Cell C places profitability task on new CEO

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 15 Jun 2023
Cell C CEO Jorge Mendes.
Cell C CEO Jorge Mendes.

As Jorge Mendes prepares to take control of Cell C, the new CEO faces an uphill battle in managing the debt-laden mobile operator.

Cell C, which has financial constraints, recently completed a painstakingly-long cash-raising exercise led by the telco’s largest shareholder, Blue Label Telecoms, but is not out of the woods yet.

In addition, the telco has strong rivals on the market, and a huge task has now been placed on Mendes to fend off competition.

In his first remarks as CEO, Mendes acknowledged he is joining Cell C “at such a critical time in its history” but believes he will succeed.

After ITWeb broke the news yesterday, Cell C announced Mendes’s appointment today, saying it’s confident he will turn the company profitable.

This will not be an easy task, considering none of the previous six CEOs who have been employed by Cell C since its inception have managed to do so.

Talaat Lama was the first CEO who tried and failed, followed by Jeffrey Hedberg. Lars Reichelt had his shot to stabilise Cell C from 2010 to 2013, and next in line was telecoms veteran Alan Knott-Craig.

Jose dos Santos had his opportunity after Knott-Craig, and most recently Douglas Craigie Stevenson.

Now, Joe Mthimunye, Cell C board chairman, says Mendes is the right man to deliver profitability.

“We are confident his leadership and vision will help to take Cell C to new heights of growth and profitability in the years to come,” says Mthimunye in statement today.

"Jorge has a deep understanding of the telco industry, and his track record of success speaks for itself.”

Mendes is an old hand in telecoms, with over 25 years of experience. He spent many years with Vodacom and had stints with the company in the Democratic Republic of Congo, Mozambique and Tanzania, before joining the South African operation.

Nonetheless, he has an uphill battle ahead, considering Cell C’s history and the growing competition.

The debt-laden mobile operator recently secured fresh funding to recapitalise the business, but is still behind its peers Vodacom, MTN and Telkom on key metrics.

Cell C is valued at R3.1 billion, according to Blue Label Telecoms.

Blue Label co-CEO Brett Levy believes Cell C will corner the market in the next two years because the mobile operator has “really good assets” that will give it an edge in the competitive market.

In his remarks today, Mendes said: "I believe Cell C has tremendous potential and I look forward to working with the talented and dedicated team to deliver innovative solutions and exceptional service to our customers."