Thursday, February 7, 2008 | MANILA, PHILIPPINES
News
Netopia expects recovery after shutdown of losing branches
THE OWNER of the country's largest chain of Internet cafés is expecting a modest recovery this year after shutting down a number of unprofitable shops, and is looking at expanding to the provinces by selling franchises.
George H. Tan, president of Digital Paradise, Inc. which operates the Netopia chain, said the company plans to open 20 more outlets in Palawan, Butuan, and Zamboanga. Netopia now has 175 outlets.
"[Our plan] is really expanding by franchising rather than [opening] company-owned stores. We want to consolidate our gains made in 2007... We are looking at those regions we feel are under-represented. We don't have franchisees there. Sayang ang area. It is a big market with highly populated provinces. Zamboanga is quite a big," he said.
A Netopia franchise costs P150,000 to P225,000.
Philippine Long Distance Telephone Co., through wholly owned subsidiary ePLDT, controls 75% of Digital Paradise. ePLDT is the corporate vehicle of PLDT's information and communication technology assets and investments.
Mr. Tan said Digital Paradise will post a turnaround this year after incurring a P29-million net loss in 2007. The company is looking at a "modest growth" of 5% to 10% in revenues from P330 million in 2006.
"We have [shut down] unprofitable locations in the past. This year, we expect the remaining stores to be profitable. That should lift our bottom line, so to speak. We have closed 20 outlets over the last two years," he added.
Mr. Tan said operating an Internet café is profitable "if you can develop your customers and as long as you don't price yourselves too low."
"We have to price at a premium to market because we follow the rules. We have legitimate software, we pay the right taxes. We don't underdeclare. We pay the right wages including overtime. Those are added cost to the business, so we have to recover [them]," he added.
Asked whether the company has plans to go public, Mr. Tan said Digital Paradise must still improve its profitability. "When we are reasonably certain that our profitability is sustainable, that will be the best time," he said.
Yesterday, Netopia inked a deal with Computer Assisted Learning (CAL) to make online training affordable and accessible to the general public through a "Netopia learning hub."
Regina Maria S. Ozoa, CAL senior product manager for online learning, said the partnership will "find a solution to the perennial problems stifling training and education in the Philippines, [and] at the same time improve the productivity of the work force."
CAL is expanding its reach by teaming up with Netopia to launch CALnook, a portal of various certification training courses such as the E-Commerce Consultant, Cisco, CompTIA A+, Network +, and the European Computer Driving License, among others.
"CALnook is a revolutionary training tool that enables company staff to improve their knowledge and skills without classroom training. It is simple and quick. [One can simply log on] to the Internet by username and password and [take] a training course online. The training is accessible 24 hours a day from anywhere to anyone with access to the Internet," Ms. Ozoa added said.
CAL operates computer schools for children and adult beginners, with a network of more than 50 centers in Brunei, India, Indonesia, Malaysia, the Maldives, Nepal, Nigeria, Singapore, Thailand and the Philippines. — Ruby Anne M. Rubio
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