Internet cafes complain of gloomier future amid hikes
Internet cafes complain of gloomier future amid hikes
Damar Harsanto, The Jakarta Post, Jakarta
The recent increase in utility tariffs would deal a serious blow
to the already-cash strapped Internet cafe business, said some
operators, who expressed worries that protracted pressure on the
business would result in its closure.
"Our profit margin is shrinking, and we are losing more than
we are gaining, and quite often at that... This will lead to
closure unless we have a back-up plan," said Octavianto Ardi of
Warnet 3 Cahaya.net in Matraman, Central Jakarta.
Octavianto said his business was in the doldrums. During the
last couple of months, it has continued to suffer a deficit of up
to Rp 200,000 a month.
"Fortunately, we also run printing and scanning services,
which may help ease the pressure from the Internet cafe
business," he told The Jakarta Post on Monday.
Octavianto said that it would be impossible to shift the fee
burden to customers, as many of them have already complained
about his connection fee of Rp 7,000 an hour.
"Instead, we are planning to provide new services, like
renting out cyber games," he said.
However, the majority of Internet cafe owners do not have such
a back-up plan, especially due to obvious budget constraints.
"Four Internet cafes in this area have been forced to close
amid prolonged pressure on the business. We're the only
survivor," said Waluyo, who runs @kas.net Internet cafe in Galur
Sari, East Jakarta.
He said the Internet cafes in his area were forced to close
down last year following state-owned telecommunications firm PT
Telkom's decision to raise phone tariffs in February 2002.
Waluyo recalled that the increase in the electricity tariff
last November had burdened his cafe with an additional Rp 100,000
on top of the average Rp 300,000 he paid in previous months,
bringing his monthly bills to approximately Rp 400,000.
"The new increase in the electricity tariff, coupled with
another increase in phone rates, will balloon operational costs
so that it will not be affordable, while we make small gains due
to the decrease in customers," Waluyo said.
He said the hikes would further slash the cafe's income of
between Rp 3.5 million and Rp 4 million.
Waluyo said that his Internet cafe was frequented by dozens of
customers a day, but only 10 to 15 people logged on for more than
three hours each. He charges customers Rp 6,000 for each hour
they spend on the Net, while last year, the hourly charge was Rp
5,400.
Telkom has increased both its local and monthly connection
fees by an average of 15 percent, but observers have said that
the increase actually hovers over the 30 percent mark.
In addition, the government has announced an 24-percent
increase in electricity tariffs for the whole year, and has
removed fuel subsidies so that fuel prices now stand at 100
percent of the market price.
According to a survey conducted by state-run PT Indosat, there
are 800 small call centers (locally known as wartel) in Jakarta,
some of which also serve as Internet cafes. Many believe,
however, that the actual figure runs into the thousands, greatly
exceeding this reported figure.
There are around 3 million Internet users in Indonesia with
2.5 million users frequenting Internet cafes.
The Internet Cafe Owners' Association (Awari) predicted that
its member business would fall by 50 percent if no new product
came along to reenergize the business.
Internet cafe operators have long complained about poor
telephone services, which limits bandwidth capacity and prevents
expansion so as to offset the increase in phone charges. Such
poor service also makes it unattractive for customers to use the
Internet.
Damar Harsanto, The Jakarta Post, Jakarta
The recent increase in utility tariffs would deal a serious blow
to the already-cash strapped Internet cafe business, said some
operators, who expressed worries that protracted pressure on the
business would result in its closure.
"Our profit margin is shrinking, and we are losing more than
we are gaining, and quite often at that... This will lead to
closure unless we have a back-up plan," said Octavianto Ardi of
Warnet 3 Cahaya.net in Matraman, Central Jakarta.
Octavianto said his business was in the doldrums. During the
last couple of months, it has continued to suffer a deficit of up
to Rp 200,000 a month.
"Fortunately, we also run printing and scanning services,
which may help ease the pressure from the Internet cafe
business," he told The Jakarta Post on Monday.
Octavianto said that it would be impossible to shift the fee
burden to customers, as many of them have already complained
about his connection fee of Rp 7,000 an hour.
"Instead, we are planning to provide new services, like
renting out cyber games," he said.
However, the majority of Internet cafe owners do not have such
a back-up plan, especially due to obvious budget constraints.
"Four Internet cafes in this area have been forced to close
amid prolonged pressure on the business. We're the only
survivor," said Waluyo, who runs @kas.net Internet cafe in Galur
Sari, East Jakarta.
He said the Internet cafes in his area were forced to close
down last year following state-owned telecommunications firm PT
Telkom's decision to raise phone tariffs in February 2002.
Waluyo recalled that the increase in the electricity tariff
last November had burdened his cafe with an additional Rp 100,000
on top of the average Rp 300,000 he paid in previous months,
bringing his monthly bills to approximately Rp 400,000.
"The new increase in the electricity tariff, coupled with
another increase in phone rates, will balloon operational costs
so that it will not be affordable, while we make small gains due
to the decrease in customers," Waluyo said.
He said the hikes would further slash the cafe's income of
between Rp 3.5 million and Rp 4 million.
Waluyo said that his Internet cafe was frequented by dozens of
customers a day, but only 10 to 15 people logged on for more than
three hours each. He charges customers Rp 6,000 for each hour
they spend on the Net, while last year, the hourly charge was Rp
5,400.
Telkom has increased both its local and monthly connection
fees by an average of 15 percent, but observers have said that
the increase actually hovers over the 30 percent mark.
In addition, the government has announced an 24-percent
increase in electricity tariffs for the whole year, and has
removed fuel subsidies so that fuel prices now stand at 100
percent of the market price.
According to a survey conducted by state-run PT Indosat, there
are 800 small call centers (locally known as wartel) in Jakarta,
some of which also serve as Internet cafes. Many believe,
however, that the actual figure runs into the thousands, greatly
exceeding this reported figure.
There are around 3 million Internet users in Indonesia with
2.5 million users frequenting Internet cafes.
The Internet Cafe Owners' Association (Awari) predicted that
its member business would fall by 50 percent if no new product
came along to reenergize the business.
Internet cafe operators have long complained about poor
telephone services, which limits bandwidth capacity and prevents
expansion so as to offset the increase in phone charges. Such
poor service also makes it unattractive for customers to use the
Internet.