Is Piso Net really a lucrative business?

Piso Net has been making quite a buzz in the metro since early 2010, but it’s not only until recently that the enterprise got the attention of business-minded folks. So what is Piso Net and how are things from a business standpoint? Is it really a viable source of extra income? YugaTech investigates.

Piso Net is basically a merge of PC rental and Arcade rental services wherein customers can pay the services by inserting coins to the machine. The rate is typically 4mins/peso which also amounts to the typical Internet Café rate of Php15/hr. This rate can be tweaked higher or lower either to be more competitive and entice customers or gain more income by decreasing the minutes/peso.

So if there’s not much difference in pricing, what is the advantage of Piso Net over traditional Internet Cafes? Well some internet cafés have a fixed rates and minimum minutes of usage, this makes for not-so ideal scenario for budget-conscious Pinoys. And although the rate is the same, Piso Net offers a much flexible alternative that most internet cafes don’t and that is to have more control on how much time and money a customer is willing to spend at a given time.

The setup is rather simple with the bare PC parts are inside a wooden box similar to that of an Arcade machine or Videoke machine. Much like the Arcade machine, it is activated by inserting coin/s which triggers the machine. Once the time is consumed, the machine cuts off the display and will resume when a coin is inserted. The bottom wooden part inside the machine has a carved hole to collect the coins.

Now that you have a better perspective of how it works, let’s delve in to the business side of things. PC Express is one of the known providers of Piso Net machines. They offer a variety of configurations pegged at different price points.

Here are the available configurations on their website.

Intel Core i3-2100 3.10GHz dual-core
120GB/250GB IDE HDD
4GB DDR3 1333MHz RAM
NVidia GT430 1Gb DDR3 VRAM
18.5” BenQ LED Monitor
Creative 2W speakers
Php23,995

Intel Pentium dual-core G620 2.60GHz
120GB/250GB IDE HDD
4GB DDR3 1333MHz RAM
Radeon HD5570 1GB DDR3 VRAM
18.5” BenQ LED Monitor
Creative 2W speakers
Php21,495

There are also other providers who offer the same configuration for a cheaper price. Depending on your market, which is most of the time your neighbors, you can choose a configuration that suits your market’s needs (internet, gaming and/or document editing). Needless to say that gauging your market and choosing the right configuration is crucial to the success of the business and the amount of time to spend to return the investment.

We did some research on how things are going on a revenue standpoint. We interviewed a housewife married to an OFW who runs a 3 Piso Net units business for little over six months now. She got it for Php20,000 apiece and placed it in small space inside their house. According to her the monthly revenue averages at Php17,000/mo. If we break down on a per week and per day, the revenues averages at Php4,265 and Php610 respectively. So a Piso Net unit generates more or less Php5,600/month, Php1,410/week and Php200 a day. This revenue is based on 16×7 operation on a not-so developed areas.

In terms of cost of operation, she said that the 3 units’ electricity consumption amounts to Php2,700/month and Php1,000 for the internet service. Since she’s not paying for the location, the total cost of operation only sums to Php3,700/month. So if we deduct the TCO from the monthly average revenue (17,000 – 3,700), you’d have an average net revenue of Php13,300/month. At this pace, the turnaround for the return of investment is only 5 months.

Another benefit of Piso Net is that it requires less effort to maintain unlike with Internet Cafes. All the personnel need to do is to make sure that he/she has more than enough stock of 1 peso coins and units are pretty much on auto-pilot. I only wish that the future iteration of the machine supports coin amounts bigger than a Peso because it can be a pain in the neck to drop a coin every now and then.

So is the Piso Net a lucrative business? Given the breakdown of revenue and the right circumstances, yes we think it is a viable source of extra income. But in any business there will be potential drawbacks, we’d like to hear your thoughts on what are the potential disadvantages of running a Piso Net business.