Please Call Me – a billionaire !

I am sure entrepreneurs across Africa will be heartened, in these straightened times, by the story of Nkosana Makate. If you hadn’t heard of him over the last 20 years, you really should have.

For  Makate, who worked in corporate, is  surely is a born entrepreneur with courage, tenacity and staying power. This what he has needed to take on Africa’s moneybags second largest mobile operator in a legal wrangle that is far from over.

At the heart of it all, is an invention by Makate, more than 20 years ago, of Please Call Me when he was working at Vodacom in South Africa. It was a way you could call someone, even if you didn’t have any air time,to send an automatic message to call you back.

It was a huge money maker for Vodacom in the eye of the mobile phone boom in Africa. It is estimated that the mobile operator made $13.2 billion from Please Call Me in 18 years. On its first day of operation, in 2001, about 140,000 people – equivalent to the population of a fair sized African city –  used the service.

Makate, understandably, demanded reward from Vodacom for coming up with the idea only to be met with a claim that Alan Knott-Craig – the former CEO – had come up with the idea in a break from the boardroom. Makate left Vodacom in 2004 and has been fighting through the courts ever since.

The Constitutional Court – the highest court in the land – credited Makate with the invention and ruled against Vodacom.

Makate claims about $1.2 billion – that is, 5% of the estimated $13.2 billion in revenue from Please Call Me in its first 18 years –  but Vodacom offered a mere $3 million in compensation.

The court has ruled that the mobile giant should come up with a better offer for what it deems intellectual property belonging to Makate.

This is going to a tough one for the CEO of Vodacom. Even three million dollars will make a dent in the company’s revenue. Anywhere near a billion dollars is likely to smash a hole in revenue big enough to put your fist through .

I am sure all of you entrepreneurs out there can sympathize with Makate as David -with sling shot and a bag of stones – downing Goliath, the lumbering Vodacom giant.

The question is why didn’t Vodacom deal with this 20 years ago when they could have given Makate his fair share at probably a fraction of the cost?

Well, I think, sometimes big corporates suffer from lumbering decisions from groups of ill-informed people called management .  They also overestimate their power – over that of the rights of an individual – in the misguided idea that a big corporate can bully anyone out of what is due to them.

Other mobile networks in Africa should take note.  It appears the Makate case will not be the last of its kind.

Mobile operators should ensure they deal with these disputes in an ethical and equitable manner – otherwise they could get an unwelcome and potentially expensive Please Call Me message.