Vodacom headquarters in South Africa/ Vodacom
NAIROBI, Kenya Feb 14- The inventor of the ‘Please Call Me’ (PCM) mobile function is set to receive a huge lumpsum of cash following a court order by the Gauteng High Court in South Africa.
Telco giant Vodacom which owns a 35 percent stake in Safaricom Plc was ordered to pay the PCM inventor Nkosana Makate five percent of the total voice revenue generated by the product over the past 20 years.
A popular function in the mobile telco industry across Africa, the Please Call Me function allows Vodacom-linked network users in 32 countries including Kenya to use USSD to notify the message recipients to call them back, even when the user does not have credit to call.
Initially, Vodacom had offered to pay Makate about $3million but the inventor demanded $1.2 billion in compensation, arguing that the figure amounted to five percent revenue Vodacom made in revenue from the service since March 2001.
The court rejected the compensation offer of $3million made to Makate in 2019 by the giant telco, saying that the latter’s methods in determining the revenue generated by Please Call Me since its market launch in 2001 was flawed and riddled with errors.
The North Gauteng High Court in Pretoria also ordered that Makate is entitled to 27 percent of the revenue generated by the return of calls sent through the Please Call Me platform.
Judge Wendy Hughes termed Vodacom’s offer as far too conservative and ordered the CEO of Vodacom, Shameel Joosub, to finalise the determination within a month of this order.
Makate first sued Vodacom some 20 years ago after the firm neglected to compensate him for inventing Please Call Me while he was a trainee accountant at the company.
In 2016, Makate scored a Constitutional Court victory when it ruled that he was entitled to compensation and ordered Vodacom to start good-faith negotiations for compensation.
The negotiations however collapsed after both parties disagreed on how much revenue Please Call Me generated for Vodacom.
Joosub based the $3 million compensation to Makate on the total revenue that Please Call Me generated for the company over five years.
This is despite the service running for over 20 years and Vodacom continuing to profit from it.
“Vodacom CEO was disingenuous to project that PCM, as a third-party service provider, should only be allocated a duration of five years,” the judge said.
The judge said that by projection PCM as a brilliant concept would have had the longevity which it has today thus, 18 years proposed by Makate (over which time Vodacom has benefitted from PCM) is reasonable and probable.
She ordered that Makate be paid five percent of the total voice revenue generated from the PCM product – starting from March 2001 to March 2021 – and not only for five years, as earlier calculated by Vodacom.
In determining the fresh compensation to Makate, Vodacom must also include the total voice revenue that the company generated from prepaid and contract customers (both in bundle and out of bundle) and interconnection fees when they spent airtime to initiate a call after receiving a Please Call Me message.
In court papers, Joosub argued that five years was the standard period Vodacom used for agreements involving third-party service providers.
Makate however rejected Joosub’s argument, saying the Please Call Me service’s financial benefit to Vodacom is ongoing and the period to determine his cut of the revenue that the service generates for the company should be more than five years.
Makate presented evidence to the court showing that it was a norm for Vodacom to enter into revenue-sharing agreements with third-party service providers that go beyond five years.
Joosub conceded in court that he didn’t consider Vodacom’s long-running arrangements with other third-party service providers when using five years to determine the compensation due to Makate.
Makate and Vodacom have been involved in the protracted court battle over the payment for this concept since 2008.
The mobile operator said it would fight the latest judgment in the long-drawn-out case over the invention of Vodacom’s Please Call Me service.
“Vodacom confirms that it will appeal the high court judgment and order on the Please Call Me matter, delivered by Justice Wendy Hughes on February 7, 2022,” the firm said in a statement.
