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| Goodnight
Internet Supermarket! |
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Few years ago, it was the cynosure of all business eyes. Everybody
wanted to have a chunk of the fast profit- making business
or so it seemed. But not long after, the business turned sour
becoming more of a nightmare to operators. Customers deserted
them. Public power supply became elusive. Crime bursting operatives
became their regular guests. They were forced to close shop.
Such is the
story of the Cyber café and its operator in Nigeria.
Pathetic as their story may look, experts insist they have
a share in their predicament. But should they be singled out
for blame in an environment that is everything but business
friendly?
The collapse of the Cyber Café business is our spotlight
this month. It is written by ROMMY IMAH with additional reports
from IFEANYI OSUEKE and FRANCA ENEGBETA. Flip over and have
an exciting time…
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Requiem for a once
booming business |
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The Internet serves
as the platform for research, business and even education for
its users. New skills, new knowledge, new businesses and new
contacts are acquired making use of the information super-highway.
For first time users, it is as infectious as pool betting- the
further you go, the more addicted you become. But unlike pool
betting, opportunities, unquantifiable opportunities abound
in the Internet.
A couple of years ago, it was a booming business. The excitement
of going to the Cyber café for research and other online
business transactions knew no bound. As a result, cyber café
spots were opening up in virtually every street in all major
cities in Nigeria. The |
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revolution
in the ICT sector also contributed immensely to the boom in the
business. And so, the role of the Internet as a means of bridging
the digital divide came to the fore.
According to Wikipedia, the free encyclopedia, a Cyber café
is a place where one can use a computer with Internet access, mostly
for a fee, usually per hour or minute; sometimes one can have unmetered
access with a pass for a day or month, etc. It may serve as a regular
café as well, with food and drinks being served.
Located world-wide, many people use Cyber cafes when they are travelling
to access the webmail and instant messaging services so as to keep
in touch with their family and friends. Beyond this however, in
many developing countries like Nigeria, Cyber cafes serve as primary
form of Internet access for citizens because a shared-access model
is obviously more affordable than personal ownership of Internet
facilities.
Apart from Cyber cafes established by hotels, libraries and airports
for the convenience of their customers, a substantial number of
Cyber cafes in Nigeria for instance, are privately owned. And it
is these privately owned ones that are massively patronized. But
in recent times, the Cyber café business in Nigeria is crumbling
at alarming proportion. And from every indication, it seems set
for further degeneration.
Described as a natural evolution of the traditional café,
what has today popularly become the café started as a place
for information exchange, and has always been used as a place to
read the paper, send postcards home, play traditional or electronic
games, chat to friends, find out local information.
Elsewhere, while most Internet cafés are private businesses,
many have been set up by government and non-governmental organizations
to help bridge the 'digital divide', providing computer access and
training to those without home access. For example, the UK government
once supported the setting up of 6000 telecentres.
In looking at the evolution of the Cyber café, Wikipedia
recalled that as Internet access is in increasing demand, many pubs,
bars and cafes have terminals and so, the distinction between the
Cyber café and normal café is eroded. But there appears
to be a global recession in Cyber café business however,
the situation in Nigeria looks alarming.
So, why is this once lucrative and vibrant business extinguishing
with such supersonic speed in Nigeria? Why is Cyber café
business becoming history in this part of the world? Or is it not
an irony of sort that while the ICT sector in the country is growing
with such an impressive rate, the Cyber café business is
rapidly dying? Questions!
Experts spoken to by this magazine were united in agreeing that
poor business knowledge and plan were monumentally responsible for
the recession being witnessed in the business today. Perhaps only
a few of the operators knew that Internet related business is a
cut-throat one especially when it is done without sufficient business
knowledge.
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Take the issue of
the Internet Service Providers (ISPs) for example. A research
study last year showed that in seven years of steep rise in
mobile connections, it was everything but rosy for Nigerian
Internet Service Providers. The report had it that within
a short space of three years of commencing operations in Nigeria,
about 60 Nigerian ISPs have closed shop.
