"Currently we're being killed here by stiff competition and the city ordinance," said Patrick John Ricafort, assistant vice president of business development for Digital Paradise Inc, operator of Netopia, while visiting one of the company's Bangkok outlets with Inq7.net, an online news site. "Sales would have been better if I had a significant number of gamers in the Internet cafe."

After investing about 20 million Philippine pesos (Bt15.2 million) since 2004, Netopia has struggled to become a known brand in Thailand, where Internet cafes are common. Even after the company tried making inroads by charging a mere Bt20 per hour, it is now trying to devise new strategies for attracting more Thais to its outlets, which are mostly in malls.

Noting that the company is still "bleeding," Ricafort said Netopia had had to start from scratch when it entered Thailand.

"We're not known here, so we're trying to make a name here," Ricafort said.

Netopia has already shuttered its first branch at MBK mall, but it has opened three new branches at other malls in Bangkok, one of them near a large school.

The latest challenge to Netopia's business is the passage of a city ordinance in November 2005 barring students from Internet cafes before 3.30pm.

Bangkok-based game-publisher Asiasoft Corp Co was among those also badly hit by the city ordinance, resulting in fewer Internet gamers hitting the malls, according to Ricafort.

Web games are a big industry. Just a few floors above the Netopia branch in the Mall Ramkhamhaeng III at certain hours close to a hundred kids jam in to play PC and console games at Bt10 to Bt20 an hour.

For this reason, Ricafort said, Netopia will soon make its Internet cafe chain "more friendly" to gamers by increasing its bandwidth and computer-hardware specs. He said the biggest game in Thailand today was Pangya, a fantasy golf game.

Netopia logged sales of Bt4.2 million in 2005, down from Bt997 million in 2004, though higher capital expenses in setting up two branches resulted in negative profits last year.

Ricafort said the new Netopia branches were doing well this year, in particular the one near Assumption Business Administrative College in Bangkok.

Netopia is also planning to change its marketing strategy: apart from making its Internet cafes attractive to casual gamers, it is targeting corporate users and people who want to print digital images.

The company has already entered into tie-ups with mall tenants, giving discounts to their employees during off-peak hours.

Ricafort said Netopia would continue to push its "Internet only" strategy in Bangkok and gradually expand its services.

Philippine Daily Inquirer

Asia News Network

Manila