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"Bringing The Net To The Masses: Cybercafes In Latin America"
Madanmohan Rao (madanr@planetasia.com), reports on the Internet-cafe scene currently emerging in Colombia, Costa Rica and Ecuador.


Much of the success of the Internet as an information economy and as a new medium depends on affordable, near-universal access to the Net in countries across the globe. In emerging economies, numerous projects have been launched in this regard incorporating public Internet kiosks, cybercafes, community access centres, and multimedia communication booths.

For instance, WorldTel chairman Sam Pitroda recently signed a high-profile agreement worth $50 million with the Tamil Nadu government, to set up 1,000 Internet community centres with upto 20 terminals each, thus providing widespread Internet access as well as employment for upto 50,000 people. WorldTel first experimented with such concepts in Latin America, in countries like Peru and Mexico.

A sampling of some other such Latin American experiments - with cybercafes - should provide instructive for entrepreneurs and policymakers in other parts of the world, especially in the wake of recent liberalisations of the ISP marketplace.

From the Internik cybercafe in Argentina to the Internet Link Club in Andheri, Internet cafe-based access centres have been springing up across the world. According to two of the leading Internet cafe resources online -- the Cybercafe Search Engine (http://cybercaptive.com/) and the Internet Cafe Guide (http://www.netcafeguide.com) -- there are about 2,000 cybercafes in 110 countries.

Many of the cybercafes in Asia tend to be in hotels and vacation resorts. In Europe, the cafes are often targeted to students who want to do more surfing than they are allowed at their university, according to Britain's "Internet Magazine." In many emerging economies like Zimbabwe and Kenya, cybercafes are often the local people's only means of accessing the Internet.

Australia's National Office for the Information Economy is providing $11.5 million in grants for projects such as Internet access in South Australian libraries and a cybercafe in New South Wales. And in some Latin American countries, cybercafes are becoming a key part of the tourism and Web solutions industries.

The streets between Avenida Amazonas and Juan Leon Meron in Quito, Ecuador -- home to many tourist hotels and restaurants -- also host an astonishing density of Internet cafes: almost a dozen in a region of just a few blocks.

Many of these Internet cafes -- offering a mix of Internet access, coffee, snacks and even a book exchange -- are less than three months old, such as the Interactive Cafe on Fosch street. "We have seen almost 12,000 customers since we opened three months ago. About 90 per cent of the Internet users are foreign tourists, the rest are local Ecuadorians," says Paul Konz, manager of Interactive Cafe.

The Cafe has 14 computers connected to the Net via a leased 64 Kbps line which costs US$1,500 a month. "We hope to have as many as 20 computers next year," says Konz. He hopes to break even by the end of next year, a projected window also shared by the owners of some of the other Internet cafes, like Aaron Stern, proprietor of the PapayaNet cybercafe.

"We get upto 300 people a day, about 25 per cent of whom are locals," claims Stern. PapayaNet's services are advertised in local newspapers, tourism brochures, and at the airport in Quito

"In addition to freemail services like Hotmail, our customers are heavy users of IDT's popular Net2Phone service," says Stern.

The Internet telephony service in Ecuador can help cut costs of calling Europe from an average of two dollars a minute down to about 30 cents a minute. Unfortunately, this may not be a feasible offering in countries like India, where Internet telephony is banned.

Charges for Internet access in the cybercafes of Quito vary from 15,000 sucres to 20,000 sucres an hour (1USD =3D 6,750 sucres).

However, stiff competition from neighbouring cybercafes is forcing some of them to expand their services into franchised operations in other cities in Ecuador as well as other countries in Latin America; some are even beginning to offer Web solutions like Web site design and hosting.

Stern plans to extend his PapayaNet chain to Peru and Colombia. Oscar Imbaquingo, proprietor of InternetCafe, plans to set up cybercafes in the Ecuadorian cities of Cuenca and Guayaquil. He has just begun setting up Web sites for local companies, and has about 12 clients -- most of them tourist agencies.

