RP Internet café business in dire straits
By Alexander Villafania
INQ7.net
All is not well for owners of smaller Internet cafés, largely due to skyrocketing maintenance costs and illegal Internet cafes without proper business permits.
Internet Café Association of the Philippines (ICAP) Vice President Mario P. Muñoz said in an interview that there had been a significant number of closures of Internet cafes in the last four months as economic environments make it more difficult for owners to maintain their businesses.
ICAP, which was formed in 2004, already has about 1,100 members nationwide. Muñoz said that 200 of their members have already closed their shops
“Surprisingly, the extensive raids by the National Bureau of Investigation last year against Internet owners using illegal software weren’t the reasons why these companies closed down,” he observed. “It was because they were already losing money from high maintenance cost.”
The cost of electricity was an important reason, but implementation of the extended value added tax, putting a 12 percent surcharge on all services and purchases, also took its toll on the profits of smaller Internet cafés.
Muñoz added that the business permit fee for an Internet café has also increased from 8,000 pesos two years ago to 17,000 pesos last year.
Low quality computer parts shared the blame. Muñoz explained that some PC parts, particularly expensive video cards, had to be replaced every six to eight months just to accommodate new computer games.
“We used to maintain a computer for up to three years. Now you’ll have to replace a whole PC in just over a year,” Muñoz said.
The cost of software is another major factor in high maintenance cost. A company has to spend over 80,000 pesos to use licensed operating system for 20 computers.
Meanwhile illegal computer shops are undermining the business for legitimate Internet cafes. Most of illegal shops do not have business permits, are using pirated operating systems and personal DSL subscription plans instead of the Internet business packages.
“Whereas a legitimate computer shop has to pay 6,000 pesos per month for a business DSL subscription, illegal shops pay only 1,000 pesos,” Muñoz pointed out. There are already 7,000 legitimate Internet cafes in the country, with an additional estimated 2,000 illegal ones.
“The government should do something to curb the proliferation of illegal shops while helping legitimate ones to improve their business. It’s already hard enough for smaller shop owners to maintain their business and you have illegal shops that take away their business,” he stressed.
INQ7.net
All is not well for owners of smaller Internet cafés, largely due to skyrocketing maintenance costs and illegal Internet cafes without proper business permits.
Internet Café Association of the Philippines (ICAP) Vice President Mario P. Muñoz said in an interview that there had been a significant number of closures of Internet cafes in the last four months as economic environments make it more difficult for owners to maintain their businesses.
ICAP, which was formed in 2004, already has about 1,100 members nationwide. Muñoz said that 200 of their members have already closed their shops
“Surprisingly, the extensive raids by the National Bureau of Investigation last year against Internet owners using illegal software weren’t the reasons why these companies closed down,” he observed. “It was because they were already losing money from high maintenance cost.”
The cost of electricity was an important reason, but implementation of the extended value added tax, putting a 12 percent surcharge on all services and purchases, also took its toll on the profits of smaller Internet cafés.
Muñoz added that the business permit fee for an Internet café has also increased from 8,000 pesos two years ago to 17,000 pesos last year.
Low quality computer parts shared the blame. Muñoz explained that some PC parts, particularly expensive video cards, had to be replaced every six to eight months just to accommodate new computer games.
“We used to maintain a computer for up to three years. Now you’ll have to replace a whole PC in just over a year,” Muñoz said.
The cost of software is another major factor in high maintenance cost. A company has to spend over 80,000 pesos to use licensed operating system for 20 computers.
Meanwhile illegal computer shops are undermining the business for legitimate Internet cafes. Most of illegal shops do not have business permits, are using pirated operating systems and personal DSL subscription plans instead of the Internet business packages.
“Whereas a legitimate computer shop has to pay 6,000 pesos per month for a business DSL subscription, illegal shops pay only 1,000 pesos,” Muñoz pointed out. There are already 7,000 legitimate Internet cafes in the country, with an additional estimated 2,000 illegal ones.
“The government should do something to curb the proliferation of illegal shops while helping legitimate ones to improve their business. It’s already hard enough for smaller shop owners to maintain their business and you have illegal shops that take away their business,” he stressed.
posted by OlongapoCity Zambales at
9:21 PM
0 Comments:
Post a Comment
<< Home