The recent “Call Me” judgement against Vodacom has highlighted the issue of Vodacom acquiring technology through unethical means.
This is not a “one-off” occurrence, It is a practice that has been repeated by Vodacom on numerous occasions specifically when dealing with smaller technology companies. This strategy is in direct contradiction to Vodacom's published business principles and allows Vodacom to acquire technology without paying for it.

The Vodacom basic strategy:
• Vodacom is approached or invites a smaller technology company to present their product to Vodacom
• Vodacom shows interest and offers attractive verbal agreements.
• Vodacom then extracts Product details and samples under the guise of pre-implementation testing/ information for heads of agreement/ or any other means.
• Vodacom then sever the relationship with the originator of the technology once they have the required information.
• Vodacom then create/re-create the product and use it without having the originator involved.

A number of items make resolution of this practice very difficult :

• When escalating the issue internally within Vodacom, the issue is simply ignored by the senior executive.
• When sufficient pressure is applied, the matter is moved directly to the legal department. The legal departments view is quite clear “ You don’t have a case, we will destroy you in court”
• The next logical step is to consider the legal option. Firstly, there is the matter of High Court costs. To proceed with a legal action against Vodacom you need approximately R1 000 000.00 (one million Rand) to get the process started, and will require a further R 1 000 000.00 (one million rand), to see this process to completion. A total of 2 million rand.
• This 2 million rand does not ensure fair resolution, but only gets you into court, where you will need to face of the best corporate lawyers in the country, who are not bound by Vodacom's “Business Code” but are paid to win at all costs.

The bottom line, if you are a small company and your product is stolen by Vodacom, the following applies:
• Vodacom will not adhere to their, or reasonable business principles
• You will not get internal resolution, you will need to go to court.
• You will need two million Rand which you can afford to lose.
• You should expect to be subjected to every delaying, technical, and expense creating legal manoeuvre available

Considering the above, the practice of stealing technology from a small company carries almost no risk to Vodacom.

A small but important addition, the newspapers are reluctant to write about Vodacom until receive a press release from Vodacom, or once the matter is actually in the High Court due to the risk associated with losing advertising revenue from their biggest client.
This is a brutal and unethical business practice, and whilst acknowledging a companies primary objective to generate profit, the action of misrepresentation (lying) and misappropriation (stealing) is unacceptable under all circumstances.
Vodacom's published business principles, state quite clearly and unambiguously, that Vodacom will uphold the highest standards of Integrity (honesty) Accountability and Responsibility, in all of Vodacom's business dealings” Lol.
Below is a summery of the cases, which did make it to court, in which the Vodacom strategy is displayed clearly.



Vodacom partners with a small company (Gridwatch) which has developed a product. Vodacom extracts the technical specifications from Gridwatch, Vodacom CEO, Allen Knott-Craig gets his son to develop/bring in a similar product, and they drop Gridwatch. The result, Gridwatch lose their investment . Allan Knot-Craig admits to the partner in Gridwatch that he reckons he can get away with it.

An entrepreneur who claims to have invented Vodacom's money-spinner, Look4Me, says that former CEO Alan Knott-Craig Snr. stole his invention – and passed it on to his son, Alan jnr.
Stephen Rodgers, who patented the country's first cellphone tracking service in 2002, claims that, when confronted, Knott-Craig Snr. was unrepentant. Rodgers said Knott-Craig Snr. said he had "investigated (the patent) for loopholes and was quite happy to go to court and fight us. He also told my MD that we should go ahead and sue them."
The distraught entrepreneur and investors in his company, Gridwatch, had already ploughed R12-million into the business, which soon collapsed. Gridwatch's tracking system – known as Multi-Alert – was used by Vodacom in 2003, signing up over 3000 subscribers within months.
"We were well on our way until Vodacom first approached us (in 2003) for an exclusive partnership with them, made us spend millions and then stole our invention, " said Rodgers.
Within months, however, a similar product, known as Look4Me and developed by Cellfind (Knott-Craig jnr.), arrived on the shelves of Vodashops.
Rodgers said it was "suspicious".
"Where did Knott-Craig jnr. get the idea from? It was already in his father's stores when they stole the concept and replaced it with Look4Me."
Describing the events that occurred after his managing director had met with Knott-Craig Snr., Rodgers said: "I ended up bankrupt … with nothing. I was finished. The investors pulled out because everyone was too afraid to waste millions more in a fight with this corporate giant."
One of Gridwatch's investors, Greg Blank, a former investment guru said: "Did Vodacom steal our idea? Absolutely they did. Steve's concept was totally the foundation of Look4Me, and a few months later that's exactly what was launched through Vodacom."
Blank, now a consultant and racehorse owner, says he decided not to fight Vodacom because "you're not going to win in a court case against a company that makes R7-billion in profit".
Though Rodgers says his projections showed he could have made R488-million from the project with Vodacom, he says he could not afford a costly legal battle.
"How does an ordinary man in the street take on a giant like Vodacom? How does the little guy just take on a guy like Knott-Craig when he says 'Sue me.' He has tens of millions to fight us."
Rodgers was asked by Vodacom's attorneys to hand over his product's technical specifications.
"We were in the process of drawing up the heads of agreement with Vodacom, and it was around that time when we were asked by their lawyers in a meeting to hand over the patent documents and the technical specifications. We agreed in good faith, as we were already trading in Vodacom stores. We didn't suspect anything."
In an e-mail to Rodgers dated June 30 2003, Vodacom's then executive head of sales, Michael Allschwang, said: "I am very positive about the product's possibilities. Once the logistics have been finalised, I will provide you with a draft copy of heads of agreement outlining our business relationship, which I have incidentally already begun working on."
Rodgers claims Vodacom then went quiet, and a few months later Multi-Alert was simply removed from the shelves of all Vodashops and replaced with Look4Me.
Look4Me, a service with overwhelming similarities to Multi-Alert, was launched by Cellfind in February 2004.
"When we first launched Multi-Alert, Cellfind was not even in existence, " said Rodgers.
Cellfind opened for business in September 2003, a year after Rodgers patented his product.