According to the report, there existed a huge gap between
demand and supply of bandwidth brought about by consumers'
inability to buy the Internet infrastructure. This was said
to be a spillover effect of non-accessibility to public power
supply, which is a common phenomenon in Nigeria.
The report went further to show that 51 of the 60 ISPs that
closed shop said that poor power supply was responsible for
their predicament promising to execute their licenses if power
situation improved.
It is certain that in line with the peculiar way of doing
business in Nigeria, some of these ISPs that closed shop did
not tell their clients (which include Cyber café operators)
that they were being forced to wind up due to some factors
beyond their control. And so it was possible that as soon
as they closed shop, their Cyber café clients followed
suit. |
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And this is
why experts argue that there was need for any prospective Cyber
café operator to do an audit check on the performance of
available ISPs and pick the one that most suit his expectations.
The process will save the prospective operator money and the grief
of running around in search of solution when it would have become
late.
The ISPs have their peculiar problems. While some of them would
fail to pay for bandwidth space on time, others come slow in responding
to distress calls. Whereas some of them are problem-prone during
rainy season, some others lack the technical know-how to respond
to problems from clients. These are some of the issues that need
to be considered by prospective Cyber café operators.
But why are the Cafes dying?
Reports have it that recession in Cyber café business has
assumed a global phenomenon. In European countries in particular,
the number of pure Cyber cafes is decreasing by the day since more
and more normal cafes offer the same services. There are also some
European countries where the total number of publicly accessible
terminals is also decreasing.
It is believed that the cause of this development is a combination
of complicated regulation, relatively high Internet penetration
rates, the widespread of notebooks and Personal Digital Assistants
(PDAs) in use and the relatively high number of WLAN hotspots. In
Germany for instance, many pubs, bars and cafes offer WLAN (Wireless
Local Area Network), |
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but no terminals since
the Internet café regulations do not apply if no terminal
is offered.
Additionally, the use of Internet cafés for multiplayer
gaming is very difficult in Germany since the Internet cafe
regulations and a second type of regulations which was originally
established for video arcade centres applies to this kind of
Internet cafes. It is, for example, forbidden for people under
the age of 18 to enter such an Internet café, although
particularly people under 18 are an important group of customers
for this type of Internet café.
In Nigeria, the operational environment is |
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not too different
from the situation in Europe except for the issue of infrastructure.
Infrastructural problem like power is generally seen as the greatest
challenge militating against the growth of industries in Nigeria
including Cyber café business.
Many of the Cyber café operators could not cope with the
cost of running alternative power source. President of the Nigeria
Internet Group, Engr. Lanre Ajayi agrees that erratic power supply
is the greatest factor responsible for the pre-mature dearth of
Cyber cafes in Nigeria. “There are basically two factors that
can be traced to this. One is the cost of powering the cyber cafe;
the bulk of expenditure of cyber café goes on power or diesel.
And that is affecting the profit, eating into the margin very deeply.
“Again, the cost of the bandwidth is very high. Those two
cost elements are affecting the margin of operators and users are
not willing to pay more. They have the situation where revenue remains
constant but the cost keeps increasing. So when the cost overtakes
the revenue, then they are running at a loss. That is what happens
to the cyber cafes and they are forced to close up”.
Ajayi who insisted that the real cause why the cafes are shutting
down has to do with power argued that if the cost of power comes
down, the cyber café will be comfortable and some people
will go to them. In addition to this he said the computer as an
important instrument for Internet access should be made affordable.
“The argument that the access at home is affecting them is
a factor but it is not the major factor because I can tell you that
not every home can afford a computer. The computer is still much
more expensive than the television which is available in almost
every home. So until we are able to bill the cost of the computer
at par with the cost of the television, I am afraid not every home
will be able to afford it.”
Both Adekunle Adekoya, chief software architect, Havila Cyber café,
Lagos and Taofiq Mustafa, head operator, Cybertech, Fadeyi agree
that the major predicament being suffered by Cyber café operators
is the absence of power supply. Besides, they argue that the entry
of traditional voice telecom operators has in no small way contributed
in pushing Cyber café operators out of business.
