Nkosana Kenneth Makate has informed the Constitutional Court that he is willing to accept a compensation of R9.4 billion from Vodacom for his “buzzing option” concept, foregoing the 18 years of interest previously granted by the Supreme Court of Appeal (SCA).
This position is reflected in Makate’s response to Vodacom’s appeal to the Constitutional Court, where Vodacom has requested the apex court to overturn the High Court and SCA decisions that favored Makate. Alternatively, Vodacom has suggested that if the rulings are not overturned, the case should be referred back to the SCA with a new panel of judges.
The dispute is back before the Constitutional Court because Vodacom and Makate could not reach an agreement on what constitutes reasonable compensation for Makate’s idea, which evolved into the “Please Call Me” service in 2001. Vodacom contends that Makate’s original concept—allowing someone to send a missed call to “buzz” another phone without airtime—differed from what “Please Call Me” eventually became.
Vodacom also argued that Makate’s idea lost its value when MTN launched its similar “Call Me” service in January 2001, offering it for free when Vodacom intended to charge for each message. However, Makate countered that this argument is irrelevant, pointing out that Vodacom continues to offer “Please Call Me” today, demonstrating its ongoing value.
In 2016, after years of legal battles, the Constitutional Court ruled in Makate’s favor, ordering Vodacom to negotiate reasonable compensation in good faith. The court focused on the contractual aspects of the case, concluding that a verbal agreement regarding compensation likely existed between Makate and Vodacom. It appointed Vodacom CEO Shameel Joosub as the deadlock breaker to determine the final compensation.
Makate initially sought R20 billion, while Vodacom countered with R10 million. After a legal struggle over access to Vodacom’s records, Joosub offered R47 million based on four different models. Makate rejected this offer, describing it as “shocking” and “an insult.”
The High Court later ruled in Makate’s favor, and Vodacom’s appeal to the SCA was unsuccessful. The SCA ordered Vodacom to pay Makate between 5% and 7.5% of the total voice revenue generated by “Please Call Me” over 18 years, with interest. Vodacom was instructed to use Makate’s models to calculate this revenue, though the SCA did not specify which model to use.
Vodacom has now asked the Constitutional Court to reconsider, claiming that the SCA’s ruling was vague, unenforceable, and unlawful. According to Vodacom, the SCA’s order would result in compensation between R29 billion and R63 billion, an amount they argue is disproportionate for the idea. Makate, however, disputes this figure, asserting that the correct amount is R9.4 billion.
Makate’s papers emphasize that Vodacom, with a market capitalization of over R200 billion and backed by Vodafone, is fully capable of making the payment without financial hardship. Makate’s legal team also noted that Vodafone has previously settled disputes of similar or larger sums.
Although Makate mentioned a R9.4 billion payment, there remains some ambiguity over whether mora interest, which has been accumulating since January 2019, will be added. Including this interest could increase the final amount by several billion rand.
Vodacom has also raised concerns about Makate’s calculations, arguing that it was unrealistic to claim that “Please Call Me” generated around 80% of Vodacom’s voice revenue between 2002 and 2017. Vodacom asserts that its actual applicable voice revenue over this period was R221.2 billion and disputes the accuracy of Makate’s revenue share claim.
Makate’s legal team has questioned Vodacom’s financial reporting, which no longer provides a breakdown of mobile voice revenues, suggesting that important revenue streams may have been excluded from Vodacom’s calculations. Nonetheless, Vodacom maintains that it has provided accurate revenue figures based on detailed internal accounts.
