‘Please call me’ man hits back at Vodacom

Negotiations between inventor Makate and the telco provider are now at deadlock. By Ray Mahlaka.

Nkosana Makate has dismissed Vodacom’s assertion that it faces difficulties in determining the revenue that the “please call me” idea has generated since its inception in 2001.

Makate, the inventor of “please call me”, argued in court papers filed at the constitutional court on Tuesday that Vodacom has substantial financial records required to determine how much it owes him for the idea.

A fresh battle is heading to the constitutional court, with Makate seeking clarity on last year’s groundbreaking order that compelled Vodacom to enter into good faith compensation negotiations with him.

Negotiations have now deadlocked as Makate accuses Vodacom of trying to renege on its obligation to pay him for “please call me”, which allows a cell phone user without airtime to send a free message requesting to be called back.

As part of compensation negotiations, which began in September last year, Makate requested Vodacom to give experts (appointed by him) access to its records to determine the revenue that the idea generated.

In January, Vodacom revealed in its court papers that “please call me” was never treated in its income statement as a revenue-generating product. It also argued that it was unclear which calls were induced by a “please call me” message and which were not, making it difficult to determine what does and doesn’t qualify as revenue generated by the idea.

However, Makate suggested that in order to determine the revenue, a “simple computer program” was required to identify calls made within a set period of a “please call me” message being sent to a particular number and then calculate the revenue generated for Vodacom by the calls.

“While Vodacom and I might need to negotiate the precise response time to be used (for example 10 minutes after the “please call me” message), this demonstrates quite clearly that the revenue records can be obtained,” he said.

Years after “please call me” was launched, its messages included advertising campaigns, the revenue amount from which Makate says “must be readily available”.

Supporting Makate’s responding court papers is an affidavit by Andrew Hendricks, who was employed by Vodacom in various financial roles between 2001 to 2014.

Hendricks said due to his knowledge and experience of financial agreements with Vodacom’s service providers, the telecommunications company has the ability to calculate the total revenue per product and then determine the revenue share component. “In addition, they know exactly how much advertising revenue is generated off the tagged-on advertisement to the ‘please call me’ messages.”

Hendricks said the average revenue generated per call, per day is one aspect that can be reasonably determined with the “please call me” records.

Makate wants 15% of the revenue generated by “please call me” since its inception, which he estimates to be in the millions. He invented “please call me” in 2000 while working as the company’s trainee accountant. What followed was a nearly 16-year-long dispute with Vodacom to be compensated for the idea.

Vodacom argued that it’s open to other methodologies to arrive at a reasonable compensation amount as opposed to Makate’s demand for a share of “please call me” revenue. It also argues that Makate’s interpretation of the constitutional court’s order is incorrect, as it doesn’t suggest that the company is obliged to pay him a share of revenue.

Makate says it’s necessary for the court to clarify its own order for successful compensation negotiations. He adds that other compensation methodologies proposed by Vodacom “will lead only to a waste of time, energy and money – all to my detriment”.

  • This article was originally published on Moneyweb and is used here with permission

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  • Greg Mahlknecht

    I certainly hope that Makate is wrong and this information isn’t available – It doesn’t sit well with me to think of a telco keeping a detailed record of all calls and SMSes for 15+ years. In fact, I’m pretty sure that POPI makes it illegal to retain this detailed, personal kind of information for this long.

  • Dave

    Agree with you Greg. The “idea” was aimed at people with no airtime, why would any court consider giving him a share of all revenue generated, including those that do have airtime? Also the advertising element wasn’t his idea at all. It’s a bit like Henry Ford trying to claim a share of revenue from Tesla’s battery-operated cars. I suspect if Makate wasn’t so greedy, this thing would have been sorted a long time ago. Unfortunately he has sold off most of his share to ambulance chasers.

