Sprint Corp. stands to generate at least $63 million from a unique plan to deploy wireless Internet access “hot spots” at 3,000 truck stops in the United States and Canada.
THAT IDEA DETOURS widely from the presumption among telecommunications carriers that money in Wireless Fidelity, or Wi-Fi, will be made at airports, convention centers, hotels and coffee shops, where business travelers are armed with laptops.
Wi-Fi technology allows for high-speed Internet access from a wireless device within about 300 feet of an access point, or hot spot.
Sprint’s alliance with , based in New Plymouth, Idaho, brings the company’s Wi-Fi strategy directly to the heaviest travelers: about 10 million truck drivers in the United States.
“This is a demographic of people that is highly mobile,” said Allan Meiusi, vice president of Truckstop.net.
According to the American Trucking Associations (ATA) of Alexandria, Va., 21 percent of U.S.-based truckers carry a laptop on board, and 14 percent use the Internet while traveling.
“They’re the very first wireless communicators because they were the first guys to use CB radios back in the 1970s,” said Bruce Friedman, a Sprint vice president who will oversee the project.
Part of that is driven by trucking companies’ attempts to keep tabs on fleets. Other truckers use the computers to communicate with family and friends.
“It’s an aid to them,” said Chris Driscoll, information technology editor of the ATA’s membership publications. “It’s also kind of like a leash to them.”
Although Sprint does not have an equity stake in startup Truckstop.net, it becomes the predominant supplier to the Wi-Fi company in a deal expected initially to span five years.
Although neither party would disclose the contract value, a conservative estimate of what Truckstop.net would pay for the high-capacity Internet lines Sprint provides would be $63 million for a two-and-a-half-year buildout of 3,000 hot spots and a five-year service agreement.
In a written statement, Sprint said Truckstop.net would deploy 300 hot spots a quarter. Once all 3,000 are up and running, Truckstop.net could pay Sprint at least $18 million a year for Internet access.
Sprint also is under contract to install each hot spot, which should generate additional revenue. Friedman said telecom revenue would be five to six times as much as service revenue.
Truckstop.net CEO Scott Moscrip said he hatched the idea in March after he discovered that a handful of companies were trying to sell Wi-Fi service to truck stops.
That included Sprint, which didn’t formally announce a Wi-Fi strategy until July.
None, though, had mapped out a coherent national vision, Moscrip said.
Truckstop.net already has signed Petro Stopping Centers (61 truck stops from Ocala, Fla., to Medford, Ore.) and Rip Griffin Travel Centers (19 locations from Prescott, Ark., to Barstow, Calif.) and plans to have partnerships with every truck stop chain within the next 30 days.
Sprint’s Friedman said he fully expects competitors such as AT&T Corp. to respond in the truck stop market.
“It’s going to be a foot race,” he said.
Copyright 2003 American City Business Journals Inc.