this is one helluva lot of money, and might only have taken him all of 5 minutes to come up with in the first place, and say another 30 minutes to convince his boss of the merits of the opportunity, is actually TOTALLY irrelevant.

The fact is that Vodacom indisputably entered into an agreement with him to reward him for this idea on specified terms.

It’s a really simple matter. Vodacom is on the hook for what they agreed to.

Greed, entitlement and ingratitude appear to know no bounds

The only winners here will definitely be the lawyers. They will pocket that R47 million.

Asking for R10 billion that’s ridiculous – Companies out there are giving their employees vouchers for coming up with brilliant ideas. Ask FNB/Wesbank employees

Question? Would it be possible to claim (class action) for a contribution/compensation for all the calls initiated as a direct result of the please call me?

What im interested in is the Whistleblower info that got to Mr Makate, all the articles I’ve read doesnt explore this avenue more. This case has long passed the stage of side issues like that MTN claim by Ari Khan, all those are done and dusted we on the last phase of how much. Dwelling on the issues that were dealt by courts is really a waste of time right now. Vodacom has conceded having made billions with this invention. 47mill cant be a fair compensation over the years there is more to this story than what meets the eye.

Please call me a billionaire!

This guy is so far down a rabit hole he can’t see the wood from the trees anymore. R47 million is a huge sum of money for an idea that is not even patentable in South African law. It’s just an idea and many other people had the same idea.

So many lawyers/investors are probably involved in sponsoring his case that even if he get awarded R100 million he would barely get anything out.

One has to seriously question the reasoning ability of the Constitutional Court . The Court held he is entitled to a bonus-contractually but was unable to quantify it . That in itself is an unusual situation. To avoid a real fight(and lose ANC votes) the Court kicked the ball into the hands of the CEO as final arbitrator. To me thats it-CEO says R1-then its R1-if he says R 1bn then thats it. The Court could only interfere if the CEO acted unreasonably-at R 47m that is a long shot for a product created by a competitor ie MTN -again something that the CC avoided addressing completely.

My real concern though is the lack of insight, judgement and in my view political influence of that Court.

This case is but a metaphor for modern day South Africa. Our broader Socialist society (a.k.a government and their supporters) doesn’t recognize the concept of risk and return. It’s all about entitlement and getting your nose into the feeding trough with as minimal effort possible. This man took ZERO risk, employed ZERO of his own capital yet feels entitled to be treated as an entrepreneur. The bonus is more than generous my friend, consider this: in most companies innovation is encouraged if not mandated and if the IP was developed on company time, using company resources, then the COMPANY owns it. If he felt so convicted about his idea, why didn’t he start his own venture, patent the idea, invest in systems, human capital and infrastructure, hire some fancy ad agency and marketing team and then try to market it to Vodacom for R10bn? THAT’S Capitalism.

One may ask how Mr. Makate arrived at a figure of R10 billion.

Easy. He looked at Vodacom’s offer, thought a little bit and said, “Not enough zeroes”.

I have a feeling David is going to have another victory against Goliath, albeit not R10B.

Imagine if Vodacom would have settled this when it started.

End of comments.





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