Internet in Vietnam seen as gateway to other business
HANOI - Hand Be Street flirts
with chaos, as dozens of moped riders
dodge and weave among bicyclists and
pedestrians.
But inside a half-dozen businesses on the
block, matters could not be more in lock
step. The impetus is the Internet, which has
caused the outbreak of a price war,
providing a textbook case of capitalism.
Recent months have seen a boom in the
number of Internet cafes, not just on Hang Be but in several districts of
the city as well. In turn, access prices have dropped so rapidly that cafe
owners have taken to writing over outdated prices or even printing them
on disposable signs.
It is a price war that conjures a bit of mystery because it now costs but
pennies an hour to be online here, far less than the price of access in the
United States.
Dang Duc Thuc said the matter was as plain as a plate of white rice.
"The more cafes, the cheaper the price," said Mr. Thuc, who owns a
chain of AtoZ Queen Cafes, which are among the two dozen or more
businesses now loudly advertising Internet access in Hanoi.
The cafes, hostels and tour offices that offer Net access are interspersed
on tourist streets with stores selling counterfeit compact discs, trinkets or
inexpensive meals. Employees of the Internet shops beckon passers-by
with promises of "fastest Internet" or "cheap Internet" like madams
cajoling cowboys into an Old West brothel.
Mr. Thuc said his cafes had two advantages: they were the oldest in
Vietnam and offered the fastest connection. But other cafe owners made
clear that these are widely shared distinctions, and each claimed to have
brought the Internet to Hanoi in 1997.
There is one matter on which all agree: the cost of access. They say it
started at about 800 dong a minute, or about $3 an hour. It quickly
declined to 700 and then started falling faster than the Nasdaq. In the
last year, it has slid to 300 dong from 500, and more recently to 200 or
150 a minute, depending on the establishment.
It turns out that such a price war was not unique to Hanoi in this part of
the world. Travelers in the region say access prices dropped in the
tourist area of Katmandu, Nepal, over the two weeks they went on a
trek.
Joe Cummings, an author for Lonely Planet guidebooks in Southeast
Asia, said Internet access charges were dropping across the region. In
particular, he said, rates have dropped some in Laos and steeply in
Thailand, where a cutthroat price war has driven costs to a few pennies
an hour to log on. Mr. Cummings was at a loss to explain the
phenomenon. "I don't know how they're making money," he said.
Back at the AtoZ cafes, the same question was put to Mr. Thuc: If
computers cost $500, can you make money charging less than $1 an
hour? "Maybe not," said Mr. Thuc, who turned out to be a man of few
words, or at least few words of English.
He did, though, manage to convey that the Internet nevertheless has a
value to the cafes, tourism shops and hotels that offer it. The reason, he
explained, is that the entrepreneurs use the Internet to attract customers
and then sell them other services, like tour packages, hotel rooms or a
cup of coffee and a fried egg.
Matei Mihalca, the Internet analyst at Merrill Lynch in Hong Kong, filled
in an additional piece of the puzzle. Mr. Mihalca said Internet
entrepreneurs hoped to make money by buying one connection to the
Internet and then splitting it among a handful of computers. This method,
he said, keeps costs down. But, he added, that still doesn't make it easy
to make money, given how low the prices have dropped.
Then again, the price reflects the overall cost of living here. A sumptuous
feast of chicken in garlic sauce, rice and beer costs $2, tops. A night in a
charming, French-influenced hotel costs $20.
But local incomes are commensurate, which means many Vietnamese
have neither the money — nor the training — to venture into cyberspace
themselves. Vu Van Phuong, 28, who taxis people around the city on
his Honda 50 Deluxe moped for about $1.50 a day, said he had heard
of the Internet but did not know what it was and found the idea of
spending 200 dong a minute amusingly extravagant.
His attitude may help explain the low prices charged by people like Ng
Thang Hang. "Most Vietnamese think the Internet is useless," said Ms.
Hang, the manager of the Trekking Cafe, outside of which Mr. Phuong
had parked his bike. A sign outside the Trekking Cafe advertises a 10
percent discount on Internet access (ordinarily 200 dong a minute), but
Ms. Hang said there was another advantage to logging on at Trekking:
"In my shop, the speed is the fastest."
The sharing of one Internet connection among many users has a side
effect: during busy times, access can be painfully slow. Such pain
registered glaringly on the face of Verity Sessions, a 34-year-old British
woman who was waiting to download e-mail at the AtoZ cafe on Hang
Be Street.
"I've been waiting like eight or nine minutes for the page to come up," Ms. Sessions complained. Then
again, Ms. Sessions said she couldn't complain about the price. Nor does she shop around, looking to
save a few dong. "I'll go anywhere where the price is close" to the going rate, she said.
If recent history continues to serve as a guide, she'll be able to do just that: go anywhere. The prices
appear to be continuing to drop, lock step, among the growing number of cafes. At this rate, it's only a
matter of time before the Internet is ubiquitous — and cheaper than spending an afternoon eating a
plate of garlic chicken and drinking a beer.
By Matt Richtel - The New York Times - March 5, 2001.
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