Partnering with a smaller company.
Extracting the product details.
Cutting ties with the smaller company.
Producing the product themselves.



Johannesburg – Dieter Sauerbier, according to friends, was an "intelligent" man with a "gentle soul" whose physical fitness was undoubted, considering he reached the summit of the treacherous Mount Kilimanjaro and South America's infamous Acancagua.
He was a "good friend" and a father of three children he worked very hard to raise. To those who knew him well, Sauerbier was also "unbelievably generous", compassionate and a kind character.
However, those who allegedly drove him to his death are said to be a powerful company whose revenue-generating ability and massive corporate social responsibilities have made it fearless of authority, ruthless in its methods of acquiring profit and completely greedy without remorse.
Fearless of authority because the tiff that this company had with Sauerbier and his partner, Kevin Jenkins, allegedly bordered on fraud. But the company was not concerned about this at all.
This company has made huge profits for its shareholders and its executives enjoy massive pay packets, allegedly by stealing ideas of ordinary hard-working people like Sauerbier and Jenkins, trying to make a decent and legal living.

In October 2003 Kevin Jenkins, managing director of Number Secure, a mobile application developer, and Barry Blackburn, director of sales at Vodacom Service Provider, signed a partnership to provide a new storage application to back up user contact information.
The 24-month agreement stipulated that users would be charged a R5.70 subscription fee along with R2 for pushing data to a storage centre to be backed up in case a user lost a phone. Out of the R5.70, Vodacom would receive R3.80 with Number Secure pocketing the remaining R1.90.
The companies would split the SMS charge with the product scheduled for launch in November 2003, according to a Pretoria High Court application filed by Number Secure in March 2006. The agreement was delayed more than eight times by Vodacom, with a final date set for August 2005.
In his court application, Jenkins estimated loss of income at more than R100-million.
The matter was taken to court with the initial court date was set for November 2007, then postponed until April 2008 and finally cancelled.
Vodacom agreed to an arbitration process overseen by a retired Appeals Court judge that began in September last year.
In a Noseweek article entitled “Vodacom Killed Me” Jenkins’ business partner Dieter Sauerbier, was reported to have killed himself.
He was found with a note that read: “Barry Blackburn and Vodacom killed me, in the end I merely pulled the trigger.”
Vodacom denies the allegations of neglect.

Partnering with a smaller company.
Extracting the product details.
Cutting ties with the smaller company.
Producing the product themselves.

AirTime Advance

http://www.itweb.co.za/index.php? option=com_content&view=article&id=150616:Vodacom-seeks-Airtime-Advance-lawsuit-dismissal&catid=260

A small company, Ndabenhle Business Enterprises, presents a product idea to Vodacom, Vodacom initially rejects the idea, and then brings out the same product a little later without the initial company being involved.
The company takes them to court, Vodacom attempts to get it dismissed on a technicality.

South Africa's number one mobile operator, Vodacom, has dismissed allegations it infringed the intellectual property (IP) of Ndabenhle Business Enterprises over its "Airtime Advance" product.
In a fresh lawsuit set to be heard at the South Gauteng High Court in Johannesburg next month, Ndabenhle Business Enterprises, owned by businessman John Khaba, is demanding compensation from Vodacom, accusing it of misappropriating his idea of Airtime Advance and launching it as its own in 2011.

In a move that was meant to offer customers products to keep them loyal, Vodacom launched Airtime Advance in 2011. The feature allows customers to get a R10 airtime advance when they run out. However, they need to pay an additional R1 the next time they recharge. Within a month of its launch, the product had over one million subscribers.

