About ten years ago, cybercafe business was highly profitable. The owners were virtually minting money. Now the story is different. Cybercafe can hardly make ends meet. Many businesses have closed shop because of huge debts. Those still in business are merely existing. Lucas Ajanaku reports
When he left Obafemi Awolowo University (OAU), Ile-Ife, about 10 years ago, Kayode Adeyeye had made up his mind not to seek a white collar job. He took this step because he had seen people who, after leaving school became ‘professional applicants.’
To achieve his dream, Adeyeye mobilised funds from relatives and friends to set up a cybercafé in his neighbourhood in Agbado-Ijaye, a Lagos suburb.
“I did not want to be a liability after graduating. I raised about N1.5 million and ploughed it into cybercafe business. I got 10 personal computers (PCs), rented a warehouse, bought an electricity generating set, got some furniture in place and started business,” he said.
According to him, at the beginning, business was good; money was coming in from people who came to browse the Internet. An hour attracted about N200. He had problems coping with the huge customer traffic. Since necessity is the mother of invention, his wife introduced snacks and soft drinks and the business flourished. That was then.
Today, the story has changed. One hour browsing time has come down to N100.
At Karimu Laka Street, Egbeda, another Lagos suburb, a large building used to house DS Cybercafé and Computer Training Centre. Five years ago, the building was a beehive as men, women, old and young, thronged the place to browse and get computer education. He combined the business with Internet calls. His peak period was during the American Diversity Lottery programme. But the story has since changed as the firm has closed shop.
The Emesck Solutions Cybercafe in Abule Odu, also a Lagos suburb, has also been deserted. The Client Service Executive, Yetunde Odukoya, a part time student of Wolex Polytechnic, said as at 8.30 am, she had not attended to any customer.
“Before the advent of Blackberry and other smartphones, business was good. Now, with a mobile phone of about N2,500, one can take and send picture, chat, check email and do other things on the Internet. What has compounded the woes of the business is that most of the mobile operators give 10 megabytes (MBs) of data to their customers on purchase of N100 worth of airtime. This will last me for two weeks,” she said.
She added that power supply and regular raid on cafes by security agencies have contributed to the near-demise of the business. The gradual migration of examinations and recruitment into the armed forces in the country to the electronic platform that ought to have boosted the income of operators is not doing so. “Tutorial centres and private schools buy laptop, biometric data capturing machine, printers and other things needed to register candidates online,” she added.
According to a report, in 2003, the country had over 15,000 cyber cafes, with over 10,000 of them in Lagos State alone. At the twilight of 2007, this figure paled into insignificance to just about 1,002. Today, it is estimated that there are no fewer than 2,000 flourishing cybercafés in the country.
To set up a cybercafé, one would require about N2.5 million for Internet connectivity, N150,000 monthly subscription fee; payment for rent, computers and other infrastructure that would make the place congenial for business transaction. An average cybercafé would need between 20 and 30 computers and other accompaniments, such as printers, scanners and generators. An independent Internet group in Britain revealed that Internet service providers (ISPs) in Africa lose over $400 million yearly for pairing of local traffic in exchange and international bandwidth provision. This colossal loss is incurred because most African countries do not have Internet exchange point (IXP) where ISPs can interconnect and share local traffic.
Adeyeye recalled that he paid N450,000 to DPC to acquire its modem alone and another N30,000 monthly subscription fee. “How much you pay as subscription is a function of the number of computers you intend to use. When I was in business, I used only 10 computers and paid N450,000 and N30,000 monthly subscription fee,” he said.
Like Miss Odukoya, he said the undulating power supply by the Power Holding Company of Nigeria (PHCN), constant harassment and extortion from security men, emergence of the Global System for Mobile Communication (GSM) and private telephone operators (PTOs) offering Internet service in their bouquets and the ear of unified licences have contributed to the near-moribund state the business in the country.
Though the cost of browsing has gone down drastically from between N150 and N200 per hour to about N120 per hour, administrative cost continue to rise. Rent is reviewed yearly while the pump price of petrol underwent adjustments for more than a dozen times under former President Olusegun Obasanjo administration. Today, automotive gas oil (AGO) or diesel goes for N150 per litre in the Lagos area while petrol is N97 per litre.
Adeyeye said: “You don’t get power supply from PHCN but they never stop bringing bills.” For his 40 kva generator, which runs on diesel, he spends N9,000 while the other two that use petrol would accommodate about 15 litres, costing N1,455; this lasts for only six hours before. The problem is that the generators pack up no sooner had they been bought. “I bought that generator for N80,000; used it for only one month and it packed up,” he lamented. His four generators have parked up, adding that he used them for only three months.
Even when the generators work, there are always fluctuations in the signal of ISPs. Thus, for one week, the signal strength may be as low as 25 per cent. When this happens as it so often does, it is double jeopardy.
The sudden surge in cyber crimes in the country did not help matters. The Managing Director, Brand Definitions, Richard Afolalu, said the level of cyber crime in the country has made law enforcement agents to see anyone browsing in a cybercafé as a fraudster. And contrary to the legal dictum of being presumed innocent until proven otherwise by a court, one is subjected to humiliation by barely literate, but perpetually inebriated policemen.
“If you are unlucky to be arrested at a cybercafé or attacked by armed gangs who dispossess you of your cash and valuables, would you go there again? So, people who can afford modems and pay for data stay at home and do whatever they want to do,” he said.
Cybercafés were real haven for young cyber criminals.By special arrangements, these criminals pay their way to have night access to the cafes where they send scam mails. “Whenever you see any cybercafé operating overnight browsing, it is with an intention to defraud. These boys, called Yahoo Boys, pay them to use the facility,” a security expert said on condition of anonymity.
But an operator denied this, saying those with criminal intentions do it within the confines of their bedrooms. Though this brings more cash to mobile operators, it also attract international odium to the nation. E-commerce and transaction have remained low in Africa because of Internet fraud. In 2005, the Federal Bureau of Investigation (FBI), United States and the Economic and Financial Crimes Commission (EFCC) carried out an operation that led to the seizure of goods worth N319 million in Lagos alone while the EFCC made seized over $1 billion.
Some years ago, officials of the EFCC and Association of Telecoms Companies of Nigeria (ATCON) agreed to discontinue overnight browsing. Besides, they were to run their services on membership instead of the pay-as-you-go format that is dominant in the country.
The intervention of the EFCC was as a result of the enactment of the Advance Fee Fraud and other Offences Act 2006, signed into law on June 5, 2006 by Chief Obasanjo which transferred the policing of cyber crime to telecoms operators and also empowered the EFCC to enforce provisions of the act.
Even with these challenges, the proprietor of Emesck Solutions who simply identified himself as Emeka, said hope is not lost. “Not many people use hand held devices. Students come in and do research. Turnover may be small, cybercafes will continue to fill the gap,” he said on telephone.
