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Sify Prepares For Decline Of Cybercafes With VAS; $3.23 Million Loss

The transformation of Sify into an enterprise-only business doesn't appear to be too far away. The numbers dont lie: Sify reported revenues of $3.09 million for Q1-11, less than 1/10th of its enterprise revenues of $32.52 million for the quarter, and 7.9% of total revenues of $38.63 million. Consumer business revenues business declined 44% in the first quarter of the 2010-11 fiscal, in comparison with the same quarter last fiscal year, when it reported revenues of $5.54 million. At the same time, the growth in the companys enterprise business has been significant at 19.5%. Overall revenues have grown 9.5%. Nevertheless, the company has given itself 12 months for the consumer business to become profitable. The traditional franchisee cyber cafe model is ramping down according to the company, which has resulted in an investment in a services based model, and look beyond its own franchisees (and reduce CAPEX). Company executives said on the conference call that with the growth of home and office broadband connectivity, the need for cybercafes has come down. Added to that, the pressure of an increase in real estate costs, wages and electricity. In what appears to be a veiled hint that it is rolling back its e-ports strategy (single computer kiosts), execs said that "the way Sify would have overcome this, is by expanding cafes to more locations by expanding the network, but that is not our model." I suppose they meant that this is not their model anymore. What About Sify's Own Home Broadband Business?…

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

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