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Historic Ruling: Supreme Court Orders Vodacom to Pay Billions to 'Please Call Me' Inventor

Published March 14, 2024
2 months ago

In a landmark decision, the Supreme Court of Appeal has directed telecom giant Vodacom to pay Kenneth Nkosana Makate, the brains behind the renowned 'Please Call Me' service, an amount estimated to be between R29 billion and R63 billion. The decision marks the climax of an intense legal battle spanning nearly a decade over rightful compensation for the potentially company-defining idea.

Vodacom had previously attempted to satisfy a 2016 Constitutional Court order with an offer of R47 million, determined by CEO Shameel Joosub. This offer, however, was vehemently rejected by Makate, who condemned it as being demeaning. Makate's legal team presented models to the Supreme Court arguing that the telecommunications company owed him a more substantial cut, ranging from 5% to 15% of the revenue generated by the service from 2002 to 2020, plus interest.

The 'Please Call Me' service, which allows users to send free callback requests when they're out of airtime, was reportedly conceived by Makate and acknowledged internally at Vodacom. Yet, the company and Makate never settled on a precise compensation figure, leading to prolonged court proceedings.

Having won the favor of the High Court, which directed Vodacom to negotiate in good faith, Joosub's deadlock-breaking model was subjected to further scrutiny. Makate's rejection led back to the courts, wherein the Supreme Court upheld the lower court's decision, advocating for a revenue share between 5% and 7.5%. The difference in the compensation amounts as computed by Vodacom and Makate’s team now stands before the Constitutional Court, raising questions about the precise percentage owed to Makate.

To translate these figures into the broader economic landscape, even the low end of the estimated payment figures is equivalent to 15% of Vodacom's market cap; the higher end approaches a third of the company's entire value. When compared to the net worth of some of South Africa's richest individuals, these amounts suggest that the compensation could temporarily catapult Makate well past industry giants like Patrice Motsepe and Koos Bekker.

Despite the outcome, any amount eventually received by Makate would also compensate his backers, who are due at least half, and taxation considerations will further affect the final pocketed sum. The Supreme Court's decision presents a stark contrast in potential outcomes, with the minority judgment differing only on the acceptance of Joosub's models, albeit over an 18-year period instead of five.

The case sets an unprecedented perspective on the valuation of intellectual contributions and the enforcement of corporate promises in South Africa. If the order stands, Vodacom's compliance will profoundly alter the course of Makate's life while setting a remarkable precedent in the corporate world concerning idea compensation.

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