News Column

How Cyber Cafes Bowed to Smartphones, Internet Charges

August 18, 2014

Our correspondents Olamide Bakare (Lagos), Yemi Akintomide (Akure), Patience Ogbodo-Iwuagwu (Bauchi), Oladele Ogunsola (Ibadan), Okey Maduforo (Enugu), Isaac Olamikan (Benin), Emmanuel Arubi (Warri), Chibunma Ukwu (Abuja), who visited cyber cafes in states across the country have discovered that there has been steady decline in the fortunes of this once vibrant sector of the economy

Democracy in Nigeria, no doubt, has had its fair share of the good, the bad and of course, the ugly. But if there is anything that has been quite significant in the life of Nigeria's democracy and thus represents a milestone, it is the revolution in the Information Communication Technology (ICT), industry which was boosted by the democratic government of President Olusegun Obasanjo which gave approval to companies to operate the GSM mobile telephony and internet services.

Prior to the arrival of cyber cafes, NITEL and post offices were the major means of communication. Save for some few Nigerians, particularly the elite, who had telephone, which the then Minister of Communications and now Senate President, David Mark, once said was not meant for the poor, the most common means of communication among Nigerians was mainly through sending letters, documents and parcels by post.

But the arrival of internet changed all that. It didn't take long for cyber cafÉ business to spread like a virus to all nooks and crannies of major Nigerian cities. It became a soothing relief to Nigerians thus ending the needless delays associated with mail delivery and epileptic telephone service which was as bad as electricity supply.

In the early years of the internet service in Nigeria, it was indeed, a new window of business opportunity for individuals and even corporate organisations. The business began to grow in leaps and bounds as many sprang forth in several localities. Many saw it as the new cash cow and invested in it. On the part of the consumers, it became a relief that put paid to the many worries associated with delay and in some cases, non delivery of mails and parcels. For both customers and cyber cafe owners, it was something worth rejoicing over.

But more than a decade after, the situation appears unpalatable for investors in the business as a result of the dwindling patronage from customers. While some have attributed the decline in fortune to the improvement in mobile phone technology, some are of the opinion that other factors such as the worsening power supply and harsh economic situation have contributed in large measure in the closure of many cyber cafes.

A visit to major part of Lagos metropolis and other parts of the country revealed that most cyber cafe owners have closed shop, thus attesting to the dwindling fortunes of the business.

A tour round Agbado Oke-Odo Local Development Area in Lagos State by our correspondent showed that no fewer than 20 cyber cafÉ operators have closed shop in the last two years. Some of those who still manage to remain in business have converted their cyber cafe offices to other business interests which include merchandising while others have since leased out their outlets for other concerns.

In a chat with a cyber cafÉ owner who ran the business before it was shut down, Wilson Gbenga, he explained that the revolution in the communication sector have had serious negative impact on the business.

According to Gbenga, "the emergence of smart phones has contributed to the declining fortune of cybercafÉ business in many ways. One can browse, send email, register online, receive emails, download music video, film and other materials on smart phones. All these come cheaper with data plans from network providers."

A retired civil servant who has been involved in the business in the last 10 years, Mr. Bodunde Ismail, said that the business generated much profit for him in the early years but not so anymore.

The advent of connectivity in mobile phones, he said has negatively affected cyber business.

Similarly, Mrs. Adesoye Anthonia who had been engaged in several areas of business before finally settling down for cyber cafÉ five years ago says it has been quite challenging running the business. According to her, the business would have closed down long ago but for the addition of other support services.

"If you take a look at what we spend alone as overhead cost on a daily basis, you will know that our survival in cyber cafÉ is due largely to other services that we offer. What we spend alone on fuel is huge to the extent that we find it hard recouping the investment on daily basis.

"As if that is not enough, the rising increase in tariff by internet service providers (ISPs) is one area that has remained disturbing for cyber cafÉ operators," she said.

Speaking on the tarrif charged by various ISPs now as compared to what obtained few years back Adesoye said the rate was becoming unbearable by the day.