Responding to ITWeb, a Vodacom spokesperson said: "Vodacom can confirm that Ndabenhle Business Enterprises has, indeed, initiated a High Court action against Vodacom claiming that a product we launched, Airtime Advance, is its idea.
"Vodacom is defending this action and is seeking a dismissal of the case on the ground that the plaintiff's particulars of claim do not disclose a cause of action. The claim is not supported by facts and pertinent evidence."
Khaba claims he approached Vodacom with the airtime advance idea a year before it launched the product to alleviate problems experienced by operators. The 57-year-old claims he offered to buy additional prepaid airtime in bulk for operators of Vodacom's cellphone containers in townships on credit, which they would later repay, with Khaba getting five cents for every rand advanced to operators by Vodacom.
Khaba, through his company, proposed that his customers would pay back the airtime he advanced with Vodacom's fee and it would then pay him the whole amount of any airtime advanced to them.
He claims he proposed the idea to Vodacom's then chief operations officer Vuyani Jarana on 6 April 2010.

Partnering with a smaller company.
Extracting the product details.
Cutting ties with the smaller company.
Producing the product themselves.

Pieter van Vuuren

http://www.itweb.co.za/index.php? option=com_content&view=article&id=58707

Vodacom invited him in to come in to present his product, a specific presentation technology that incorporated graphic, 2d animation and video footage. Verbal promises made by Vodacom re the use of the product and orders. Vodacom extracted Technical details and samples under the pretence of pre-implementation technical testing. Vodacom then handed the samples and details to one of their primary suppliers and then cut the relationship with van Vuuren. When the matter was escalated to senior management, it remained unresolved, and then Vodacom's lawyers told him that he was to small to mess with them and to bugger off, or face their wrath.

In 1998 Pieter van Vuuren was invited to presented his product to Vodacom. The presentation was successful, and he was told that the product was to be used, they wanted ten to twelve of his presentations to market their electronic products and that he should not accept any other work while Vodacom sorted out the paperwork.

Vodacom then requested samples and product details, for “technicians to do pre-implementation testing”. Then all communication stopped, emails went unanswered, and calls were not taken.
The issue was escalated to Group MD, Pieter Uys's office and assurances were given that the issue would be sorted out. They were not.
In an attempt to sort this issue out van Vuuren contacted Vodafone, the UK owners of Vodacom. After initial assurances that they would follow this matter up, they were never heard from them again. Following this, van Vuuren sent the details to the Vodafone shareholders committee. They didn’t reply but the Vodacom legal department did. Jody Farah (Chief executive of the legal department) told van Vuuren in short that he should let this go, or the Vodacom lawyers would come after him.

“My experience in dealing with Vodacom, and in trying to rectify the situation has shown that the statements that Vodacom have published about their Accountability, Responsibility and Integrity are worthless. I initially thought this was the actions of over-zealous middle management, on closer inspection it has become clear that this is a strategy that has been used repeatedly with great success by Vodacom. The repercussions on my small company and family have been disastrous.

Partnering with a smaller company.
Extracting the product details.
Cutting ties with the smaller company.
Producing the product themselves.

Call Me

And finally, the recent Call Me issue. The Theft of an idea presented by a Vodacom Employee, Nkosana Makate, to his manager.
The Vodacom MD falsely claimed it was his idea, wrote it in his book and was later forced to admit this fraud in court. Even after the fraud was proven and that Vodacom were guilty, Vodacom initially got off on a legal technicality. When this decision was challenged in the Constitutional court, the decision was overturned, and the matter was resolved.

Justice Chris Jafta says the decision taken by the mobile network service provider not to compensate Makate for his ‘please call me’ concept is unfortunate and unethical.
“Having admitted that it had used Mr Makate’s idea to develop the ‘please call me’ service, it was not ethical for Vodacom to refuse to compensate him.”
Jafta also says Vodacom’s actions don’t suit a company of its magnitude.
“Vodacom’s conduct in this case leaves a sour taste in the mouth.”
The Constitutional Court has ordered Vodacom to engage with Makate to settle on an amount that he should be paid.
The court found a verbal contract with Vodacom and Makate over his ‘please call me’ idea was binding.
Justice Jafta says it would be unethical if the company didn’t compensate Makate.
“What compounds the matter is the fact that Vodacom entered into a contract with him, under which it now sought to avoid liability by raising technical defences.”
The High Court previously found that former Vodacom CEO Alan Knott-Craig tried to write Makate out of the concept for financial reasons.

It is clear from the above examples that Vodacom are quite comfortable with repeatedly using this strategy to acquire technology products from small companies, at no cost. The reasons are not difficult to understand, it saves them money, and they are more that likely going to get away with it.

The unanswered question is by whom, and how, is this practice going to be brought to an end

Vodacom's declared business principles,


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