Sify Technologies has seen a sizeable increase in the number of cyber cafés being run under the e-Port name for the first time in three years. The company had been shutting down internet cafés, mostly franchised, owing to profitability issues.

While Sify ran 3,887 cafés (2,165 operational) till March 31, 2008, it had only 1,227 by the end of 2010 fiscal. The company has witnessed a 14 per cent rise in the number of cafés opting for Sify in the third quarter of this financial year.

In a recent interview, Natesh Mani, president (consumer infrastructure business), Sify, told Financial Chronicle: “Of 19 million internet users in India, over 37 per cent access the web through cyber cafés. When browsing alone used to be the primary business of cafés, owners consistently lost money. Many were forced to close down as rates came crashing down to as low as Rs 10 per hour. The country now has 1.6 lakh browsing centres compared to 1.9 lakh in 2009.”

The number of internet cafés may have increased during Q3, but revenue from the business dropped. The consumer business contributed $2.77 million, seven per cent of the total revenue ($38.73 million), during the third quarter, compared to $4.31 million during the corresponding quarter in 2009. Consumer business accounted for about 19 per cent of the company’s revenue for the year ending March 31, 2010, and about eight per cent during the end of Q2. Sify posted a net loss of $2.09 million during Q3.

Sify categorises its businesses as enterprise, consumer and international. The enterprise division focuses on connectivity, hosting, enterprise application, managed voice and systems integration services. The consumer division offers broadband connection to homes and runs the ePort cyber café chain across 200 towns in the country.

Raju Vegesna, promoter, chairman and managing director of Sify, said in a statement: “Our aim will always be healthy revenue growth with focus on cost management. It will be a continuous process.”