Giving details of how she started using a CDMA, (Code Division Multiple Access) network, she stated, "At the beginning, we were using Starcomm and it was unlimited plan. Customers were really enjoying the service and this was quite rewarding for operators like me. But suddenly, things began to take a new turn for the company until we were told they are no more in business. We later switched to Multilinks. Thereafter, to Mobitel where we were paying N10, 000 for unlimited download and services. But not long after, the tariff plan changed to 10 gigabites at the same amount. When we could no longer cope, we switch to another network called Unwired. We paid N18, 500 in a month for 2MBPs. Later on, when we were not getting the desired service, we switch again to Swift where we paid N15,000 for 80 gigabite. But due to the fact that the tariff plan for Swift was high, we thought it wise to give another network a try. So we moved over to Spectranet but due to poor network, we had to go back to Swift. As I speak, the internet has been a serious drain on other business I am running. If things continue this way, I may have to abandon it."

Also speaking on what has been responsible for the decline, IT expert, Mr. Rasheed Olawale, stated that customers enjoy unlimited data plan which allow them to download seamlessly few years ago, the advancement in technology coupled with outrageous fees charged by governments have led to the shortfall in revenue for most of the business owners.

"Before now, streaming videos and downloading large files over a cell network that uses a large amount of data was the in thing. But immediately connectivity switched over to phones, people now began to show less interest in cyber cafÉ since they know the same task can be achieved using their phones."

Deji Aina, a young entrepreneur who has been in the business since 2011 lamented the shortfall in revenue but said that the experience garnered over the years has been of immense benefit in the sustenance of the business.

Sharing his experience, the budding entrepreneur said, "before now, I had managed about two cyber cafÉs for close to seven years before setting up my own. By so doing, I am aware of some of the challenges and how to meander through. The experience has really prepared me to weather the storm. But I am doing my bit to bring stability."

Although, Aina who is the owner of Neepheth Communication admitted that the improvement in mobile technology has taken its toll on cyber business, he however thinks epileptic power supply has done more damage to the business.

"The power situation in Nigeria has really not helped matter. When you look at the amount of money spent on diesel or petrol alone, you will realise that it takes a good chunk of the revenue generated. It is really killing the business and discouraging others from coming in.

While he agreed that the business was on the decline, he is of the view that some major tasks will still be undertaken using cybercafÉ.

"Apart from the CDMAs and other internet service providers like Swift, Spectranets, most telecom operators offering internet service cannot offer much. So, they still have to resort to visiting cyber cafÉ either through wireless service or using their computers. For example, if MTN gives you a thousand worth of internet, you get it exhausted within one or two days," he said. "With the advent of smartphones, I really don't see the survival of cyber cafÉ for so long. For us here, we are beginning to see that happen. That explains why we are trying to convert it to e-resource centre where you come to buy exam cards, get trained on networking and a lot of other services."

Another operator, Mr. IdowuTunde who owns Airteam International Cyber CafÉ in Iyana Ipaja area of Lagos State, expressed dissatisfaction with the turn of events as far as cyber cafe business is concerned. According to him, the business which used to be a cash cow for him when he started was beginning to experience huge loses causing serious drain to his purse. He stated that as things stand, he may consider the idea of closing down as he can no longer bear the situation. He lamented that the decline in business fortune has taken adverse effect on his family.

"Things have really changed. We are not getting customers as we used to get five years ago. Before now, I used to make an average of N10,000 a day but I find it extremely difficult now to make up to N2000 now. Things are getting worse by the day. Aside low patronage, the power supply is also another cause of concern. Since the inception, we have used up to 10 generating sets to run the business,"Tunde said.

An operator of a cyber cafÉ in Abuja, Mr. Innocent Abanka, lamented that the business has not been booming in recent times due to the rapid transformation through the Internet space in Nigeria.

This he said has made internet facilities available to individuals and organisations thereby affecting the existence of cyber cafe businesses.

