01 February 2019


    Vodacom Statement at Please Call Me Press Conference

    We are holding this press conference to provide you with the facts as we see them and update you as to where we see this matter.

    Attendees: Byron Kennedy (Executive Head of Media Relations), Nkateko Nyoka (Chief Officer for Legal and Regulatory, Takalani Netshitenzhe (Chief Officer for Corporate Affairs) and Till Streichert (Group Chief Financial Officer)

    1. We are holding this press conference to provide you with the facts as we see them and update you as to where we see this matter.
    2. The dispute started back in 2001, when Mr Makate was a full-time employee of Vodacom. At the time he proposed an idea or concept to allow people without airtime to send a message requesting a call back
    3. A protracted legal dispute developed.  The matter went to the Johannesburg High Court, which held that there was no legally binding contract between Mr. Makate and Vodacom. Mr. Makate’s applications for leave to appeal this ruling were dismissed by both the High Court and the Supreme Court of Appeal.
    4. The Constitutional Court, on appeal, subsequently found that there was an agreement between Vodacom and Mr. Makate but noted that an outstanding contractual term - the price to be paid for Mr. Makate’s idea - still had to be negotiated.
    5. The Constitutional Court instructed Vodacom and Mr. Makate to enter into negotiations and, in good faith, to agree ‘reasonable compensation payable to him’.
    6. It also directed that in the event of a deadlock, The Vodacom Group CEO, Mr Shameel Joosub, would be called on to break the deadlock. Mr Joosub was excused from all discussions on the Makate matter at an exco and board level.
    7. It is a matter of public record that we have complied in full with the Order of the Constitutional Court. 
    8. We have stated repeatedly that we are ready and willing to pay Mr Makate a substantial amount of money, the exact amount of which we are unable to disclose as we are bound by confidentiality.
    9. Vodacom was informed that Mr Makate plans to take our substantial offer placed on the table under review.  Mr. Makate would be taking the CEO's determination on review to Court.
    10. Most importantly, we want to de-escalate tensions which if not managed by all the parties concerned could threaten jobs and livelihoods as well as investment into South Africa.
    11. We appreciate the importance of this issue and understand the public interest however claims that this is an issue of exploitation and racism of a former employee are not only simply not true, they are completely unfounded.
    12. As a responsible corporate citizen, Vodacom – which is a Level 3 BEE company with 67 % of top management, and 78 % of staff being black South Africans - will not pay spurious, exorbitant amounts that have no bearing on reality.  This would jeopardise the livelihoods and sustainability of the company. This is not in the interest of administrative justice.
    13. We are committed to paying a reasonable compensation in line with the Constitutional Court ruling.
    14. When Please Call Me was launched it did not generate any revenue for Vodacom as subscribers were not charged for the service. It was offered for free. The intended plan to charge for it after an initial period was abandoned, since there were many similar services in the market, which were offered for free.  It is not, nor ever has been a money-spinner.
    15. We are also aware that other parties claim to have invented this concept. The numerous patents lodged for similar services are representative of how highly contested this space has always been.
    16. We do however acknowledge that things could have been handled much better with Mr Makate when he was an employee of the company.
    17. We call for sane and cool heads to prevail in our current highly politicised environment as we resolve this matter.
    18. As the biggest mobile company in South Africa, we are focused on resolving this matter in the interest of all of our customers and stakeholders.

    In Summary:

    • Vodacom has offered Mr Makate substantial compensation that will withstand the scrutiny of the courts. We have acted ethically in resolving the matter.
    • Vodacom remains focused on our primary purpose of serving customers, improving services, driving down costs, creating more jobs and developing start-ups, all of which are in the national interest.
    • As a Level 3 empowered JSE-listed corporation, Vodacom remains committed to empowering employees and SMMEs.
    • Management is committed to supporting employees with innovative ideas and have measures in place for compensation and preserve such ideas from any exploitation.
    • Urgent settlement of this matter will outweigh the cost, ensuring sustainable long-term value for all our stakeholders.
    • Lastly, our track record of value creation and growing Vodacom has been supported by the highest standards of corporate governance, and in taking this reasonable compensation forward we have been, and will continue to be, careful to ensure the most rigorous governance and oversight.