Vodacom’s R29-billion Please Call Me headache
Vodacom highlighted in its annual results that a Supreme Court of Appeal (SCA) majority judgment would entitle Please Call Me idea-man Kenneth Nkosana Makate to R29 billion.
The legal battle between Makate and the mobile operator started in 2008.
Makate claimed compensation for coming up with the idea that led to Vodacom developing a service called “Please Call Me” (PCM) while he was a trainee accountant at the mobile operator.
He sent a memo to a superior with the idea to “buzz” someone else’s phone without airtime in November 2000. Vodacom launched Please Call Me in March 2001 and thanked Makate for coming up with the idea in an internal newsletter.
In July 2014, the Gauteng High Court ruled that Makate had proven the existence of a contract. However, Vodacom was not bound by that contract.
Makate appealed the High Court ruling, but the High Court and Supreme Court of Appeal (the SCA) turned down Makate’s application for leave to appeal.
He then took the matter to the Constitutional Court, which found that Vodacom was bound by the agreement.
It ordered the parties to negotiate, in good faith, and agree to a reasonable compensation amount payable to Makate.
In the event of a deadlock, the matter was to be referred to Vodacom Group’s Chief Executive Officer for determination.
After negotiations failed, Vodacom CEO Shameel Joosub offered Makate R47 million. He rejected this offer.
Makate then brought an application in the High Court for judicial review against the CEO’s determination and award.
On 8 February 2022, the High Court set aside the CEO’s determination and ordered him to reassess the amount.
Vodacom appealed against the judgment and the order of the High Court to the SCA. On 6 February 2024, it dismissed Vodacom’s appeal.
The SCA ruled that Makate is entitled to be paid 5% to 7.5% of the total revenue of the PCM product from March 2001 to the date of the judgment, plus interest.
On 27 February 2024, Vodacom applied for leave to appeal the SCA judgment to the Constitutional Court. Makate is opposing Vodacom’s application.
Vodacom is challenging the SCA’s judgment and order on various grounds, including:
- The SCA ignored the evidence presented regarding the computation of the quantum of compensation payable to Mr Makate.
- The SCA issued legally unenforceable orders.
To put Vodacom’s contingent liability related to the Makate matter in context, the SCA majority judgment would entitle him to a minimum compensation amount of R29 billion.
These are orders of magnitude higher than Joosub’s offer of R47 million and the minority judgment of the SCA of R186 million.
“Consequently, the range of the possible compensation outcomes in this matter is very wide,” Vodacom said.
The amount ultimately payable to Makate remains uncertain and will depend on whether the Constitutional Court grants Vodacom leave to appeal.
“Vodacom is continuing to challenge the level of compensation payable to Makate, and a provision immaterial to the financial statements has been recorded,” Vodacom said.
Vodacom and Makate reopened negotiations for an out-of-court settlement earlier this year.
Both parties told MyBroadband that the negotiations were confidential and they could not disclose any details about them.








