Pondering the sustainability of the cyber cafe industry and its future

Business is booming, Kilifi, Kenya 11th October 2011

Jomo, who runs a traditional cyber cafe in an office building near Mombasa’s busy port district, gave us a well framed and articulate argument on the challenge of running a sustainable business given the costs involved.  His key point was that the internet providers, particularly the mobile operators now actively competing with conventional ISPs, were pricing their products to suit the end users rather than the ‘channel distributors’ of the service i.e. cyber cafes. They leave little or no margins for cyber cafes and his own business had shown a 25% decline in the past three years with no end in sight for the steady downward trend.

On one hand, low cost access to voice and data has been an undeniable boon to the majority of Kenyans who can now call a friend or relative in the US or India for just 3 Ksh (USD 3 cents) a minute from their regular prepaid account.  Mobile broadband modems average 3000 Ksh and are a simple addition to small offices able to pick up refurbished desk top PCs for as little as USD 100.  In Mombasa city and its environs, this affordable combination has made the biggest impact on the neighbourhood internet cafe – be it in a lower income residential/market area or in the Central Business District.

But on the other, as we drove outwards from the city into the smaller towns and markets, where the cyber business is still booming if not showing a growth trend in some places, listening to the stories around the challenge and cost of maintaining sufficient internet access for more than one single personal computer, I wondered if this pricing trend is necessarily a good thing in the grand scheme of things.

I’m not talking about increasing the cost of access to data but whether there shouldn’t be a seperate pricing plan for the cyber cafe industry as opposed to offering them the same data bundles and packages as any other SOHO customer.  And why?

Right now there’s growth as increasing numbers of people go online at work or at home, with mobile phones or employer provided laptops and the future looks rosy for the industry as well as those who watch internet penetration in developing nations. But there will come a point after which there will be people for whom personal ownership or such employment will not be possible, nor make sense. For example, there are beach boys in Malindi who have been gifted with laptops by their tourist friends but continue coming to the cyber for their internet needs. Which beach shack is set up to support computer usage and does that investment in a mobile broadband modem actually make sense when so much assistance and support is required to navigate one’s way through the complexity that is the modern day OS and its software?

Once we sweep aside the veil of hordes of students going on Facebook with their phones, we see the need for egovernment services such as the KRA or even the convenience of booking bus tickets online. The cyber cafe’s role in enabling and supporting the accessibility to the world wide web, especially among the less educated or well off, is critical if these services are to reach everyone for whom they meant.  If the cost and pricing of the services and devices are increasing customer usage and growth in the now, they imply a death knell for cyber cafes struggling to make ends meet.

Yet the cyber is a much needed element of the value chain – they are the informal support system for all this technology. Nearly all mentioned that daily customers would come in seeking assistance in setting up the internet on their mobile phones. Or needing help in setting up their Facebook accounts. This mobile revolution we talk about isn’t happening by itself, but it might end up killing the midwife.

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