Corroborating Abanka's view, the manager of an ICT firm, Mr. Divine Freeman, noted that most cyber cafes have gone down due to such challenges as lack of good patronage which he attributed this to smartphones.

"The emergence of Internet-powered mobile phones has been a source of blessing to all users of the Internet. Many believe that such internet devices such as mobile smartphones, I-pads, even modem are preferable means of accessing the Internet because of their portability, and as such have become preferable facility for browsing the internet. However, their advent has contributed tremendously to the declining fortunes of cyber cafes."

In his own view, a Lagos based legal practitioner Nonse Ogbe, believes that many cybercafÉs owners in Nigeria lack the business acumen needed to run a cybercafÉ in a professional manner.

"Although the emergence of Internet powered phones has posed a source of threat to the use of conventional computers in browsing, I strongly believe that most cybercafÉs wound up because their proprietors failed to embark on proactive line of actions that would have made resort to the use of Internet-powered mobile phones less fanciful.

"Many cyber owners failed to run their cafÉs alongside other allied services such as cyber studies, which will help attract people to their cafÉs. When cybercafÉ owners render other services that are in demand by the public, it will help create room for people to patronise such cybercafÉs. "Moreover, many people have had their personal details exposed to the public because of the dubious attitude of some cyber cafe operators who access the account of their clients. This problem is minimal in the use of mobile phones, as one can ensure that one's privacy, is to a great extent, guaranteed while surfing the net with a mobile phone," he said.

In Enugu, the capital of Enugu State, no cyber cafÉ has really closed shop but most of them now run below capacity as customers prefer to use their phones instead of visiting the business centres.

Saturday Independent checks showed that those that run a three to four room office complex now resort to a room or two due to the lull in business activities.

According to Miss Ifeoma Okoye, who works in one of the business centres along Independent Layout Enugu, "it is affecting us partially but not that we are closing down. The only thing is that some that started with two, three or four rooms offices now have two or one room and that is our problem now.

"But it will not lead to the closure of the business. Yes you can use your phone to access or check you mails but there are some files that you cannot open with your hand sets and you cannot just print out any document with your handsets. So you need to go to the cyber cafÉ".

Also speaking Mr. Linus Ezeh, who also runs a business centre in Enugu told us "there is no way those phones that we carry can put an end to the cyber cafÉ business at all. Most of these forms that people fill for employment or examination cannot be easily done with your phone. Even you that have a newspaper company have it closed down as a result of effect of internet? Even when the phones were introduced, the Nigerian post office did not close and they did not stop work. People still use private mail bags and private office boxes.

"So you see the cyber cafÉ business cannot die due to the use of internet phones."

Cybercafe was a thriving business across Ondo State about eight years ago, as both old and upcoming businessmen and women rushed to own cybercafes at every nook and cranny of the state.

Running a cybercafe then was one of the most lucrative business.

Sharing his experience during the booming days of cyber- cafe business, a former operator turned magazine publisher, Akin Abayomi, said his cyber- cafe at Oyemekun Road, in the heart of Akure, the Ondo State capital, was one of the first in the city in 2006.

Abayomi, who owned Mosac Cybercafe then, said the business was very lucrative and yielded high returns on investment within a short period of time.

"I won't deceive you, my brother, it was the proceed from my cafe operation then that I set-up this publishing outfit because the money was coming in thousands then, on daily basis.

"We made so much money from ticketing, printing documents and e-mails and even selling refreshments to customers who at many occasions, spent the night browsing till day break, Abayomi stated.

In Akure alone, one could count over 100 such cafes across the city between 2004 to 2010 when operators concentrated so much in setting up cafes in every streets and in every available shop in areas such as Federal University of Technology (FUTA), Akure, Federal College of Agriculture, Akure, Adekunle Ajasin University, (AAUA), Akungba-Akoko and Adeyemi College of Education, (ACE), Ondo.

Journalists in the state were some of the regular customers at cafe then, struggling for space on available computer sets with all manner of people who spent several hours sitting in front of computer set browsing the net for different purposes.

