by Gregorio G. Deligero
Faced with stiff market competition, deep price cuts in laptop and desktop computers and cheap rates of Internet service providers, Internet cafés in Davao City are seizing opportunities emerging from the lucrative Information and Communication (ICT) industry to continue keeping their businesses viable.
“We are now innovating in order to survive. We have to make ourselves continuously relevant to the IT industry in order to survive,” said Adolfo “Boy” Solanor Sr., president of the Internet Cafés Association of Davao, Inc. (ICAD).
For instance, he said, the infrastructure of the Internet cafés is being made ready for the coming surge in business processing outsourcing (BPO). With Davao City becoming a top destination of BPO companies, demands for outsourcing jobs like medical transcription and graphic design are expected to increase.
“It is just a matter of tying up with them. Our equipments are in place for medical transcription and voice BPOs,” Solanor said, adding that some Internet cafés are “even thinking of becoming coffee shops again.”
Affected
Solanor said that among the key factors affecting the operations of Internet cafés, particularly in Davao City, is the decrease in the prices of laptops and desktop computer units, accessibility to wi-fi-enabled places like coffee shops and restaurants, and the availability of USB “which one can plug into the CPUs any time, any place.”
Another factor, he added, is the availability of cheap service charges of the Internet Service Providers (ISPs).
Amazement
Despite the challenging factors besetting the internet café business, Solanor expresses amazement over the influx of new café businesses operating in Davao City.
“It’s amazing because while in one year some 300 internet cafes fail to renew their licenses, suddenly an equal number or even more of them crop up to apply for get permits. You won’t believe it, but we now have 500 Internet cafés with 7,500 computer units. This is a far greater number compared to the previous year’s 400,” he said.
Solanor said he got the figures from the official records at the City Business Bureau. ICAD is a member of the Internet Café Accreditation Board (ICAB), a composite team spearheaded by the business bureau, which regulates Internet café operations in the city.
He attributed the influx of new operators to the OFWs pouring in their hard-earned money into the Internet café business.
“Many of them finance their relatives back home, most of whom invest in Internet cafés. That’s because what they see, especially at night, are Internet cafés which are usually full. What they don’t realize is that almost nobody goes to the cafes during daytime. It is still viable even if they can only break even, which is the trend,” he said.
Optimism
Aside from slowly shifting to other functions, internet cafés will continue to flourish, according to Solanor, because of continued demand, particularly from the lower class population.
“The economic situation in the Philippines, where most households don’t have internet connections like the rich nations, is a blessing in disguise. Many poor people whose households do not have internet connections will still need us,” he said.
It is for this reason that Solanor said they have been advising their fellow internet café owners against cutting their prices “as this is a sure-fire way to lose heavily and eventually go out for business.”
Edge Davao discovered that the average fee per hour charged by internet cafes in the downtown area and key urban centers in Davao City’s major administrative districts, ranges from ten to fifteen pesos. Some cafés, especially those offering only networking games sans internet connections, even charge as low as eight pesos per hour.
For his part, Solanor said his internet café operating inside a mall charges no less than twenty pesos per hour, the price floor imposed by mall management.
He cautioned his fellow café operators offering very low price that they will eventually end up losing their business. “This is especially true with cafés which are into gaming because you have to update their units,” he said.
In case café operators in Davao City come up with a fair market price, Solanor believes the gaming side will keep internet café business afloat.
“Just like in Korea, they’ve been quite progressive. There are 20,000-strong café establishments which cater to gaming in South Korea,” he said.
