PCNet International seeks to move beyond British Columbia borders to rest of Canada

A British Columbia Internet service provider has been quietly expanding over the last year and is now preparing to move into the national market over the next 24 months. Victoria-based PCNet International Inc. plans to move into Ontario without any bias toward large or small cities. "Ontario is the next market we’re going to add, progressively expand into," president Reed Sumida tells Network Letter. "Whatever markets make sense for us. I think that’s the way we’ve always conducted ourselves. If the financial model works, if geographically it looks like a good fit with what our plan is in Ontario, then we’ll act. And if those pieces aren’t in place, then we likely won’t. "We’re not really discriminating. The smaller communities, we can bring some serious benefit to when we bring our product into smaller communities. The bigger communities are a little more commoditized than the smaller communities are. We look for dominant ISPs that have a relationship with their customers in communities, large or small." Sumida estimates the company has bought about 15 smaller ISPs so far this year, mostly in secondary centres such as Penticton and Nanaimo. A deal for Calgary’s Regare Corp. fell through earlier this year (NL, July 17/01). PCNet, which currently has about 65,000 subscribers in B.C. and Alberta, is examining various models in its expansion plans. It could buy up smaller firms or it could initiate its own rollout of services. While Ontario is the immediate target, other areas of the country are the eventual goal. Within the next two years, PCNet hopes to have a subscriber base of 500,000, build a national network and co-brand identity for its acquired companies, and boost non-dial up revenues to half of the total revenues. The publicly-traded company currently employs about 120 people. Last spring, it cut a number of jobs through attrition and layoffs, for a savings estimated at $180,000 each year. It is aiming to improve its gross margin to 65 per cent, with net income accounting for 10 per cent of revenues. PCNet is a full-service company providing dial-up, DSL and cable Internet access to individuals and companies. It is also working with several cablecos. "Not Shaw and Rogers, of course, because they don’t want us to," the president of the six-year-old firm reports. "But the local cable companies have no ability to deliver high-speed. We partner with them and we run the data side for them and they run the cable side."In some cases, the Internet service is sold under the PCNet brand name, in others, the cableco takes credit. "We’re pretty flexible," Sumida laughs. PCNet uses third-party access for its delivery. "We buy wholesale product from Telus. And with the local cable companies we use their cable plant of course and we share revenue with them," he says.Suit has no impact on operations Sumida dismisses a Sept. 27 lawsuit brought against him by a competitor, Technovision Systems Inc. of Aldergrove B.C. and its president/CEO Gordon Tremain. Tremain alleges that several people and companies worked in tandem to defame him in order to foment a hostile takeover of Technovision. Sumida is on the list of supposed miscreants. "He hasn’t sued PCNet, he’s only sued me. I’m the president of the company and the only reason I’d have anything to do with Technovision is as president of the company," Sumida notes. "But he failed to sue PCNet, only me. I don’t know what that’s all about, because Gordon and I have spoken three times in four years and I don’t really have a relationship with him." On the advice of the ISP’s lawyers, PCNet put out a news release denying all of Tremain’s charges and denouncing them as "baseless and false." Sumida hopes the public statement will "clear the air" for shareholders.

PCNet International seeks to move beyond British Columbia borders to rest of Canada

News | November 19, 2001

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us