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e-Services to renew Cyber Cafes

ISPs are innovating and offering a slew of services to combat the declining fortunes of cyber cafés, reports Vinita Gupta

The cyber café business has witnessed a sharp decline during the last few years. According to a CII-IMRB Broadband report, growth reduced from 60% in 2004-2005 to almost 20% in 2008.

As a result, ISPs who are mostly the owners of cyber cafés are looking at new revenue models. Decreasing revenues from Internet browsing, high rental charges, declining customer base, etc., are some of the reasons that are prompting providers to transform cyber cafés into a hub for a variety of e-services going beyond vanilla Web browsing and chat that were hitherto the mainstay.

Reasons for the decline

In the 1980s, the government mandated the setting up at least one PCO in every street. It launched new schemes, for instance, after 8 pm, the call would cost half the actual price and after 11 pm, the charges dropped to one fourth.

The common mode of communications has graduated from the postcard to the PCO and now the mobile phone. In India, the telecom sector is booming, the operators are offering lower call charges and still getting the maximum business and customer base. Like the PCO, there should be a regulation that at every nook and corner there should be cyber cafés.

Naresh Ajwani, President, Consumer Infrastructure and Operations, Sify Technologies revealed that the government policy for lowering the call charges did not apply to cyber cafés. There were many security challenges faced, for instance if someone called from a PCO and threatens an individual no action is taken against the PCO owner, but if a threatening email has been sent from a PC in a cyber cafe, action is taken against the café’s owner.

Business in India is price sensitive—when the charge of per call was around Rs 5-15 it was a failure, but when it was Re 1, it started growing. In case of cyber cafés, the price offered is also low, around Rs 5 for 15 minutes, but it is not following the same growth path.

“I do not know why people are discouraging cyber cafés; I believe that the ecosystem of the Internet will succeed when the government and people will look at cyber cafés for mass penetration as every individual cannot afford a PC. We can provide free Internet awareness programs in lean hours to citizens, provided we get a subsidy from the government,” said Ajwani.

Sunil Buch, Head-Marketing and Corporate sales, Reliance World mentioned that there are many reasons for slowing growth of cyber café business—real estate prices are growing, furthermore the need to keep a track of the people surfing from the cafés is a troublesome job for the cyber café owners and costs them too.

Chirag Mittal, Director, DreamWorld (Internet and games), stated, “The market for cyber cafés is on the decline (60% of the previous year). The turning points for the same are new ISPs giving attractive schemes for end-users; the availability of low-cost PCs and laptops; rising electricity costs, rising rentals and staff costs, and above all diminishing sales.”

We complain that the major

constraints in the growth of the Internet are low PC penetration and the lack of content in local languages, but Ajwani felt that it’s a myth as there are about 1,80,000 cyber cafés in India, with around seven PCs in each and that these are available for around 12 hours every single day. There are even tools available that can help people to translate English language content into the local language.

“For the growth of cyber cafés, the government should make a central law for cafes and the discriminatory approach towards cyber cafés law vis-à-vis PCOs should be removed, they should also provide low-cost PCs to cyber cafés,” added Ajwani.

Transformation phase

While PCOs were encouraged, as far as cyber cafés are concerned, there has actually been discouragement. All this has resulted in many cyber café chains closing down, but Sify that had entered the business in a big way is still in the running albeit it faces major challenges.

The trying times have made Sify look at the recent transformation of all their cyber cafés from iWay (my way) to ePort (everyone’s port) that would be providing many e-services to the people. Sify has around 3,000 cyber cafés in India out of which about 250 are in Mumbai.

“The initiative by Sify is not just a name change, but a complete re-branding initiative. This transformation will help to reposition us. More services like travel, education, utility, different kinds of municipal civic services, etc., will be available at our Internet cafes which from the last eight years have been primarily a place for Net surfing.”

Since Reliance World’s inception (2003), they were never just for Internet surfing but used to provide other services like e-learning, e-ticketing, online tests (like the NSE and BSE tests); a computer course named Little Genius that helps young people to learn basic computing like how to use Microsoft Office, how to open an e-mail account and access social networking sites, etc.

Sunil Buch, Head-Marketing and Corporate sales, Reliance World, stated, “There is a decline in the growth of cyber cafés, but we have not seen any impact of it on our revenues as there is growth in the number of people visiting the stores due to the other e-services provided by us.”

He added, “We are the front-end for the entire Anil Dhirubhai Ambani Group. Our Reliance Communication customers can pay their mobile bills; apply for personal finance, etc., here. We are not multiple brand outlets (that means that we do not accept other mobile service providers bills at the Reliance World) but as the market opens ups, we might look at it. We have 240 stores across 105 cities in India. In the future we would be looking at more stores and services too.”

Providing e-services

Sify will provide e-payment, recharge of the mobile phones, birth and death certificates and many more. Especially the municipal services like paying water bill, etc, which are usually only doable between Monday-Friday between 10 am and 2 pm, which is quite difficult and people have to take holidays to get these bills paid. Now with Sify’s e-services people can pay the bill as per their convenience.

These services will also take care of people who do not own a credit card and hence cannot do e-Shopping or e-Ticketing. For instance, if a person wants to buy a ticket online but he does not have a credit card, he can make a cash payment to these organized cyber cafés, which will buy the ticket for him.

To provide all these services the cyber café owners need to collaborate with many companies, for instance Sify has tied up with Yatra, the municipality, Reliance for selling life insurance and share trading, with ICICI Bank to provide credit cards to the cyber café owners, and others.

For the e-learning service, Reliance World has tied up with many institutes like IIM-Bangalore. By this service, the students can attend a virtual classroom from the Reliance World. They have a list of cyber cafés where the course will be available.

“The services available at cyber cafés include mobile recharge, e- cash coupons, PC sale and service. According to me, no real benefit can be available from a loss-making entrepreneur, but still the services would be available to the people at one place,” said Mittal.

Buch pointed out that in the future the cyber café owners can even rent a small space of the café to somebody (like digital printing solution providers) and can collect rent from them. In addition, customers will look at the service and convenience that they can get from the cyber café, which means that they will be more demanding.

Owners hope that this transformation driven by the fall in the profitability of cyber cafés will change things. Additional services and re-branding could improve the viability of their business.

vinita.gupta@expressindia.com