  • Jip Jones

    Errr…. interconnect maybe? LOL. And if it’s another voda customer who calls back, then its a revenue generating event which would otherwise not have occurred…

  • Greg Mahlknecht

    How can we know it would not have occurred? The person might well have bought airtime to call the person. There are gigantic flaws in Makate’s logic. You’re falling in to the same trap of over-simplifying the problem. Before the days of cellphones when I was a student, we used to phone someone, let it ring once and the person would phone you back. Exactly the same concept. If we hadn’t been able to do that we’d have bit the bullet and just phoned.

  • Jip Jones

    I don’t dispute that there are several scenarios and outcomes based on each unique use case. However, what’s clear, is that the PCM service was instrumental in addressing a number of these cases and as a result, generated revenue for Voda. Remember, this was in place well before the asymmetry came into play too. To me, it provided a preferred distribution channel for customers out of airtime, or those not willing to spend the airtime themselves.

  • Greg Mahlknecht

    From a previous article:

    > Makate believes that since the inception of “please call me in 2000 it has generated R70bn for Vodacom and he wants a 15% cut of the revenue.

    He’s talking billions of rands, and there’s just too many factors to get even a rough idea of how much this can be. This isn’t a case of arguing over details, we’re literally talking the difference between R10B and (say) R10M rand. With the parties starting that far apart in negotations, and no way to calculate an accurate figure, it’s clear they’re never going to settle it amicably.

    >those not willing to spend the airtime themselves

    I think this is the biggest issue I have with it all. I believe it’s more a case of “prefer not to spend” rather than “unable” or “unwilling to spend”. That changes the calculations significantly. We’ve all received PCM’s over the years, and if we don’t phone back, that person phones a bit later when they can’t wait any longer.

    Makate was young and he messed up. Then he messed up again when he hired lawyers, and seems to have most of any potential winnings due to them anyway. He’s so out of line on the numbers and seems so utterly incompetent in any kind of business dealings, it’s hard to side with him, apart from feeling sorry for him in a sad kind of way.

  • Bob

    PoPI is pretty vague on how long such records must be kept; some other laws may be more explicit though. PoPI itself just states that records must only be kept for a “reasonable” amount of time and seeing as it isn’t effective yet, it won’t really apply to this.

    On your second point, it’s probably not clear-cut but you could also argue that any calls having arisen from Please Call Me’s may not have even happened and so that revenue would not have ever been made. I imagine a company such as Vodacom would keep track of whether the initiative is profit-generating otherwise they would have killed it a long time ago.

  • Greg Mahlknecht

    POPI states “records of personal information must not be kept any longer than is necessary for achieving the purpose for which the information was collected” – and 15+ years is clearly way beyond that.

    Yes, one can argue that PCM calls either made or lost money, and there’s no real way of knowing. I’ve dealt with these large telco’s a lot, they’re my main clients, and trust me – it would come as absolutely no surprise that they didn’t track the income from the initiative. I’m willing to wager the only check they did was that the paying ad they tagged on the end covered the raw SMS cost. I have no doubt as a whole PCM made money for Vodacom, but there’s a range from R10M to R10B we’re talking about here. That’s a MASSIVE grey area.

  • kat1time

    Nkosana Makate, all the best brother, after all, it is your idea, dear Vodacom, please compensate the man. It’s also interesting to see what other opportunities your idea has opened up. Your idea became great! It is a great part of history whether regarded or not. Do not stop, it is your idea.

  • Tuesday Is Soylent Green Day

    But…but…Alan Knott-Craig told us it was HIS idea. It’s right there in his autobiography. Surely you don’t think the CEO of a big company would lie.

  • Andrew Fraser

    The information should be available for at least 3 years. That would provide a guideline which could be applied to the other 12 years. But it isn’t in VC’s interests to make this easy.

  • Greg Mahlknecht

    I would imagine Makate would argue against this line of extrapolation, I would guess that PCM usage has plummeted in the last few years as IM has taken off.

    I’m curious where you got that 3 year figure from? I know for a fact there is no obligation to retain the SMS data for that long, as we’ve done some projects for people who had privacy concerns about SMS storage, and taken legal advice on the matter.

