Venture to launch 'third-generation' Internet cafés

Venture to launch

‘third-generation’ Internet cafés

By Dennis D. Estopace

Reporter

PUBLICLY-LISTED IPVG Corp., which operates an online gaming platform, embarked on a joint venture with a Korean investor, which intends to introduce “the second generation of Internet cafés” in the Philippines. According to Dong Hun Lee, chairman of Sabiclub.com, the venture’s Korean partner, the newly-created company will not only establish up to 200 Internet cafés which run 24 hours a day, the same shops will also sell food, rent out and/or show videos. Lee said that the third-generation Internet cafés now offer customers online gaming services and lease office space that “call-center agents can use.” “We plan to make a very big flagship and are putting up our main hub in Makati City,” Lee told reporters on Friday. He added that Sabiclub.com Corp., a closely-held, locally-registered company has an “ongoing exploratory arrangement” with IP Converge Data Center Inc., an IPVG subsidiary, to compete in the country’s burgeoning Internet coffee shop business.  Although he said that the venture may even acquire an existing café in the Philippines’ premier business district, Lee failed to identify specific locations. Most Internet cafés in the Philippines are still within the first generation, Lee said, “where you put all personal computers and, that’s it.” Although Sabiclub’s first business venture falls within the second-generation category of net cafés, it caters exclusively to Koreans and foreigners. The company owns seven Internet café shops under the Station 168 brand. Its partnership with IPVG is for the i-Hooked brand, where two shops are currently being operated. Lee said that IPVG’s subsidiary provides the online content and the 4-Megabyte per second bandwidth connection to the two i-Hooked shops. IPVG, he said, has neither infused equity into the partnership nor acquired a franchise for its own Internet café. The agreement, Lee explained, is being led first by Sabiclub, which sells a franchise for between P5 million to P7 million. Early this month, the second two-story shop Sabiclub was launched. Amounting to P7.8 million, the shop covers 270 square meters, rents out 25 computers, and features a dining area. Lee said that the venture is currently negotiating with two possible franchisees which would open this month. The venture promises that the franchisees’ investments will be recouped in two years and a technological upgrade equivalent to six months income. Sabiclub has a paid-up capital of P5 million and is 89-percent owned by Koreans.

 

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