The “Please Call Me” function found on Vodacom-linked networks in 32 countries has been subject to a court battle for over 2 decades. Users of the service including those in Kenya use it notify the message recipients to call them back.
Mr. Nkosana Makate, the inventor of the feature took Vodacom to court as he believed the telecommunication giant short changed him. In 2022, a South African Court ordered the company to pay the inventor 5 per cent of the total voice revenue generated by the product over the past 20 years. However, Vodacom, which owns 35% stake of Safaricom PLC appealed the ruling.
Supreme Court Ruling
Yesterday, the South African Supreme Court of Appeal (SCA) dismissed the appeal by Vodacom. The court ruled in favour of Kenneth Nkosana Makate. Judge of the Appeal Court, B C Mocumie wrote ” the applicant is entitled to be paid 5% to 7.5% of the total revenue of the PCM product from March 2001 to date of judgment by the Second Respondent, together with the mora interest thereon“.
Basically, Mr. Makate is entitled to between 5% and 7.5% of the total voice revenue its Please Call Me product generated over 18 years, plus interest. Further, the court was not impressed by Vodacom’s behaviour in the it’s long court battle with Mr. Makate. The court found that the company had employed underhand tactics from the very beginning even before Mr. makate first took the matter to court in 2008. He had begun the process in 2007 by issuing a demand letter.
Due to the delay tactics, the court has ordered the company to bear the costs incurred during the appeal process. This includes the cost to hire both the counsels who were employed in the process. Further, the company will pay the costs for drafting of submissions, hiring experts and negotiation costs.
Please Call Me History
Mr.Makate was not involved in the development or launch of the product. As a Vodacom finance manager at the time, he had been promised a settlement for the idea. When they could not agree on a pay, the case was taken to a Constitutional Court. The court ordered Vodacom and Makate’s teams to negotiate reasonable compensation in good faith.Vodacom CEO Shameel Joosub arrived at a compensation figure of $2.5 million.
This was rejected by the South African inventor who took the matter to the high court. Mr. Makate won at the High Court and this is how the matter reached the supreme court following an appeal. While Vodacom’s lawyers argued that the company would have normally ended the contract within 5 years, Makate’s lawyers argued that Please Call Me was a huge success. Therefore, they found no merit in the argument that Vodacom would’ve cancelled the hypothetical supplier contract after five years. This is why they pushed for compensation to be calculated over 20 years and the court agreed.
“This Court emphasised that it would have been an eminently un-businesslike and an unreasonable decision by the CEO not to have extended the contract it made with Makate. As such, this Court determined that the valuation was flawed and inequitable.”
Using a payment model settled on by the court, 5% of Please Call Me revenue over 2 decades could see the inventor receive approximately $ 1,061,763,400.00 compensation. This is more that what Vodacom invests in it’s Network infrastructure in South Africa.
The Telco promised to fight the Supreme Court’s ruling in favour of Makate.“Vodacom is surprised and disappointed with the judgment and will bring an application for leave to appeal before the Constitutional Court of South Africa,” the mobile operator said.