041806: Netopia plans expansion

i.t. matters
Tuesday April 18, 2006 | MANILA, PHILIPPINES

News

Netopia plans expansion

Internet cafe chain Netopia is set to expand locally by adding over 70 branches nationwide this year, but the firm is more cautious in growing its international operations.

In a recent interview, Netopia Senior Vice-President for Franchise and Operations Jose Maria "Jito" A. Grau said the company focus for this year is expanding its business in the Philippines.

Netopia started in 1997, with its first branch located along Katipunan Avenue Quezon City. Netopia is the country's largest internet cafe chain, with 180 branches. It is majority owned by dominant carrier Philippine Long Distance Telephone Co.

"We want to complete key areas in the Philippines. It's really bridging the gap and itdentifying key cities (nationwide)," Mr. Grau said.

He said that of the 72 new stores, 48 will be franchised while 24 will be company-owned. Allocation per store, Mr. Grau said, is P3 million.

Mr. Grau also said that the company may also be closing down 16 existing stores but transfer these to another location. But he added that "this [number] might still be trimmed down."

He added that the company is going slow on its international expansion as "we still want to learn from our experience in Bangkok."

It was earlier reported that Netopia was badly hit by a city ordinance in the Thai capital that prohibited students from entering internet shops during school hours.

The company, which reportedly invested a total of P20 million in Bangkok, is also strugglng with competition, officials had said.

In the first quarter of last year, the firm incurred losses due to its expansion costs, amounting to P50 million. Company officials had said that the losses would be carried until the second quarter of 2005, but added that Netopia would end the year with a profit.

Mr. Grau said that Netopia will be looking more closely into international expansion by the latter part of this year. "If ever, it's going to be similar in terms of the market, which basically means it will still be in Southeast Asia. We'd like to begin exploring possibilities this year so we could get into it next year," he said.

He added that the firm is also interested in listing at the Philippine Stock Exchange, but that this will not happen "until far ahead." "It will be more than a year, but less than five years," Mr. Grau said. -- Jennee Grace U. Rubrico

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