The cybercafe business is resembling a graveyard for organised chains

Businessworld - STAY AHEAD EVERY WEEK The cybercafe business is resembling a graveyard for organised chains. Bangalore-based Junction96 has downed shutters. Tata Nova is pulling out. DishnetDSL is closing outlets. Sify's iway, India's largest chain with 1,000 cafes, is yet to make profits. Paradoxically, the market is booming. Cybercafé revenues are seen doubling from Rs 250 crore now to Rs 500 crore in the next two years. IMRB pegs the number of cybercafes at 50,000 today, and this number is also doubling every two years. So far, it is the poky neighbourhood cafes that have seized the opportunity. Will any organised player crack this puzzle? If they do, it will probably be Sify. Its revenues grew to Rs 7.88 crore last quarter. Going by that, it could end this year with revenues over Rs 30 crore. Its billings of Rs 20-25 per hour are shared (70:30) between Sify and its franchisees. That's enough to let most franchisees break even in 24-30 months. The only one yet to make profits is Sify itself. But that is because in the last quarter it spent Rs 6.5 crore on the brand. It spent another Rs 7.3 crore sprucing up its back end. "It was a choice between maintaining cash profits and incurring an one-time marketing expense for the expanding cybercafe business," says CEO R. Ramaraj. It's this willingness to invest which works in Sify's favour. A late entrant, it came in with a nifty business model. Most cybercafes use a leased line/ISDN line for connectivity. More often than not, these are provided by BSNL/MTNL and suffer from severe bandwidth constraints. In contrast, Sify set up a wireless broadband network. Instead of using the BSNL/MTNL lines, its cafes access bandwidth via microwave receivers. Then, there is Sify's national IP backbone. Between the cafes, the ISP and the corporate network businesses, the network sweats more, resulting in faster return on investment. So iway's browsing costs have stayed as low as Rs 20-25 an hour. Then, it introduced a centralised billing system. All users get a unique identity and password, which locks them in and stops franchisees from underreporting revenues. It also lets them personalise their email and Web preferences. Today, 4 lakh registered users have already signed in. For iway, it is just a question of waiting for the profits.

ApiAp protests Banagalore law makers high handedness in regulating cyber cafes

Its unfortunate but true, Banagalore Police has finally passed through the regulation (details: http://www.bangaloreit.com/html/cyber%20crime%20notification1.doc )Its unfortunate, Bangalore city, the Silicon Valley of the east is in the league of China & Cuba for their respect to privacy. The regulation expects all Cyber Cafe operators to record the details along with a photo identity of all the people who access Internet in public places. Those who do not carry a photo identity need to be immediately photographed by a web cam. All the details of visitors have to kept for at least a year! We feel sorry Banagalore Cyber cell officials have not realized the complete implication of the law & perhaps begin a new chapter in cyber stalking. The personal records data can be misused. Begin with we foresee Women will be amongst the first to desert the cafes, refer the report, where a cyber cafe operator chased a girl,Unfortunately for him, he got his lessons from the Girl's brother. http://timesofindia.indiatimes.com/articleshow/294332.cms Now the Banagalore regulation offers a complete album -choose your target. It will be a delight for cyber stalkers ? How will a cafe owner ( age between 19 - 25 years )can safe guard this data from wrong intentions & as well maintain accuracy of the record ? Given over 60% of Banagalore netizens depend on Cyber Cafe for access, it will be like mapping the whole city population. The last such large attempts to maintain records were done by IT dept by issuing PAN number & election commission as voter id Card - its over 10 years & still struggling. The regulators do not realize the enormity of the exercise, what will be lost is the ubiquity in access to the net which is very important in developing the Digital society. Fortunately for us Banagalore cyber crime cell has 50 odd cases. This legislation is like a can of worms. The Bangalore regulators estimate 5000 cafes , some what a similar number of cobbler shop, or barber salon shop in Bangalore, Have they been licensed ? Can they be effectively be monitored. ? Countries who are more vulnerable of Cyber crimes, like London city which host as many cafe as Mumbai has & boasts the largest Internet cafes, do not insist on the recording the personal information of Internet surfer? Wonder what transpires and who inspires Indian regulators to do the impossible. We claim Regulation will bring legitimacy but unfortunately such regulations are a loose cannon ball, given the ambivalent cyber laws, many cafes operators from metro to small towns had to face harassments from the police or duped by the conman. It reminds us about the sad tale of the police harassment at Panickanadar Kudieuruppu a small village in the Tuticorin district of Tamil Nadu in 2002http://www.rediff.com/search/2002/apr/22cyber.htm & the Conman posing as CBI officer held in Kolkata http://timesofindia.indiatimes.com/articleshow/49968.cms http://timesofindia.indiatimes.com/articleshow/50459.cms Cyber Cafe business in at the crossroad, it promises lot of opportunity & hope to many http://timesofindia.indiatimes.com/articleshow/633478.cms But still a mirage, we are waiting for more meaningful, trusted content till then we are left with the customers preying fingers to what he chooses rather thanwhat we can lead , Whom do we blame ? Few cyber cafe operators who are finding it hard to make a living will from the operations would prefer to move out than face harassments. The result of such regulations is loss not for the operators but for our all initiatives to bring in the Digital society or do we leave it , as a swan song for another ICT4D seminar in another 5 star hotel ? The loss is just not of the micro entrepreneur but its a bigger loss to all the people who have not yet been inducted to the world wide web.