  • Greg Mahlknecht

    … and yet MTN filed a patent for Please Call Me before Makate (or Knott-Craig) claims to have invented it, and MTN beat Vodacom to market with the product. It wasn’t really his idea to start with.

  • Andrew Fraser

    The connection information is the basics of the billing, and since this creates a debt, I would expect the company to retain this information for the minimum of the prescription period in case there was some kind of query. NB: it isn’t necessary to store content, only routing metadata.

  • Jip Jones

    CDRs/EDRs have to be stored in a datawarehouse for 3 years.

  • Jip Jones

    Regarding the raw SMS cost – barring previous SMS interconnect costs (not sure what they were, when they were removed, or if they ever existed), the LRIC+ of providing SMS from the operators perspective is next to nothing…

  • Greg Mahlknecht

    SMS contents don’t, though. They’re a necessary piece of the puzzle to determine the costs.

  • Greg Mahlknecht

    That’s the problem – the content of the SMS is needed to work back and associate it with the calls. There’s absolutely no reason to keep the contents, all that’s needed is a count of how many PCM SMS’s that the advertiser’s advert appeared on, for billing purposes.

  • Jip Jones

    I’m no expert, far from it in fact, but I’m sure every CDR/EDR not only indicates the switching info, but also a product code/ID. Therefore, all PCM SMS’s could be easily identified via this ‘tag’?

  • Greg Mahlknecht

    They’d just go out as a bulk SMS – It is possible to set up a separate number, but knowing first hand the competence of the people at Vodacom, I highly doubt Vodacom did it themselves (they outsource most this kind of thing) – there’d be nothing special about a PCM SMS to distinguish it from any other spam SMS that went out. We handle some of Vodacom’s SMS campaigns and they go out the same routes as many other clients.

    Even if they did tag it to know PCM sent a message to you at X time, they’d need to know who initiated the SMS to associate it with calls from the recipients’ number.

    You over-estimate the abilities of these companies; apart from pretty bad staff churn, like any other big corporate, once you learn a bit about how they work, it’s a wonder that they manage to get anything done!

  • Greg Mahlknecht

    OK – and what about the other 12 years of data? Makate has claimed they owe him up to R10B … extrapolation from 20% of the data over the years of such a fast changing landscape doesn’t cut it. The argument isn’t if they owe him R500 or R700, it’s if they owe him R10M or R10B!

  • Andrew Fraser

    Well, all SMS messages would have to be in the billing system whether they were charged or not. The instigating USSD command falls within VCs VAS system, so I would expect that it is also archived. Thus the outgoing SMS, USSD message can be cross referenced automatically with outgoing calls from the target phone (within 5 minutes, say). No SMS contents required.

    It is fairly trivial in theory, but i guess a bit of a ballache to actually implement.

    As far as the advertising revenue is concerned, that is easier to confirm, as advertisers have to be billed.

  • William Stucke

    Oh dear. If that’s accurate, Greg, I’d say that it blows Makate – and all his lawyers – right out of the water. How could it have got all the way to the Constitutional Court if this was true?
    References, please?

  • William Stucke

    > if Makate wasn’t so greedy, this thing would have been sorted a long time ago
    Spot on.

  • Greg Mahlknecht

    Search Techcentral for “New twist in please call me saga” – there’s an article (from 2011!) with that title with full details, and some more information from the person who actually did invent the service.

    Court systems around the world are pretty rubbish on technical matters – The Apple “round corners” case is a classic example, and I am familiar with a local case where one map creator sued another for copying their maps, with irrefutable and unambiguous evidence that they copied their maps, and still lost the case because the defence lawyers managed to baffle the judge with BS.

  • William Stucke

    > Court systems around the world are pretty rubbish on technical matters
    Which I why I’m quite popular for providing an expert opinion on technical matters. I put it in words that even judges can understand 😉