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Cafes headed towards Cyberia?

admin — Fri, 03 Nov 2006 22:04:52 -0800

PALLAVI PASRICHA
[ 2 Nov, 2006 2127hrs ISTTIMES NEWS NETWORK ]

The favourite hangout joints of GenX a few years ago, cyber cafes have fallen from grace now. Is this the end of the cyber cafe culture?

A few years ago, they used to be choc-a-bloc with youngsters who wanted to chat, surf and, if possible, live in the cyber cafes. Today, at the mere mention of the name, any youngster worth his laptop grimaces and says, "How tacky!" Cyber cafes have indeed fallen on bad days and figures are a proof of that. So, while the number of internet users have seen a steady increase from 33 million in March this year to 37 million in September, only 39 per cent of them are using cyber cafes.

So, what made the then hangout joints suddenly fall from grace? "The easy availability of computers and too much of negative publicity that came to surround cyber cafes," answers Ankit Sharma, a cyber café owner.

Most of the cyber cafes say that walk-ins are down by at least 50 per cent. While plush colonies have seen most of the cyber cafes closing down, the middle-class colonies have seen rates coming down from Rs 75 (for an hour of surfing) a few years ago, to a measly Rs 10 now.

Explains Shekhar Sharma, a cyber café owner in Ber Sarai, "My business has gone down by 50 per cent. I opened the cafe seven years ago. At that time, I used to get 150 to 200 customers daily, but now only 50 or 60 customers come daily." Cyber cafes around hostel areas and PGs are marginally doing better because students staying there don't own computers.

And it is not just the stand-alone cyber cafes that are suffering; even big players like Reliance and Sify iway are facing recession. Sify has over 3,300 cafes in the country while Reliance web world has roughly 2,300. Himanshu Sharma, the operations manager of a Reliance outlet says, "We opened the cyber cafe three years back and since then we have lost 15 to 20 per cent of our customers. We basically target students and working people who have to use the internet. We get about 70 to 80 customers daily and 50 per cent of these people come for internet surfing while 25 per cent come for online games." In fact, online gaming is the new attraction through which cyber cafes are trying to make money.

While this is the case in the metropolitan cities, in smaller towns the business is flourishing. Says Ashish Saboo, president, Association of Public ICT Access Provider -- an association of cyber cafes, "In smaller towns, the cyber cafes are doing much better. In these towns, people are slowly becoming aware of the internet and business is flourishing."

He says that local cafe owners are also running scared because they become a scapegoat if anybody uses their premises to send a threatening mail. While the cafe is raided and consecutively shuts down, the real culprit usually gets away by paying a small fine. The recent threats to the president, prime minister and other prank mails have been sent from cyber cafes.

But to keep a check on this kind of thing, hasn't the police made it mandatory that nobody can access a computer without showing his identity proof? "With the business so low already, who wants to drive away the users by asking for identity proof?" questions a cafe owner.

Logged out: Cyber cafes aren't too hot

web-admin — Tue, 31 Oct 2006 00:00:00 -0800

RITWIK DONDE

TIMES NEWS NETWORK[ TUESDAY, OCTOBER 31, 2006 12:00:32 AM]

MUMBAI: When cyber cafés began mushrooming across Indian cities they were considered a window to the world, a source of knowledge and information. Parents and teachers were a happy lot, expecting the youth to make full use of the new technology.

But, having coming under constant security scanner and being touted as shady joints promoting vices, the industry seems to be in the doldrums, with a majority of small players exiting the business.

There are about 200,000 cyber cafés in the country with more than 80% owned by individuals. Say café owners in the city, “It is getting difficult to conduct business with impending cyber café regulations and escalating operating costs. An average private cyber café gets about 50-60 footfalls in a day while the likes of Reliance Web World have 125 footfalls per day per store.”

Says Dilip Chaitalia, a café owner in South Mumbai, “Our footfalls have gone down by nearly 50%, with overall business decreasing by as much as 25%.” Also the cost of technology is rising with the advent of faster printers, webcams and regular software upgrades, he adds.

Café owners say business has been hit mainly by the impending regulations to police the cafes. “Our net earnings are even lower than a salaried job for the same skill set,” says Neelkanth Shanbaug, owner, Grafiti Cyber Café in Mumbai.

Where we used to earn Rs 100 an hour a few years ago, the rate has gone down to Rs 10-15 an hour along with the usage time. And now with regulations stating there would be a need to maintain an electronic log book of customers and monitor activity in the café, our costs would increase even more driving down margins, he adds.

Asserts Sarup Chowdhary, Director & CEO, Reliance World, “The compliance with the new rules and regulations would ensure a secure access but one that comes at a cost.” To put into effect rules like customer identification and constant monitoring of the premises, would mean an addition to the operating expenditure for all the players.

While the bigger cafes would be better off with this back-end addition it would be damaging to the smaller individual players, he adds. Reliance World which has as many as 25 outlets in the city offering internet access has not seen any physical growth in this number since its inception. An increasing number of smaller players are putting their hands up and saying they cannot afford to pump in the excess capital needed for the business.

