This column first appeared in Financial Mail in 2015.
It has all the makings of a grand story of a rags-to-riches story: a resourceful man who had a great idea that took off. It gets better, that inventor didn’t get a cent from his invention but now, in a David-vs-Goliath confrontation, he will wrest glory (and royalties) back through a lengthy and protracted court battle.
But, is that inventor former Vodacom accountant Nkosana Makate or former MTN lead data consultant Ari Kahn?
Last month, Makate, a trainee accountant at Vodacom in 2000 when he says he came up with the idea, won the right to appeal at the Constitutional Court.
It’s the latest round in a long-running saga over who came up with this frankly brilliant idea. In 2000 Makate says his girlfriend never had any money, so he came up with the idea of sending the Please Call Me message. He claims he spoke to Philip Geissler, then the head of product development, and the idea grew from there. Vodacom has responded that Makate, as an employee ceded copyright to the company, that Geissler was not empowered to make any such deals on behalf of the company and that the claim period in which Makate should’ve responded has expired – called prescription.
Why Makate’s claim is even before a court of any kind is because his legal fight is being backed by Sterling Rand, which the Mail & Guardian describes as “one of the few private entities in South Africa built on investing in legal disputes”.
“Makate will be sharing 50% of the R700m he hopes to win with Sterling Rand,” the paper adds.
Meanwhile, Kahn, a well-known figure in the early days of the cellular networking boom, says he came up with the idea in 2000. Kahn, who was lead data consultant at MTN from 1994 to 2002, said he thinks the idea was leaked from when he briefed MTN’s legal representatives (on 16 November 2000) and the patent application being filed with the Patent Office by Spoor & Fisher on 22 January 2001.
A day later Khan claims – with paperwork to back it up – that MTN launched Please Call me and more than 1.5m messages were sent in the first three days.
Meanwhile, former Vodacom Group CEO Alan Knott-Craig had to endure the ignominy of being called to testify in court that he was wrong when he claimed in a biography that he came up with the idea himself.
As a service, what was originally just a free SMS quickly became a call to action that often resulted in the receiving party returning the call. No wonder the networks love this free text service because it so often results in a call – transferring the call from the person with no airtime, who gets the person with airtime to make the call.
It’s calculated that the Please Call Me industry is estimated to be worth approximately R60m a year for Vodacom, which sends out an estimated 38-million messages a day, or nearly 14bn a year.
Makate claims Vodacomhas made about R70bn from it since launching it in 2001. He is asking for 15% of profit share.
Meanwhile, it’s been suggested that this Please Call Me service is the biggest advertising network in South Africa – and it’s probably true. Bear two things in mind: firstly, what we consider as an advertising platform is evolving, as quickly as we’re shifting from desktops to mobile as our primary devices.
Secondly, SMS is unique for two specific reasons: it reaches every kind of handset, no matter how basic; and it has a 100% read rate. People read everything, even the spam. The parents of teenagers should be aware of this: your kids are not responding not because they didn’t get the message, but because they don’t want to.
The Please Call Me patent saga is a convoluted one, but it reveals once again that special kind of ingenuity that us South Africans have. We’ve even found a way for someone with no airtime to get someone with airtime to make the call.
This column first appeared in Financial Mail in June 2015