Nigerian cafes are not licensed, says operator

Only 5% of cybercafes in Nigeria are registered by the Nigerian Communications Commission (NCC) strengthening public perception that the regulatory authority has little control in the largely dicey last mile sub-sector for Internet access.

There are over 4,500 cafes in Nigeria as at last year according to the Association of Telecentres and Cybercafes Owners. The association is an
umbrella body for operators in the sub-sector and is headed by Lai Omotola, chief operating officer of Next Technologies Limited [Full interview to run in Nov/Dec edition of IT Edge magazine]

Of this figure, less than 200 are in the NCC’s register though the laws compel all operators to be licensed by the regulatory body. “Many operators do not know that they supposed to be licensed by the NCC,” said Omotola adding that the NCC had tolerated it to allow faster penetration
of Internet.

But no much penetration has happened in spite of this. The mortality rate for cybercafes is extremely high and in the last one year over 500 cafes have gone under in Lagos alone where close to 85 percent of cafe population exists.

A mix of factors is responsible for this, said Omotola. They include the costly nature of bandwidth, poor management or understanding of the business and absence of support infrastructures.

Besides, patronage of cafes have dwindled so much in areas like Lagos where telephone operators offer bundled voice and data services to further reduce cafes’ share of an already shrinking market. Hundreds of individuals and start-ups, which usually constitute a good percentage of
the patronage at cafes, would rather stay home or at their offices to do their business with the added advantage of privacy.

About N5 million is needed to set up a cafe of about 20 computers. But this is just the start of a long journey. It costs a cafe about N150,000 monthly to subscribe for bandwidth from a wholesaler in US or
Israel.

It takes less than six months for a café to realise that its operating cost OPEX is higher than its revenue on investment (ROI), said Omotola who is planning to hold an awareness campaign on the problem.

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