DAMMAM, 2 December — The Internet has destroyed the call cabin business in the Kingdom. According to a rough estimate, more than SR600 million has been invested in call cabins and almost everyone is reporting huge losses.
The call cabins were part of a self-employment scheme launched to combat unemployment among Saudis. Employing a non-Saudi in a call cabin was forbidden. When the scheme was introduced some four years ago, the Internet had not arrived in Saudi Arabia and planners had not realized its importance or its implications for call cabins. In the early days, the call cabins made healthy profits and as a result, they mushroomed all over the Kingdom.
After a year of profits, however, the call cabins received a jolt from the illegal telephone racket. There were illegal telephone operators working with a telephone operator in India to offer calls anywhere in the world at a much lower rate than that of Saudi Telephone Company (STC). The authorities soon cracked down on illegal operations, STC reduced its international charges drastically and so call cabins got a breather.
Internet users were initially confined to PC-to-PC communication and voice chat was not widely available. Today, on the other hand, there is hardly a site which does not have a voice chat offer. For SR10 a person can chat an hour with his family or friends from any Internet cafe. In addition, many new communication services pop up overnight which make it possible to talk from PC to telephone. These services sell cards and a user can call any number in the world from a PC; the charges for these calls are much cheaper than the STC rates.
Such possibilities have almost made international call cabins redundant. “The Internet has dealt a very severe blow to our business,” said Saleh Al-Ghamdi, owner of a call cabin in Alkhobar. In the last six months, he has not been able to cover his expenses. “Profitability is a dream. I will be happy if my monthly income meets the cost of phone and shop rentals,” he said. He is considering converting his business to an Internet cafe but he is apprehensive about that as well. “Initially the charges were SR25 per hour and now it is SR10 per hour. The competition is stiff and many cafes now offer SR7 per hour,” he pointed out. And chances are that in the future, there will not be so many visitors to the cafes, he said.
Computers are now almost a necessity and middle-class families, both Saudis and expatriates, invariably possess one. Out of a seven million expatriate population, more than 65 percent are workers who do not own a computer but who do visit Internet cafes once every 10 days or so to communicate with their families. This group is now the backbone of the Internet cafe business.
Call cabin operators say that if STC reduces its international tariff, the situation might improve somewhat. Otherwise the outlook is a gloomy one. If some decisive action is not taken, an investment of some SR600 million will be lost. And even worse, hundreds of Saudis will join the ranks of the unemployed. Isn’t it time to act?