In an interview he granted a Lagos based daily, president of the
Association of Cyber café and Telecentre Operators of Nigeria,
Layo Omotola attributed the state of affairs in the business to
a number of factors including the incessant clampdown on operators
by operatives of the Economic and Financial Crime Commission (EFCC)
as a result of increasing cyber crime in the country in addition
to the inclusion in their bouquet, Internet service provision by
private telecom operators- fixed and mobile.
Omotola noted that individuals and organizations who hitherto were
customers of the Cyber cafes have now abandoned them in preference
for telecom operators. This situation he said has resulted to a
drastic decrease in the number of functional cafes in the country.
According to him, in 2003, the country had over 15, 000 Cyber cafes
with over 10, 000 of them sited in Lagos State alone. “As
at the end 2007, the number had dropped to 1,002, and with a recent
statistics taken by us, functional cybercafés are now below
600.”
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Because there are many
opportunities in the modern business world often, enthusiastic
entrepreneurs burn their fingers on the first attempt to start
and run a business. This leads to loss of capital and the appetite
to try again.
It is for this reason that project experts caution that careful
preparation should go into any new venture to ensure that a
just reward is reaped from the business. Business skills can
be learnt. Entrepreneurs should have the best guidance and support
at the start of their business to ensure a profitable and sustainable
business.
Many of the operators who delved into the business without proper
planning have long discovered that as quickly as the returns
were coming, so the |
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challenges.
In fact those of them who had to borrow from the bank to float the
business are today biting their fingers as the debt burden on their
head, resulting from their inability to pay up is rather heavy.
One other problem faced by operators is the activation of some
virus-carrying messages by some unsuspecting customers. Some of
these messages have easily ravaged networked computers in a café.
Some of the operators cannot equally afford original software because
of what some of them consider as the 'exorbitant cost'.A greater
percentage of the customers that patronize Cyber cafes are within
the age bracket of 15 and 35. Many of them, who visit the café
especially for night browsing, come there to watch pornographic
movies online. And experts insist that online pornography come with
various forms of virus.
Again, privacy is considered a key factor in the course of sending
information over the Internet. And this is one thing the Cyber café
cannot guarantee. Some criminally minded people capitalize on the
porous nature of the café environment to spy on what some
other people are doing on the Internet.
It is common knowledge that in situations where a user does not
sign out properly from his e-mail account for example, another user
could gain access to some of the information in a previous user's
account, and could use this to the detriment of the legitimate user
hence the desire of Internet users to have private access at home.
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Today,
with the emergence of Smartphones like the Blackberry and
the Pocket PC, promoted by both the fixed and mobile telecom
operators, the Cyber cafe has lost a substantial portion of
its market. Thus, Internet service offering is no longer the
exclusive of the ISPs as virtually every player in the telecom
industry now offers Internet service either through the mobile
phone, the laptop or the desktop at home.
Analysts contend that with the current convergence drive
in information technology, the mobile phone stands a better
position to serve the consumer with
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ease than
the PC especially the upwardly mobile corporate executives. Nowadays,
subscribers to Smartphones for instance, hardly patronize the Cyber
cafes nor worry about getting to the office or carrying the laptop
computer about before accessing their mails or looking for veritable
information in the Internet. The Smartphones now do the jobs.
Indications are rife that the patronage for the Smartphones would
continue to hike especially if prices of the phones continue to
come down. In fact, a research result released sometime ago by Point
Topic and YouGov showed that while current usage of the mobile phone
to access the Internet is dominated by work-related applications,
new users are much more interested in entertainment and keeping
in touch with their friends.
The research pointed out that the quest for this mobile technology
is driven by the consumer's desire for convenience and practical
solutions especially in the case of Nigeria, now that there is growing
interest in mobile banking.
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With the crash
in prices of brand new and fairly used laptops and desktops
in addition to the availability of affordable Internet cards
and USBs, patronage for Cyber café services is obviously
doubtful. Furthermore, the constant raid on Cyber cafes by security
agents especially operatives of the EFCC have led to Café
operators running away for safety and in search of alternatives.