Experts say that the biggies like Reliance can afford to play the volume games they can house as many 5,000 PCs in their cafes, the small guys can do with only 5-6 PCs. The downtrend in the industry may also be a reason why Reliance World now offers value-added services like video conferencing, video resumes and video mails to attract more users.

The fall in the use of cyber cafes is reflected in a recent survey by the Internet and Mobile Association of India (IAMAI) and IMRB International has revealed cyber cafe users have declined from 52% in ’03 to 39% in ’06. Increased home PC usage and higher broadband penetration is also affecting cyber cafe footfalls. However, not all industry players believe cybercafes are becoming less attractive.

According to a latest survey conducted by AC Nielsen, as many as 34% users now surf the internet from cybercafes, 30% from home, while internet users from offices have fallen to around 20%. Explaining the fall, Dr Subho Ray, President, IAMAI says that the rise in Web 2.0 applications like blogging and the growing e-commerce business have also contributed to an increasing number of users preferring the privacy of their homes over public access points.

Says Ashish Saboo, president, Association of Public ICT Tools Access Provider, less dependence on shared access and stricter regulations are making the case worse for the small entrepreneur in this industry. “The opportunities are huge and globally the e-commerce business is growing but the odds are stacked against us,” he adds.

©Bennett, Coleman and Co., Ltd. All rights reserved.

Can’t let states spoil the surf, feels Nasscom

web-admin — Sat, 30 Sep 2006 00:00:00 -0700

The Economic Times, TIMES NEWS NETWORK

K YATISH RAJAWAT AND RITWIK DONDE

MUMBAI: The Mumbai police’s decision to regulate internet cafes as public amusement places through a gazette notification has boiled over into a national issue. Nasscom, along with other national bodies, is trying to get the IT Act amended to regulate the cafes. The objective is to prevent state government and state police from coming up with their own norms to regulate the cafes.

The move to put in place a centralised legislation gained momentum after ET first reported (in issue dated September 22, ’06) the Mumbai Police’s initiative to regulate the cyber cafes in the city.

Sunil Mehta from Nasscom told ET, “There has to be a national debate on the issue of policing the cyber cafes and other access points for the World Wide Web.” There is definitely a need to have a central law to monitor cyber cafes in the country instead of the piecemeal regulation that exists in the different states presently, he said. It is very important to realise that the internet has become a vital issue for national security.

The Indian IT Act is modelled on the EU legislation on e-commerce. IT Act section 79 has been revised to bring-out explicitly the extent of liability of intermediaries like ISPs and internet cafes in certain cases. The IT Act provides the power to make rules for “intermediary” including “cyber cafes” under section 87. Though, no specific rules have been framed. The lack of any legislation has given the state government the freedom to pursue their own rules.

“Currently, the state governments are not mature enough to frame IT laws and also there is no deliberation with the players in the business before framing such laws,” says Ashish Saboo, president, Association of Public ICT Tools Access Provider. Cyber cafe regulations in Bangalore and Chennai propose maintaining internet caches and cookies for a year. The UP government is even proposing a ban on online chatting in cyber cafes. All these legislations are clearly an evidence that there needs to be consistency in framing the laws.

Says Subho Roy, president, Internet and Mobile Association of India, “There is a lot of ambiguity in the laws governing cyber cafes at the moment. Different states have varied rules on cyber cafes, thus the need to have a central legislation.” The laws should also be simple and same for all the players in the business, otherwise small local players would be forced to wind up their business , he added.

Industry watchers also say that over-rigorous implementation and variance in laws among states would lead to the small internet cafe owners being forced to sell their business to bigger players like Reliance WebWorld, Sify iWay and others.
According to a recent gazette notification, the Mumbai police wanted to license all internet cafes in the city, classifying them under the public amusement category. Each internet cafe owner will have to shell out a licensing fee of Rs 500 per computer for registration.

The state government had published a notification to seek public feedback on the proposed rules, which give the police the discretion to reject a licence. After the ET report on the issue and a deluge of feedback to the state police department, the police decided to reduce the fees per computer to Rs 75.

According to the draft rules, a no objection submission from the landlord/society where the cyber cafes conduct their business, along with NOCs from the civic body’s health and other departments, will also be needed. The rules do not, however, cover STD/ISD booths which also have computing terminals for VOIP calls and email communications.

The rules seek to identify internet cafes on the basis of whether online gaming is being carried out there. The city police has wanted to regulate internet cafes for the past three years but the urgency appears to have increased after the investigations in the 7/11 blasts.

Highlights Higher licence fees would mean small players selling off to corporate players like Reliance WebWorld and Sify iWay, say industry watchers.

Cyber cafe regulations in Bangalore and Chennai propose for maintaining internet caches and cookies for a year
The Uttar Pradesh state government is even proposing a ban on online chatting in cyber cafes .Mumbai Police wants each internet cafe owner will have to shell out a licensing fee of Rs 500 per computer for registration.Rules do not cover STD/ISD booths which also have computing terminals for VOIP calls