The man who went from a call centre agent to CEO of a large South African telecoms company

Jorge Mendes has spent most of his career in the telecoms industry, working his way up from a call centre agent at Teljoy in the 1990s to Cell C CEO in June 2023. 

The majority of Mendes’ thirty-year career was spent at Vodacom, where he rose through the ranks before becoming the head of its consumer business unity. 

However, it began in 1994 at Teljoy as a call centre agent, an admittedly unglamorous start, Mendes told the TechCentral Show. 

“Over time, I have realised what I prefer doing and what I do not prefer doing. One thing I really like is fixing or building something,” Mendes said. 

This explains his journey through the ranks of ‘maintenance’ roles to the upper echelons of the C-suite executives. 

“I started as a call centre agent, so I have pretty much done everything, and I would recommend that everyone who starts somewhere starts right at the beginning.” 

Starting at the bottom enables one to understand customer behaviour and what drives loyalty towards a brand, providing valuable lessons that can be applied later on in management roles. 

“It is a really good place to learn and understand stuff regarding consumers and how a business operates, particularly what it needs to succeed.” 

After a handful of years at Teljoy, Mendes’ career began to takeoff when he joined Vodacom and assumed the positive of executive head for customer services. 

Mendes said one of the key things his move to Vodacom gave him was exposure to how a multinational business operates. 

He gained this exposure through stints at Vodacom Mozambique and Tanzania, working within their customer services departments. 

His rise through the ranks continued upon rejoining Vodacom South Africa, but this time within its sales and marketing division. 

After spending four years as head of the company’s consumer business unit, Mendes left Vodacom and took a seven month break.

During this break, he entertained some business ideas in the Middle East before receiving a phone call that would change his life. 

Joining Cell C

Mendes’ decision to take over the helm at Cell C was not straightforward. “Lots of discussions took place, and I don’t think they told me everything.” 

It was clear from headlines in the media that Cell C was a distressed business and perhaps even a sinking ship that needed close to a miracle to be saved. 

“When I arrived, I found out some stuff. Maybe that’s why I took the role.” It was really the challenge that Cell C presented that got Mendes interested in the job. 

“In the same vein, I think Cell C is kind of a replica of the country – full of challenges but has lots of opportunities and is on the right path.” 

“There are real challenges everywhere you look. When I saw the headlines and looked at Cell C from the outside, it looked chaotic, problematic and a fundamentally distressed company.” 

From reading various reports and articles on Cell C, Mendes had an idea of what was wrong with the company and where the issues lay. 

However, upon taking over as CEO in June 2023, Mendes quickly realised these problems ran deeper and wider than he thought. 

“This organisation has been recapped a number of times. It has probably had around R44 billion that has been wiped. 99% of companies like this close their doors.” 

Mendes has previously told Daily Investor that Cell C’s balance sheet looks like a crime scene after all the financial engineering that has occurred at the company. 

Despite a relatively strong start in 2001, Cell C has not met expectations. It was not the disruptive force many South Africans hoped it would be.

The company has failed to turn a profit in the 22 years it has operated, accruing an enormous debt burden that it is still struggling to pay off. 

It has also suffered from a lack of strategic direction, with a regularly changing leadership team and, at times, conflicting strategies. 

Over time, this has resulted in the company’s balance sheet being steadily weakened to a point where it was hopelessly insolvent. 

This is the point in time that Mendes joined Cell C, with the aim to turn the company around and make it stand on its own two feet without financial help from its largest shareholder, Blue Label. 

Saving Cell C

Mendes had an enormous task in trying to save Cell C when he joined, facing decades of mismanagement and poor capital allocation. 

As an example of the extent of the company’s mismanagement, Cell C operated under four different brands simultaneously until it launched a fresh look in August. 

“I think it is worth starting from scratch. That implies a sort of level playing field. We were starting at a minus when you look at the significant amount of debt and a disturbed strategy.”

Mendes has always remained upbeat, believing that the company can be turned into a sustainable business. 

“There is a tiny percentage of businesses that survive the situation we are in now and become unbelievable businesses, and I think that is where we are.” 

“I know I sound optimistic, but I really love the ingredients that Cell C’s got. Honestly, honestly, not for a second have I thought I made the wrong choice. It has never crossed my mind.”

Cell C switched straight into solution mode when Mendes took over, and the company appears to be on the path towards solvency and profitability. 

In Cell C-owner Blue Label’s latest results, the company was still technically insolvent, with its liabilities of R17.3 billion exceeding its assets of R14.1 billion. However, it was an improvement from the previous year.

This path will not be completed overnight, with CFO El Kope saying the company is only in year two of its six-year recapitalisation plan. 

“Our focus is not on the balance sheet yet. We focus on ensuring that operational KPIs are aligned and that we are cash-flow positive and on the front foot,” Mendes said. 

“In a nutshell, we will continue to grow the revenue across all our lines of business. That is a 100% reliable and sustainable company. And, I think, after 12 to 18 months, it will be something reasonable.”

“So, I think the momentum only starts now, if I am brutally honest. We have been looking internally for the past year and sorting out the foundations of how to address the market.” 

Kope agreed with Mendes, saying that instead of shifting focus completely onto the balance sheet, the company will continue on its existing recapitalisation journey. 

“We have consistently said the recapitalisation was a six-year programme, and we are only ending year two now in September 2024,” she said. 

“We will continue to unwind our liabilities, and you will start seeing the acceleration of that unwinding over the next two years. Then we will start focusing on the shareholder debt.” 

Ultimately, this has all been a period of preparation for Cell C to provide a platform from which it can grow, generate cash, and create a sustainable business. 

“I have never felt more confident in my entire life about the ingredients we have to drive revenue growth and be a sustainably profitable business.”