More than two decades ago Nkosana Makate came up with a “brilliant idea” which was rated as “a world first - the concept behind the Please Call Me service in 2000 while he was working as a trainee accountant at Vodacom.
Makate’s idea was eventually developed by Vodacom. At the time, the cellphone giant was Makate’s employer, and his idea was developed into one of Vodacom’s most successful products. It has over the years generated billions of rands in revenue for Vodacom.
But this brilliant concept has been the subject of many legal battles - from the high court to the Supreme Court of Appeal. It even made it to the Constitutional Court and is now back in the appeal court.
Meanwhile, Makate is a very patient man. Vodacom reckons that his invention is worth around R47 million. But Makate is adamant that it is worth to the tune of about R9 billion, an amount he is willing to fight for.
While Makate and Vodacom have been embroiled in litigation over the product over the years, Vodacom lost in the courts. But it is not throwing in the towel and the company time and again returns to court if it is not happy with a ruling.
The Constitutional Court in April 2016 ordered Vodacom to negotiate in good faith reasonable compensation to be paid to Makate for the product. Should an agreement not be concluded, that court further ordered that the matter be submitted to the CEO of Vodacom to determine the amount owed to Makate.
Negotiations ensued between Vodacom and Makate, however, no agreement was reached. According to the Constitutional Court order, Vodacom CEO Shameel Joosub, was duly engaged to determine a reasonable amount of compensation to be paid to Makate.
In January 2019, the CEO made his determination that R47m was a fair amount. But Makate insists he’s owed 5% of the revenue generated off the back of his invention, which he estimates at around R9bn.
In what was a victory judgment for Makate the Gauteng High Court, Pretoria, in 2022 it was found he was shortchanged by Vodacom and that the cellphone giant must go back to the drawing board to come up with a suitable amount.
The court gave Joosub one month in which to recalculate what is owed to Makate, using the guidelines issued by the court.
Judge Wendy Hughes made it clear that the calculations used by Joosub earlier in offering Makate R47m, for what the judge called a brilliant invention, was by far too conservative.
While the judge said Vodacom was in a better position than the court to calculate the true worth of the invention, she gave certain guidelines of what must be taken into account when the amount due to him is recalculated.
Judge Hughes ordered that Makate is entitled to be paid 5% of the total voice revenue generated from the product - starting from March 2001 to March 2021 - and not only for five years, as earlier calculated by Joosub.
She ordered that the total voice revenue must include revenue derived from prepaid, contract (both in bundle and out of bundle) and interconnect fees as set out in Vodacom’s annual financial statements.
“The CEO was disingenuous to project that the product, as a third party service provider, should only be allocated a duration of five years,” the judge said. She pointed out that Joosub claimed that the R47m calculation to which he had arrived, was “generous” as well as his conclusion that the invention had generated money for Vodacom over five years.
“The facts demonstrate otherwise. In my view, it is therefore projectable that the product as a brilliant concept would have had the longevity which it has today. Thus, the 18 years proposed by Makate (over which time Vodacom has benefited from the product) is reasonable and probable.”
The judge added that in regard to the duration to which Vodacom had benefited from the concept, the CEO is to apply the 18-year period when he recalculated the amount due to Makate.
As part of his calculations, the CEO must assume that the average call duration of the return calls is two minutes and payment in this respect must not be less than the published Icasa effective rate.
In finding that Vodacom did shortchange Makate, she said he is entitled to 27% of the number of messages sent daily over the years as being revenue generated by the return calls to the product.
But this judgment was not the end of the matter, as instead of recalculating what is owed to Makate, Vodacom turned to the Supreme Court of Appeal.
Vodacom cited various reasons why it believed another court would come to a different finding than that of Judge Hughes. It maintained that the R47m offer was in fact “very generous”.
The company argued that the process which the CEO followed (to determine what Makate is owed) was fair. According to them, the CEO had gone so far as to grant the parties a hearing, which “he was not obliged, but had elected, to do.”
According to Vodacom Makate used a “conceptually and fundamentally flawed” model to arrive at his figures that it labels “grossly exaggerated”.
While this application before the Supreme Court was heard in May last year, judgment was reserved.
Makate said that he hoped the Supreme Court would deliver its judgment before the end of last year. It, however, did not happen and judgment is now expected sometime this year.
But Makate is patient, as he wants what he says is due to him.