From exclusive broadband business, Africa’s CWG explores DTH business

Africa’s largest Systems Integration and the highest capitalized Company in the ICT sector, the Computer Warehouse Group, CWG was initially incorporated in 2005, to co-ordinate and monitor the activities of the group’s three subsidiaries, . The earliest was Computer Warehouse Limited established principally to cater for hardware projects. Closely following this is DCC Networks, established as the communication arm, to provide VSAT, Metropolitan, Wide Area and Local area networks to corporate organizations. In order to concentrate on demands in the area of software solutions, system and training, the Expert Edge software was acquired in 1999. By 2012, CWG merged with its three subsidiaries, this made the subsidiaries cease to exist as separate entities, rather as divisions.

Prior this establishment, a branch in Ghana was set-up in 2003 to cater for the needs of the West African region. The Group Company was formed to provide Head Office functions and Shared Resources for the subsidiaries from a central point to make them leaner, efficient and more customer focused.

In pursuit of its Pan-African Vision, CWG established other regional offices in East and Central Africa; CWG Uganda Limited (2010) and CWG Cameroon Limited (2012) respectively to handle the business interest in these regions.

CWG believes in and pursues an excellent service culture, and delivers its operations through global best practices using its ISO9001 certification process across the whole group.

Early challenges

CWG had a series of rosy years between 2004 and 2007, when the company grew at an impressive rate of 75% year on year, with dominance in the Banking and Telecom sectors. We could do no wrong, and our bottom line seemed to defy gravity. Things suddenly came to a screeching halt in 2008, with the global financial crises resulting from the sale of subprime loans in America. Things were not helped by the local macroeconomic environment, which was characterised by skyrocketing interest rates and exchange rate volatility. These two factors contributed in no small measure to the near insolvency of the company.

The ATM business was then contributing $35m to our annual revenue with very good margins; this was suddenly wiped off. We found ourselves in a precarious situation, where we had a warehouse load of ATMs with no takers, and a huge stock of debt to service at a high interest rate. The company was facing a serious liquidity crises and was heading steadily towards bankruptcy.

Putting on our thinking caps, we came up with an ATM-as-a-Service business model. This was an instant hit, and a win-win strategy for both us and our customers; we had ATMs sitting idle in our warehouse, and they did not have headroom for additional capital expenditure. What we discovered was that this ‘accidental’ business model, guaranteed more predictable revenue and profitability over the long run than just selling the machines. It also attracted the interest of a Private Equity Firm, whose investment in our company in 2009 came in handy in retooling our company as a subscription based business on the back of cloud computing. It also helped in paying off our huge debt and eliminating the killing finance costs.


Technology disruption

By 2010, we had built a huge business in our telecommunications subsidiary, providing Wide Area Network (WAN) infrastructure for our financial sector customers based on very small aperture terminals (VSATs), contributing a bottom-line margin of about $3m per annum. The party was good while it lasted, but the wheels were beginning to come off, as undersea fibre cables landed at our shores, bringing with them relatively much faster and cheaper fibre infrastructure and promoted by very deep-pocket GSM Operators. They quickly took out everybody in their sights and left us with a loss of about $1m in 2011, which doubled the next year.

As the inevitable stared us in the face, we took a quick decision to proactively cannibalise our WAN business by selling our customers to the Operator. We overcame this challenge by repositioning our facility and infrastructure  for digital TV broadcasting in partnership with SES Astra as Nigeria raced to meet the July, 2015 deadline for Digital Switch Over. Today we have a potential of rolling our digital signals to over 27million erstwhile analogue households.

Our brand power

What stand CWG out among the competition is its excellent IT facilities and capabilities as well as strong relationships with global technology brands and esteemed clientele spanning over two decades. In recent interview with local media, According to Austin Okere “these three factors – facility, capability and relationship – have given us an edge in providing IT services and support in various industries in our countries of operation, especially telecom, oil & gas and banking. “About 50 per cent of mobile calls in Nigeria are routed through enterprise servers and storage managed and supported by us while 40 per cent of Telecoms Information Systems Managed Services are also provided by CWG.

“Same applies to the banking industry, about 30 per cent of Automated Teller Machines’ (ATMs) transaction pass through CWG’s Wincor-Nixdorf ATMs while about 35 per cent of ATMs installed base in Nigeria are supplied and supported by CWG,” OA said.

In addition, 20 per cent of bank branch transactions on data links were carried out through CWG’s Network Infrastructure.  The vision of the company is to be Africa’s Number one IT Platform Service Provider by 2020 by deploying technology solutions that enable growth.

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