South Korean firm eyes Philippines Internet market

PHILIPPINES--South Korean company Sabiclub is fueling an ambitious expansion drive to establish some 100 cybercafés in the Philippines over the next two years.

Each cybercafé will cost between 5 million peso (US$110,000) to 10 million peso (US$220,000), Sabiclub president and founder Don Hung Lee, told reporters in a briefing last week.

Lee said the company hopes to raise funds by selling franchise licenses of i-Hooked and Station 168, a chain of Internet cafés and network gaming centers Sabiclub currently owns. Established in the Philippines in 1995, the company currently has a paid-up capital of US$15 million, he said.

Lee added that the Korean company is "negotiating" with Philippine-listed company IP Ventures Group (IPVG) on a possible joint venture.

IPVG CEO Enrique Y. Gonzalez said in a statement: "As strategic partner of Sabiclub, we will work closely together on a number of fronts. Sabiclub is a channel into the Internet café business and Korean market." IPVG has various interests, including games, data center and business outsourcing.

The two companies, however, declined to comment on the financial aspects of the partnership.

Sabiclub, which also has interests in Web development, systems integration and games, among others, said it will also aim to build its iHooked and Station 168 brands.

The company recently opened its second i-Hooked branch in the Philippines, and is planning to open 20 more via franchise agreements in the "coming months", Lee said.

"The franchise cost will range from 5 million peso (US$110,000) to 10 million peso (US$220,000)," he said.

Sabiclub's game play puts the company in direct competition against Netopia Internet Café, which currently has more 150 cafés in the Philippines and several branches in Thailand. Netopia is owned by local carrier Philippine Long Distance Telephone (PLDT).

Lee, however, appears unfazed, disclosing that Sabiclub will also acquire existing cybercafés and re-brand these establishments as either i-Hooked or Station 168.

He told reporters that i-Hooked will cater to students, while Station 168 will cater primarily to foreigners, particularly South Koreans living and studying in the Philippines.

In fact, Lee said, some of the Internet shops Sabiclub plans to set up will be patterned and designed after South Korea's "PC bang", a stylized Internet café popular in the country.

"Bang" means room in Korea, he explained, adding that Sabiclub will set up i-Hooked cafés near schools, while Station 168 branches will be established in locations where there are foreign communities.

Joel D. Pinaroc is a freelance IT writer based in the Philippines.