Friday, February 1, 2019

The Disruption in the Internet Café Industry

Posted By: The Mail Man - Friday, February 01, 2019

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The Internet Cafe Industry at its peak.


The continued march of technology affects technology itself and technology industry sectors. It has been noted for some time that many internet cafés have already closed down and this is not only true in malls. In each town or locality, the once ubiquitous internet cafes have declined significantly in number.

This has been brought about by the surge of new technology and the upgrading of existing technology.

The internet café industry started in the early 2000s and have grown geometrically for the next half-decade. 

Case in point is Netopia. Netopia  was one of the early exponents of internet cafes in the country. At its peak in 2006, Netopia had 180 branches nationwide and they are not only found in malls or commercial centers. They were also present along the main roads of many cities and towns.

This was brought about by the change in work habits and work demands. It replaced the traditional office where internet, computers, and printers were available. In fact, it was a nascent “telecommuting” system for many who work. Reports and other needed office communications need not be made from the office but from another site in the country. It provided Off-Premise work-related accomplishments. Also, these internet cafés became the venue for entertainment and communications by many Filipinos.

Video Calls to members of the family became common I these internet cafes and also network gaming became prevalent for many of the youth.

But technology disrupted this industry sector. Smartphones became common and cheaper with internet connectivity that was relatively fast for the requirements. The youth now play e-games among themselves with their smartphones.

Internet connection at home was made easier because telcos competed for the market and so there was no more reason to leave home for a great number of internet café habitués.

As mentioned above, Netopia had at its peak 180 branches in 2006. As of the 4th quarter of 2018, it was down to only 14.

Recently, IP E-Game Ventures Inc. disclosed to the Philippine Stock Exchange that it was selling its 48.38-percent stake in Digital Paradise Inc., operator of Netopia-branded internet cafes because “In the last few years, DPI’s internet business has been in a state of steady decline."

This is the result of Disruptions caused by the continued evolution of technology. The smartphone as long as it has internet connectivity has become the office of many Filipinos.   





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