How much did Vodacom offer Makate? We’ll likely never know

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The fight to get Vodacom to settle a matter 18 years in the making reached fever-pitch this week when the Please Call Me Movement assembled at Vodacom’s offices at Vodaworld in Midrand.

The movement is demanding that Vodacom pay the so-called inventor of the Please Call Me, Kenneth Nkosana Makate, R70 billion in compensation for coming up with the Please Call Me idea.

The thing is, we don’t know where that figure comes from and neither does Vodacom.

Speaking to ENCA yesterday Please Call Me Movement leader Modise Setoaba said, “Makate is only asking for 15 percent of whatever revenue they got.” To add a slice of context Setoaba was talking here about revenue generated from the invention of the Please Call Me. You can watch the interview with him below.

So then, how much revenue did Vodacom receive from the Please Call Me service? It says none.

Vodacom’s chief financial officer Till Streichert explained that, while the Please Call Me was initially planned as a paid service, that plan was never implemented.

“It could not have been charged at that time because the market had moved on and MTN had launched a similar proposition for free. So like with many free services it [Please Call Mes] enjoyed a considerable takeout,” Streichert says.

The CFO continues to explain that Please Call Mes went on to almost “replace” text messages and as such a limit was placed on the amount of these messages that could be sent per day.

“If it had been a substantially profitable service or – call it a substantial money maker – one would have not considered to put a cap on it,” Streichert says.

This, Streichert says should be taken into account when interpreting fair compensation.

However, it should be noted that Please Call Me messages contain advertising. Although most of the time these messages are for internal services from Vodacom itself we have seen instances of ads for non-Vodacom products. Whether this advertising draws in billions in revenue is a matter of speculation but, it is worth pointing out for the sake of clarity.

As for calls made following the delivery of a Please Call Me, Vodacom can’t present a solid figure. It did however say that revenue from calls is used to offset costs created by the solution because the Please Call Me message had to be paid for at some point.

All we know about the amount of money being offered to Makate is that is “substantial” according to a statement by Vodacom. The firm cannot disclose the amount that it has offered because it is bound by a confidentiality agreement that was handed down along with the Constitutional Court judgement.

However Vodacom’s chief of legal and regulatory affairs, Nkateko Nyoka, explained that rumours which surfaced in 2018 that the amount offered is higher than R10 million might hold water.

“The determination of the Vodacom group CEO in terms of quantum is significantly higher than the R10 million concerned,” Nyoka said during a press briefing.

The fact of the matter is that we have no idea how much Makate has been offered because neither he nor Vodacom is able to disclose the amount due to a confidentiality agreement.

And that’s where we hit sit now, with outraged citizens demanding Makate be compensated but Makate refusing to accept Vodacom’s offer.

Yesterday it was reported by Nyoka that Makate is taking the Vodacom group CEO’s offer on judicial review via BusinessTech and perhaps that process will provide clarity on the figure Makate has been offered.

For now though one thing is certain, Makate won’t be getting a cheque for R70 billion lest Vodacom decides to close up shop and pay him that amount.

Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.