Growth of cyber cafes declining sharply

NEW DELHI: The growth of cyber cafes, which are the largest source of Internet access in India, is declining sharply. According to a CII-IMRB Broadband report, the number of cyber cafes, which was growing at almost 60% in 2004 and 2005, has fallen to almost 20% in 2008.

There are 1,80,000 cyber cafes in the country. Large industry players attribute the decline to lack of subsidy and support provided by the government coupled with increased security concerns and harassment of cyber cafe owners.

Commenting on the issue, Sify president of consumer infrastructure Naresh Ajwani said, “We have also seen a drop in our conversion rates from non-branded cyber cafes into branded Sify I-way cafes.” Sify has around 3,000 I-way cafes, of which many have been conversions from non-branded cyber cafes.

Ridiculously, in some cities like Pune, to open a cyber cafe, one has to take permissions from a municipal health department, just because cyber has got a ‘cafe’ suffixed to it. (The literal meaning of a cafe is a place to have coffee and snacks). Moreover, across the country, the local police has to provide a no objection certificate in order to open a cyber cafe. Experts say that drastic decline of cyber cafes is due to harassment that owners face at the hands of the local police.

According to the CII-IMRB report, the rate of growth in cyber cafes was at its peak in the country at about 85% in 2002. Though it was largely attributable to a small base of about 50,000 cafes in 2003, the growth was still hovering around 60% till 2004. The cyber cafe industry grew at about 57% in 2004. But by 2006 the growth fell to about 20% and it has till now failed to pick up steam.

Internet Service Providers Association of India (ISPAI) president Rajesh Charria says, “The decline in growth has been due to the extra-strict laws of maintaining a log of all sites visited by a customer alongwith a copy of his or her id proof. While there should be no compromise with security, the government should make a central law for cafes and remove local police interference. The government’s laws are discriminatory towards cyber cafes vis-a-vis PCOs.”

Meanwhile, cafe owners say that they have little control over the type of emails sent by their customers. There is also no support provided by the government in educating customers on internet usage. “We can provide free internet awareness programmes in lean hours to citizens in rural or urban areas provided we get a subsidy from the government,” adds Mr Ajwani of Sify.

According to another report by IAMAI (Internet and Mobile Association of India), out of the 46 million web users, college and school students account for maximum use of web in the country at 21%. Students are also the maximum users of web in the country through cyber cafes given the high cost of PCs. The internet users have crossed 52 million in 2007-08, according to MAIT.

Not surprisingly, cyber cafes emerge as the largest access point for internet access at 36% followed by home (30%) and office (25%). But, lackadaisical attitude from the government towards growth of cyber cafes is impeding the broadband growth.