Operational problems and keener competition caused by the convergence of technologies have shut down more than 50 percent of the country�s cyber cafes.
Industry watchers say even more will be forced to think up new survival strategies or close down within weeks.
The Association of Cyber Caf� Operators� sources said as of 2003, there were about 10,000 cyber cafes in the country.
The causes of the woes of the operators include the increasingly cheaper and innovative bundled Internet packages offered by fixed and mobile telephone companies as well as the growing array of fast and cheap home and small office Internet packages being offered directly by Internet Service Providers (ISPs).
Other factors are the high cost of Internet bandwidth in the country, unstable power suppy and police raids on cyber cafes, occasioned by the high incidence of advance fee fraud, otherwise known as �419�. These and other factors add up to take the wind out of the sails of the cyber caf� business.
Lai Omotola, past president of the association, in an exclusive interview with Business Day, said: “The major problems of cyber cafes is that the telcos (telephone companies) are bundling Internet access with their services, which is quite legal.
“Some of them offer plug-and-play Internet for up to four computers for their customers in their homes and this can come far cheaper than what the cyber cafes charge and with greater convenience.
“Then, there is the problem of inadequate power supply from the national grid and the high cost of alternative power. As I speak to you, the cost of diesel in some parts of Lagos is N145 per litre.
“Two years ago, there were about 3,000 cyber cafes in Lagos alone. Now, there are less than 500.”
Omotola said the way out of their travails “is for the cyber cafes to restrategise and re-define their business models.”
He proffered that cyber cafes could for instance enter into franchise agreements to offer support services to undertakings such as the e-passport scheme of the Nigerian Immigration Service and e-ticketing for the airlines and travel agencies.
Other industry watchers said cyber cafes could likewise enter into agreement to serve as accredited service and examination points for distance learning schemes among others.
At the Passport Office in Festac Town, Lagos, cyber cafes are springing up to take advantage of the recent e-passport initiative of the Nigerian Immigration Service. They help applicants navigate the electronic passport processes for a fee and that is almost the only thing they do. Applicants wishing to renew their passports are charged N500 after the official immigration department charges.
However, not all cyber caf� operators are thinking this way. One cyber caf� operator in Victoria Island, Lagos said she was thinking of converting her office into a restaurant.
Lanre Ajayi, president, Nigeria Internet Group (NIG), also told Business Day that the problems of the cyber cafes included high bandwidth costs, inadequate electricity supply from the national grid and the high cost of providing alternative power, particularly the rising cost of diesel for generators.
Said Ajayi: “The cyber cafes are dying because they are not getting reasonable margins on their investments. If cost is higher than revenue, then businesses will die.
“The costs of Internet bandwidth and electricity are very high and revenue is fixed because consumers are not willing to pay higher than N70 per hour for Internet access.”