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.