TEGUCIGALPA, Honduras -- With their simple wooden desks and glowing computer screens, the Internet cafes in this capital city look much like those popping up around the rest of the world, except practically no one's typing. They're all talking.
A few inches from the door of the Multinet Cybercafe, a woman in sandals is gossiping about some acquaintances into a black phone-like receiver connected by a cord to the back of a machine. Across from her, a man is inquiring about a job.
Herman Mejilla, an accountant, is chatting with his fiancee in New Jersey, asking how her university studies are going.
"Te extraño," he says. I miss you.
In Latin America and other developing areas, Internet cafes have become this generation's equivalent of the telephone booth.
The voice transmissions aren't perfect. They are sometimes garbled by static or metallic echoes. Calls occasionally get dropped or don't get through at all.
But the phone cafes have become a lifeline for many Hondurans who often use them to talk to relatives and friends in the United States. In a country where home phone lines are hard to come by, the Internet phones are the only way many can keep in touch.
In Honduras, only about 44 of every 1,000 people had a phone in 1999, the latest year for which figures are available from the World Bank Group's development indicators database. In neighboring Nicaragua, the figure is 30 of every 1,000; in Guatemala, 55; and in El Salvador, 76.
Internet phone service is not only more readily available than normal phone service, it's significantly cheaper, too: 5 to 10 cents a minute, vs. the $1 to $1.50 per minute charged by monopoly telephone providers. In Honduras, where per capita income was about $850 in 2000, it's an obvious bargain.
Phone cafes are concentrated in Latin America but have proliferated worldwide. Few of these businesses are run by corporations. They are mostly mom-and-pop operations.
"There are even some run by individuals in their home basements," said Carlos Rodriguez, a senior analyst at Pyramid Research, which specializes in telecommunications issues.
The story of Honduras offers a new perspective on the "digital divide": While the population has fallen behind in adopting older technologies such as conventional phones, they are at the leading edge of some newer technologies.
"The technology is increasingly empowering people with the ability to go around the limitations and restrictions of the traditional telecommunications networks to communicate on a global scale," said William Drake, visiting senior fellow at the Center for International Development and Conflict Management at the University of Maryland.
The phone cafes here are so popular that they have begun to affect the bottom lines of the telecom giants in the same way some experts once predicted services such as Net2Phone would in the United States.
International long-distance revenues in Latin America have fallen significantly, from $3 billion in 1997 to $2.5 billion this year, according to Pyramid Research.
Much of the loss was due to increased competition after deregulation in some countries. But the grass-roots cafes, and new phone-to-phone Internet long-distance services offered by competing companies, also make a difference.
Pyramid said in a recent report that it believes voice over Internet in Latin America "is a bigger threat to the future of long-distance business than traditional competition or assertive regulators have ever been."
By 2006, nearly half of cross-border voice traffic will be carried through Internet services, according to forecasts by IDC Corp. analyst Elizabeth Farrand.
When Internet telephony took root in the late 1990s, telephone giants around the world screamed that the technology could put established companies out of business. Because the calls do not enter countries through the switches of the established telephone network, Internet phone services get around paying- per-minute tariffs to the companies that own the infrastructure.
Several countries -- including Brazil and India -- made it illegal to use such services. (Brazil's law will expire on Dec. 31 and India's law expired on April 1, spurring a mad rush in that country to capture a share of the new market. IWay, India's largest cybercafe chain, has announced that it will install soundproof phone cabins in most of its 700 locations.)
In the United States, the government has mostly stayed out of the debate. The Federal Communications Commission decided on a hands-off policy a few years ago. William E. Kennard, who then was FCC chairman, said he did not want to regulate an emerging industry.
Given how ubiquitous and cheap long-distance telephone service is in the United States, Internet telephony has yet to have a big impact on the big three telecoms -- AT&T, Sprint and MCI.
The one market in which the service is making inroads in the United States is businesses that want to save money on intra-company calls by routing them through their Internet connections instead of paying the telephone-service providers. But in the consumer market, Internet telephony is used mostly by college students and geeks who are willing to devote the time and energy needed to install and troubleshoot the required hardware and software.
In the developing world, entrepreneurs have designed their cafes to make placing an Internet telephone call easy.
At Multinet, which occupies a tiny one-room air-conditioned space inside the city's largest mall, customers sit in front of one of the dozen Hewlett-Packard Pavilion computers lined up in rows.
It gets so crowded on weekends, said manager Glenda Bertotty, that customers must make reservations for the 15- to 30-minute time slots.
A waitress/sales clerk/technician brings over an ordinary kitchen timer to clock the call. It costs 20 lempiras, worth about $1.25, for 15 minutes. Customers can make as many calls as they want to anywhere in the world during that time.
To start dialing, users click on an icon that says "PC-to-phone" and type in the phone number they want to call. The default country code is that of the United States, so customers need only enter the area code and seven-digit phone number.
Once the call connects, they speak through a phone that's attached to the computers.
Recipients get the calls on their regular telephone lines.
Roy Alonzo Gomez, 25, a fundraiser who lives near downtown, regularly uses the service to call his aunt and uncle in Georgia as well as friends and relatives within Honduras. Such cafes are so common, he said, that he doesn't even feel the need to have a telephone, conventional or cellular.
"This technology is not the future. It's the present here," Gomez said. "I don't know of anyone anymore who would rather make a call any other way."