Web solutions are also an integral part of the business model for Internet company AltesaNet (http://www.altesa.net), which runs a cybercafe called Monkey. "We get a steady stream of tourists and locals to the cybercafe, but our real target is the e-commerce market in Ecuador," says Rene Crespo, president of AltesaNet.

The company has designed and hosted Web sites for over 70 clients in Quito, and also manages the online promotion for events like a local beauty pageant. The cybercafe is used to demonstrate Web marketing techniques for prospective clients, and to conduct training classes. The cafe was also publicised at the recent Compu '98 national PC Expo in Quito.

Other Internet cafes in the neighbourhood - like PlanetaNet - offer membership programs with discounted fees for regular Internet users. "We also offer 10 to 15 per cent discounts for high school students. We may even open an art gallery to attract tourists," says Galo Fierro, proprietor of PlanetaNet.

Given the dependence of the Ecuadorian economy on tourism, it seems clear that cybercafes are going to play an important role in the tourism segment -- both for visiting tourists trying to communicate back home as well as tourism agencies hoping to learn more about the interests and preferences of tourists.

In contrast, just across the border in Colombia, cybercafes have not been doing so well in cities like Bogota. "The high costs of leased lines - US$2,500 for a 64 Kbps connection - have not made it easy for cybercafes to flourish. Many have now closed shop," says Christian Boehlke, business director for Web solutions company Axesnet (http://www.axesnet.com).

Further up north in San Jose, Costa Rica, Internet access centres are faring much better. A steady stream of Internet users visits the numerous photocopy shops doubling as Internet access centres, such as Internet Point near the University of Costa Rica. The handful of thriving cybercafes includes the InternetCafe with 50 computers, and the more modest CyberCafe, near Theatro Nacional, with 10 PCs.

"We charge about $4 an hour for Net access, and get about 50 people a day. We offer Web training sessions for local businesses for $15 an hour, and also publish Web sites," says Roger Pilon, CyberCafe proprietor.

His company has published tourism-oriented sites for local car rental services (http://www.carentals.com) and real estate companies (http://www.goisthmus.com). But what really sets his operation apart from the others is the ambitious search engine and directory service (http://www.searchcostarica.com) he has launched for Costa Rican Web sites. The service is currently in English, and will be expanded to include Spanish content.

'These new services are bound to increase traffic to my search site as well as to my CyberCafe," Pilon says. The CyberCafe is being promoted in local media and in tourism fairs in Europe.

Ernesto Rivera, an Internet columnist at the newspaper "La Republica," is optimistic about the prospects for cybercafes in Latin America. "Many of them offer good, cheap access to the Internet, and nurture local communities of Internet enthusiasts. The Net is very much in vogue among students, foreigners, businessmen and tourists -- and entrepreneurs with vision and luck are bound to succeed with cybercafe ventures," he concluded.
Dr. Madanmohan Rao (madanr@planetasia.com) is Principal Consultant at Bangalore-based Web publishing and consulting firm PlanetAsia. He was formerly the Communications Director at the United Nations Inter Press Service bureau in New York. Madan is also a journalist, and is currently the editor of "IndiaLine" (www.indialine.com - India's first daily Webzine about the Net). He is also on the board of editors of the magazines "Electronic Markets" (www.electronicmarkets.org - published from Switzerland) and "On The Internet" (published by the Internet Society -
www.isoc.org).

Madan is a frequent speaker on the international conference circuit, and has given talks and lectures on Internet-related issues in the U.S., Canada, Costa Rica, Ecuador, Colombia, Brazil, Italy, Vietnam, Japan, South Korea, Singapore, Hong Kong, Malaysia, India, Thailand, Indonesia, and Australia.

This article was originally posted to the Cybercom Cyber Community of India List. Dr. Rao and the moderators of that list have given their permission to republish it here.

 

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