YOU Tel's cyber cafe plans

Citigroup-owned broadband service company YOU Telecom is evaluating options to establish a chain of cybercafés in non-metro cities.

The company hopes to benefit from the pent-up demand for cyber connectivity in the hinterland of the country, according to E.V.S. Chakravarthy, Chief Executive Officer of the company.

"YOU Telecom sees cybercafés as a great opportunity for broadband growth in Tier - 2 and 3 towns and is keen to enter this model. We are evaluating the scenario and will join the fray at an opportune time," Chakravarthy said. The company sees this move as an extension of its association with cyber cafes as bandwidth provider; YOU Telecom currently provides Internet bandwidth to about 70 cybercafé ventures in the country's non-metro cities.

According to the Telecom Regulatory Authority of India, YOU Telecom is the sixth largest telecom broadband player in India with over one lakh subscribers.

YOU Telecom is more likely to go in for the franchisee model for this new business.

The organised market for cybercafes in India is hardly eight percent of the overall pie and consists of players such as Sify and Zapak.

Chakravarthy did not specify the timeframe for starting the cybercafé business. "With growing real estate prices and drop in bandwidth rates, economics will decide on the timing of our entry," he said.

The demand for cybercafés in urban India has been dwindling largely because of high broadband penetration and soaring real estate costs in cities.

However, cybercafés have been sprouting in the non-metro cities largely due to low real estate costs, low PC penetration and various Government initiatives such as the Common Service Centre programme.