However, with the advent of smartphones, the business of cybercafe operation came down to ground zero across the state, even in tertiary institutions' environment where it used to be huge business.

A cafe operator and owner of Reka Cafe at Adegbola area of Akure, Ajibola Ikuomola, said only very few people still operate cafe in the state as at today, stressing that the business is totally dead in the state.

Ikuomola attributed the decline in cafe business to the advent of new technology that allow owners of mobile phones to connect and browse directly from their phone sets.

"I know how many times you (pointing to this writer) used to visit this cafe in a day, with all your colleagues, who are newspapers' reporters in this state; but since when did you enter this office to send your reports? Likewise the other reporters.

"You can see that the whole place is deserted with no customer on seat. That's what we now face every day, and the little money we make, we use on fuelling generating set to power the computer sets and the server.

"These days, we make little or no profit, owing to poor patronage and cost of running the cafe. The mobile connectivity has really hit us so bad, only few of us who have no other business still operate cybercafe," Ikuomola stated.

In Ibadan, the Oyo State capital, the business has closed down.

In Mokola Roundabout for instance, no fewer than four within the same vicinity including Net-Connection, JJ Infinity, have closed shop down with the office spaces turned to other things.

All attempts to speak with the operators yielded no fruit as they were said to have moved on with their lives, venturing into other business.

At Agbowo Shopping Complex which used to be a beehive of activities for the operators of numerous cyber cafe as a result of its proximity to the University of Ibadan campus, the story was the same.

Cybercafe business has continue to witness low patronage in Bauchi Metropolisis as it now operate at far below capacity.

Checks by Saturday Independent revealed that low patronage of the business is unconnected to people's access to phone and I-pad with internet connection which they now use in browsing at home rather than going to cyber cafe to browse.

A visit to Connect Internet cafe, Dudu cafe and Cyber mart Cafe in Bauchi metropolisis showed that customers that usually patronise them have reduced drastically as the cafe that used to be full to the brim before now look scanty with only few people browsing.

Due to this low patronage some of the cybercafe in the state capital have been forced to close down shop.

An operator, Solomon Igwe, lamented poor patronage which has forced majority of the cafe management to close shop.

"As I am here now, I'm searching for another job because majority of people now prefer to browse with their phones rather than coming to cafe. Assuming it was when the business was booming, all the computers,will be occupied while other people will be outside waiting but look at it now, we only have two systems occupied out of 30 systems, which is too poor.

"Apart from the use of phone, insecurity is also affecting us, because before we used to run night browsing but due to the problem of insurgency, nobody comes around at night again and we cannot risk our lives staying here overnight so we now close by 7pm instead of staying till the following morning as we used to do before," he said.

For Owubu Amos, a cybercafÉ operator in Benin, the recent advancement in technology as it relates to GSM, computers and the likes has resulted in certain things which in the past were done commercially in cyber cafes are now being done using smartphones and androids.

People only go to the cafe now to scan documents which the phones cannot do. But when it comes to exchange of emails and all that, people don't normally come to cyber cafes. So, there is a drop in patronage.

"We're trying the much we could to bring back some of our customers although there is a limit to which we can do that by reducing prices. "We still have to ensure that we meet up with our expenses. Running a cyber cafe is quite expensive and that has led many people who are into the business to abandon it.

Most of us are still in business because of the recent wave of online registration for examinations, jobs etc. During such period there is massive patronage by candidates.

Blessing Igbinidu blamed the advancement in communication technology for drop in patronage of cyber cafes. "Now, most people can just stay at home and use their gadgets like android, note pads and smartphones to do whatever they want to do effortlessly and, even in some cases, cheaper." For Godwin Ifeanyi, "there is no doubt that the cyber cafe business has been affected as a result of the new trend whereby communication gadgets are now the in-thing viz smartphones, note pads, android phones and even cheaper and effective laptops. People now use their phones to browse, send mails."

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Source: AllAfrica

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