Fake Police raids

Off late I have been receiving a spate of emails/ calls /personal interactions complaining about Police raids on their cafes.

The common situation described is such raids are as follows :

Some people visit the cafe download music files / a recent movie clippings or some sexually explicit images. After downloading immediately these people tip off the so called Police and representatives of Indian Motion Pictures Association ( IMPA ), Anti piracy cell. The Police men orders for the shut down of the cafe and investigates all the computers . Of course in within no time they are able to locate the pirated files. The cafe owner is threatened with severe punishment starting with lodging of First Information Report ( FIR), lock ups etc ... They finally take away a signed confession on a blank piece of paper, in some cases confiscate the computers too. It is rumored in most cases the matter is settled with by meeting the demands and finally the FIR is never lodged or any court notices sent. Our inquiries have revealed most of these are fake raids and have not been authorized by the Police. It is a act of a few black sheep who very well understand the Cafe operators apprehensions. Most of the complainants have been seeking for a legal course. Unfortunately few have been able to corroborate their cases with any evidence for the obvious reasons. Further there can never be any legal course available to those who oblige to such hush money demands.

Why are we targeted ?

The Extortionist studies his prey carefully . They understand the Cyber cafe owner operates by himself, and makes sure has no support base in the vicinity . Those offering Large cabins for in the name of privacy are easy targets. Further thanks to stiff competition few cyber cafe operators in their own vicinity speak to each other thus never are able to share the commonly faced issues. Internet Cafes business are at the forefront of the cutting edge technology . New technology has been a challenges to social norms and old methods of business. so in the course of operations we as service providers have been caught in the bind. If you seek legal redressal then we have to follow the norms. Those who are deliberately promoting porn, selling pirated music are making it hard for all of us. While in certain issues there can be multiple interpretations. As explained by Cyber law practitioner Mr. Pawan Duggal in an article published in the Economic times. http://economictimes.indiatimes.com/articleshow/34093115.cms Thus in such cases, I feel the past conduct of the parties involved determines the course of legal action. you can take a few Precautionary measures as follow: # If you not done anything wrong than do not feel petrified by such threats. # Do not give away to prosecution threats. you are only making your case weaker. # Do not install unwanted software # clean the computer hardisk regularly for all such files which your customer may have downloaded # Keep the cafe environment open. # Build neighborhoods goodwill, finally you are amongst the special business who are able to make access of information affordable. # Speak the issues faced with other operators in the vicinity & seek each others support in countering such fake raids. And finally it is our collective responsibility to make others understand our contribution to the society and perhaps will lead to all of us in gaining more business opportunity and make our business sustainable.

Time flies ...

Its been almost a year since The Association of Public Internet Access Provider was established.

The primary reason was to offer a voice to many struggling micro entrepreneurs in India in operating the community Internet Browsing center's or call it Cyber Cafes or Telecenters.

The nascent Industry which in the USA & Europe as seen as a mix of entertainment and technology had a completely different meaning for the less developed countries . Cyber Cafe sans the Coffee has been the most popular way of offering high cost of Internet access economically by way of a shared access on pay per usage basis.

The Beatles in their book " The Beatles in Rishikesh " shares their surprise of Internet Cafes

I also love the visual variety in India, as one occasionally drives around Brahma bulls as they wander or sit in the roadway, or the juxtaposition of ancient and new, as internet cyber-cafes nestle in beside ancient temples to the Gods. And while I stopped counting long ago....

At the peak of the dot com boom it was not surprising to locate as many Cyber cafes as the barber shop ! The inquisitive for technology may have waned but not the entrepreneurship. Entrepreneurs in all the less developed countries have shared the same vision in making Internet ubiquitous. I have been able to get in contact with cyber Cafe owners in interiors of India , China, Philippines, Ethiopia, Indonesia and many more . Every where the story is same . The hopes of a catching a Innovative business opportunity : E-commerce et al but struggling to sustain the operation today & top it off with continuous regulatory pressures, Socially misunderstood. I have been receiving emails from numerous operators with almost the same sort of queries. I hope through this blog I shall try to communicate many of the commonly faced issues.

Wish me luck !

Did you say small town folks ?

Net Indya , A Cyber Cafe in Himachal Pradesh Solan It was fun , acquainting with Internet Browsing center operators from across the world . The more memorable like Dhiraj from Solan, A small town in Himachal Pradesh, India . It is usually the tax authorities chase the people. Here Dhiraj chased the service tax authorities to know how to pay the service tax levied on the Cyber cafes ! . As Dhiraj shared with us . The Service tax Authorities were at a loss to know under what classification cyber cafes are and hence were unable to tax . Here is a lesson to me A common man is more conscientious to his duty . A lack of convenience in compliance forces many to avoid taxes. Hats off Dhiraj !! Praful of Kalingpong, West Bengal ; Prakash from Sagar Madhya Pradesh were some other interesting folks .