Truckers' Net service to cruise on Wall Street

A Florida-based Net service aimed at long-haul truckers is attempting to ride the recent Net wave on Wall Street and has filed for a $60 million public offering.

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At a number of full-service truck stops around the country, truck drivers can now get an Internet connection along with fuel and snack food.

The truckers' Internet service is offered by a small Florida company called PNV.net. In an attempt to ride the recent Net wave on Wall Street, the small firm has recently filed for a $60 million public offering.

It's a bold plan for a company targeting such a small communications market. Yet on a larger scale, it's emblematic of an Internet service provider boom that is just beginning to split into niche segments--and may specialize further in the pursuit of dwindling profits, analysts say.

"This is a very unique one," said Elliot Prince, a managing director at investment house Wit Capital, which studies the ISP market. "But there are many niche markets that can support very meaningful markets, and really go beyond being a niche."

Wired road
PNV's business model is based on the premise that the same long-haul truckers who already make close to $2 billion in long distance telephone calls would watch cable TV and use the Internet, if given the opportunity.

It's a simple system. A driver pulls his truck up to one of the roughly 2,000 full-service truck stops that dot the nation's highways. He then plugs a cable TV wire or telephone cord into a steel box next to the parking place to hook up his own laptop or television.

The setup isn't that different from the receivers at a drive-in movie theater. But PNV's boxes are connected to an Echostar satellite cable TV connection and a PNV telephone switching system, that will allow the driver to make a phone call or dial into the PNV Internet service.

The idea of truckers surfing the Net from their cabs is still a new one--but the company says a recent market study shows nearly 20 percent of long-haul drivers already travel with a PC.

PNV is looking to tap these tech-savvy drivers. It's signed long-term contracts with the largest chain of truck stops in the country, as well as with a loose set of truck stop associations that represent independent operators. The firm is also marketing its subscription services both to individual drivers and trucking fleets.

PNV executives declined to be interviewed for this story, citing "quiet period" regulations imposed by federal securities regulators related to their upcoming IPO.

Long road to profits
Profits for the firm are not on the horizon. The company says it has close to 35,000 subscribers--but many of those are split between telephone, Net, and cable services. Many of those "subscribers," however, only sign on and pay to use the service a day at a time, the company says. These users don't have the long-term value of a monthly subscriber.

Since July, the company has offered its ISP service for free, but plans to start charging $10 a month for service starting in October. This means the firm's ability to gain revenue from its Internet business--a key component of its business plan--is still open to question.

PNV plans to set up a truckers' Web portal, where it will offer email, news, sports, and weather. But it sees the portal as a means to connect trucking companies with their customers--a potentially lucrative opportunity.

"As I understand it, there's something in excess of 1 million truckers that are away from home for as much as a month at a time in the U.S.," Prince said. "Take an audience like this that's transplanted from their usual location, and need communications and entertainment, and it's definitely an audience to serve."

But in the documents it has filed with regulators, PNV notes that it will have steep competition on nearly all fronts. Other Web sites such as Layover.com already offer trucker-specific information, and offer free email and home pages. Though expensive, some truckers are even opting to buy their own satellite dishes to watch TV.

The construction of the network is also proving costly--one of the main reasons behind the public offering. Last year, the company lost $39 million on revenue of $8.4 million. It plans to double the size of its network by 2002--a goal that will keep company costs high for some time.

PNV did not detail how many shares it intends to sell, or what price it will sell them for. These details will be included in future filings with securities regulators. The company's Web portal will officially launch tomorrow.

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