Hisham Hendi’s highs and lows as head of Vodacom Tanzania
His five years at Vodacom have been eventful
What you need to know:
- From taking part in the successful listing of the telecom firm on the Dar es Salaam Stock Exchange (DSE) to announcing profits, Mr Hendi has seen it all.
Dar es Salaam. Mr Hisham Hendi’s tenure at Vodacom Tanzania finally comes at an end on November 1, 2021 to close the chapter for the man who has led the country’s leading telecommunication firm through several ups and downs.
From taking part in the successful listing of the telecom firm on the Dar es Salaam Stock Exchange (DSE) to announcing profits, Mr Hendi has seen it all.
His five years at Vodacom have been eventful. Having joined the company in 2016 in the capacity of Director of the Consumer Business Unit, it goes without saying that he was crucial in the execution of the telecom firm’s strategies when Vodacom Tanzania’s Managing Director was Ian Ferrao.
One can, therefore, only choose to be unfair if he/she decides to omit Mr Hendi’s name on the list of individuals who worked hard to successfully complete Vodacom’s Initial Public Offering (IPO) in 2017.
In line with the Electronic and Postal Communications Act (Epoca) 2010, which compels telecommunication companies to offload 25 percent of their stakes to the public, Vodacom successfully raised Sh476 billion through issuance of 560 million shares.
Though expectations were high that many more telecommunication firms would list on the bourse after the Epoca 2010 was amended through the 2017 Finance Act, nothing has happened since then and Vodacom emerged as the odd one out.
The listing brought good news to the investing public as the company went on to announce a 200 percent jump in net profit during the year ending March 2018. Net profit rose to Sh170.24 billion during the year ending March 2018 from a mere Sh47.554 billion during the preceding year.
The end of tenure for Ian Ferrao saw Mr Hendi rising to the position of acting Managing Director.
With the government denying a work permit to a Kenyan, Sylvia Mulinge, to work as Vodacom Tanzania Managing Director, Mr Hendi was confirmed into the position, officially assuming the role on September 1, 2018.
Fines, fines and fines
Apparently, Mr Hendi will live to remember the year 2019, though, for a bad reason.
The fifth phase government’s resolve to ‘stamping out tax evasion by multinational companies’ resulted into pains by some top executives of the firms and payments of massive fines.
This was the situation that Mr Hendi found himself in when in April 2019 he, along with eight others, appeared before the Kisutu Resident Magistrate’s Court, facing ten counts, including leading a criminal network and occasioning the government a loss of Sh5.893 billion.
Though Tanzania had not officially adopted plea bargaining in its legal system at that time, Vodacom Tanzania had no option but to agree to terms for the release of Mr Hendi and his co-accused. The firm paid Sh6 billion for them to secure their freedom from the DPP-initiated charges.
In June 2018, the then managing director for Viettel Tanzania, trading as Halotel, Mr Le Van Dai and his Zantel counterpart Mr Sherif El-Barary were arraigned along with four others over fraudulent use of network facility.
They were later released after payment about Sh1.2 billion in fines.
It was in July 2019 that the plea bargaining system was officially introduced in Tanzania through a legal provision that was meant to ensure timely delivery of justice, reducing backlog of cases, as well as reducing inmate congestions in prison facilities.
Outgoing Vodacom Tanzania chief executive Hisham Hendi speaks during an interview at Mwananchi Communications Limited headquarters in Dar es Salaam in June 2021. PHOTO | FILE
More profits and dividends
The fines notwithstanding, the year ending March 31, 2019, was also good for Vodacom as the company paid a dividend per share of Sh24.41 after a rise in profits.
The company paid a total dividend of Sh54.454 billion, rising from Sh38.8 billion that was paid during the preceding year (year ending March 31, 2018).
In May 2019, Vodacom Tanzania Plc announced its preliminary consolidated financial results, showing that its service revenue crossed the Sh1 trillion-mark to settle on Sh1.016 trillion during the year ending March 2019 compared to Sh977.9 billion recorded during the year ending March 2018.
And finally, a loss
For the first time since its listing on the DSE, Vodacom Tanzania Plc shareholders did not receive a dividend this year (2021) after the company announced a net loss of Sh30 billion for the year to March 31, 2021, primarily on account of recalculated taxes.
“Following the net loss after tax for the year, the board of directors has decided not to recommend dividends in relation to the financial year ended March 31, 2021,” the company announced. Mr Hendi was however confident that looking forward, the firm’s cost management programme and proactive measures to drive digital and financial growth would improve the profitability of the Group in the new financial year.
The company, just like others in the telecommunication sector, was adversely affected by a rise in expenses to accommodate the implementation of biometric registration and Covid-19 costs. The barring of services to 2.9 million customers had had a significant impact on the revenue and profits of the company. The company was also to contend with depreciation as calculated using the adopted International Financial Reporting Standard 16 – IFRS 16).
Mobile money levy
Mr Hendi is leaving Vodacom Tanzania to assume a new role at Vodafone Group in Spain at a time when the government’s new levy on mobile money transactions is biting.
Speaking in his capacity as chairman for Tanzania Mobile Network Operators Association (Tamnoa), Mr Hendi is quoted saying that since the levy became effective, mobile money transactions had gone down by 45 percent.
This, he said, had adversely affected telecom firms’ revenues and their overall contribution to government taxes.