Any
solution in sight?
Sometime ago, global software giant, Microsoft introduced
SteadyState, a unique product designed to
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salvage
the Country's failing Cyber café business. The product according
to the promoters was targeted at reducing the cost of running conventional
Windows operating system. While introducing the application, License
Compliance and Anti-Piracy manager of Microsoft MEA, John Okereke
said the failing business drew the attention of the software giant
because Internet cafés and kiosks are a rapidly growing environment
for shared access. He added that the business model of any successful
Internet café depends on high-quality, reliable, computer
access to customers while minimizing the overhead cost of acquiring
and maintaining shared computers.
According to him, “Cafés and kiosks
can be rough environments for shared computers; streams of anonymous
users can't usually be trusted to treat the system gently. That's
why you'll be glad to have Windows SteadyState - with user restrictions
to help prevent problems and Windows Disk Protection to wipe away
any problems that do occur”.
Highlighting the high rate of pirated software
usage in Nigeria as one of the reasons for the failure of cyber
café business, the Microsoft representative stressed the
need for cyber café owners to invest in original software
license for genuine products as this will ensure that their computers
would always have the needed support offered by the solution providers
and reduce downtime and associated risks.
Chief software architect for Havila Cyber Café, Adekunle
Adekoya believes the solution to this failing business is merger
and acquisition, a replica of what happened in the country's banking
industry. |
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While introducing the
application, License Compliance and Anti-Piracy manager of Microsoft
MEA, John Okereke said the failing business drew the attention
of the software giant because Internet cafés and kiosks
are a rapidly growing environment for shared access. He added
that the business model of any successful Internet café
depends on high-quality, reliable, computer access to customers
while minimizing the overhead cost of acquiring and maintaining
shared computers.
According to him, “Cafés and kiosks can be rough
environments for shared computers; streams of anonymous users
can't usually be trusted to treat |
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| the system
gently. That's why you'll be glad to have Windows SteadyState -
with user restrictions to help prevent problems and Windows Disk
Protection to wipe away any problems that do occur”.
Highlighting the high rate of pirated software usage in Nigeria
as one of the reasons for the failure of cyber café business,
the Microsoft representative stressed the need for cyber café
owners to invest in original software license for genuine products
as this will ensure that their computers would always have the needed
support offered by the solution providers and reduce downtime and
associated risks.
Chief software architect for Havila Cyber Café, Adekunle
Adekoya believes the solution to this failing business is merger
and acquisition, a replica of what happened in the country's banking
industry.
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“The solution
to the cyber cafe business is merger and acquisition. With the
level of productivity in the business now, we cannot boast of
making headway. When we merge we will have a new era of management
that will not work based on sentiments because each individual's
capital is at stake. And that is what we are saying that if
we have the capability to survive, then we will remain in the
business because whether private access or not, it is not everybody
that can have access to private ownership; there will |
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always be
people that cannot afford a PC”, he said. For Sabinus Eboh,
a computer engineer and analyst, the solution lies on improvement
on the country's social infrastructure especially public power supply.
Besides, employees of Cyber cafes should be given adequate orientation
with regard to the running of cafes while experienced maintenance
engineer should be engaged at all time.
“One of the things that can be put together
to help in the revival or improvement of cafe running is the issue
of constant electricity supply from the public power supply. The
use of diesel and fuel in the running of generators which serve
as source of power supply to the cafes cost a lot of money.
“Employees of cyber cafe should be given some
orientation as regard the running of cyber cafes by experts in the
ICT industry. Good and qualified hands should be employed. A good
and experienced computer maintenance engineer should be engaged
or in the alternative a good IT consultant should be contracted
for the purpose of maintenance at an agreed monthly or yearly fee”,
he said.
The death of the cyber café business has been
a source of worry to Nigerians especially those at the forefront
of the advocacy for the use of this as an instrument of bridging
the digital divide separating the country from the rest of the technologically
advanced world. |
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