Cyberage PC: Goan channel cries foul

The Cyberage PCs continue to be a bone of contention for the
Goa IT channel association and the government in the state. The state government
has decided to continue with the scheme and there is a requirement for about
22,000 PCs to be supplied to the high school students in Goa under it. However,
this has given rise to some concerns to the IT channel in the state. According
to Dhiren Mehta, President of the Goa IT Channel Association, "Supplying
PCs at a mere Rs 1,000 implies that our business goes down considerably. For a
market that survives on peripherals and services, it is very difficult to break
even or compensate this loss. Added to that the channel is not strong enough or
big enough to supply the numbers required and has to depend on outside suppliers
from Mumbai and Pune many a time."

What bothers the channel most is that in spite of the
impending issues, the channel is really helpless against the government
decision. "All we can do at this point in time is to watch and hope that
the scheme is restructured to benefit the IT dealer community," lamented
Mehta.

Expressing his discontent, Prashant Kunkolienkar, Proprieter, Computronics
Infotech says, "The Cyberage PC scheme has caused a considerable degree of
loss to the home IT market. Since there is no ceiling on how many students can
avail of this PC, there is a chance that more than one student in one family
gets to avail a PC at Rs 1,000. If one home can get more than one PC for Rs
1,000, they can always utilize it for some other business purpose. If that
happens, then people would not want to buy PCs, but could rather look at ways to
get them free of cost. This could mean big time loss."

According to Nagraj Prabhu, CEO, Prabhu and Prabhu, "Due
to the Cyberage PC scheme, the home market in Goa is gone. The renewal of the
scheme means a further deterioration in the situation." The biggest
backlash, he says is that students who buy the PCs at Rs 1,000 are selling them
off at the same or at half the rate to corporates who are likely to gain big
time in terms of getting new PCs virtually free of cost.

"In addition, the government has not indicated that the
billing for these PCs must be done within Goa. This means that outside vendors
can actually bill and supply the PCs directly to the customer, thereby bypassing
the VAT or any other state sales tax, thus causing a revenue dip for the sate
government as well," Prabhu lamented that the entire scheme was a racket
that is out to benefit the middlemen in the business.

Low price apart, post warranty service seems to be another
big concern for the channel as regards the Cyberage PCs. According to John
Menezes, Proprieter, Walnut Technologies, "The warranty period on the
Cyberage PC is one year. Once that expires and the customer needs repair or
service of the PC, we are in big trouble. This is because the service charges
can exceed Rs 1,000. So customers complain that service costs exceeds the total
cost of the PC and are often not quite willing to pay."

According to Stevens, co-ordinator for Cyberage PCs at
Computer Shoppe the Cyberage PCs have certainly hampered the market here.
"However the channel could get their business going through the sale of
peripherals, computer parts and services to some degree. In addition to Cyberage
PCs, we can look to making our profits through the sale of PCs for the corporate
industries and individual users," Stevens feels.

Incidentally the Cyberage PC is a government initiative, which began as an
attempt to take computers to schools in Goa.

SUBBALAKSHMI BM