Vodacom and former employee considering settling “Please Call Me” dispute out of court

March 11, 2024
2 min read
  • Vodacom is reportedly in talks with former employee Kenneth Makate to reach an out-of-court settlement in the "Please Call Me" phone service saga.
  • According to Makate, Vodacom has requested private talks, and he is willing to comply and engage. 

This move comes after South Africa's Supreme Court of Appeal ruled that Vodacom Group Limited must pay Makate between 5% and 7.5% of its total revenue share from the Please Call Me (PCM) service over the last 18 years (March 2001 to March 2021), plus interest.

Consequently, Makate would receive compensation ranging from R29 billion ($1.5 billion) to R55 billion ($2.8 billion). Additionally, he will get 27% of the voice revenue from PCM messages.

When he worked for Vodacom in the finance department, he proposed the phone service "Please Call Me" to the company's product development team over two decades ago. 

The PCM dispute, which began in 2008 after Vodacom allegedly broke its promise, has been going back and forth. The telco claims that it has tried negotiating in the past but failed.

Despite opposing the recent ruling and petitioning South Africa's Constitutional Court for leave to appeal the Supreme Court verdict, Vodacom now wishes to resolve the dispute outside of court. Makate is expected to submit opposing papers to the Constitutional Court this week.

However, a report revealed that the company expressed willingness for a good faith dialogue and negotiations for reasonable compensation, without prejudice to its Constitutional Court appeal process."

The telco stated that if the February judgement is followed, it will significantly impact its operations—from employees and shareholders to the country's public finances. In addition, it will affect network investment, coverage, and social programmes. 

In 2016, following a court order, Vodacom Chief Executive Officer Shameel Joosub calculated Makate’s compensation at 47 million rand at the time. Moreover, the recent February order by the Supreme Court of Appeal nullified the CEO’s R47 million ($2,486,589.61) offer. 

Meanwhile, a payout of that amount in the February court order would affect Yebo Yethu, Vodacom’s black economic empowerment structure with about 80,000 black shareholders, where the equity value of Vodacom Group shares declines below the debt in Yebo Yethu. 

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Therefore, if the decision is upheld, Vodacom declared that the shareholders' investment in the fund "would be wiped out, and it would essentially be dissolved."

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