At least one commentator is surprised by reports that Telstra might partially sell off a part of its White and Yellow pages directory business. However another sees it as a good move.
Allan Horsley, managing director of Australian Telecommunication Users Group (ATUG) said: "I don't understand why Telstra would sell its White and Yellow Pages directories, when they could be a strategic resource for its developing e-commerce business, the direction it wants to be heading in."
"The White Pages is a regulated monopoly and the Yellow Pages is a virtual monopoly. Why would Telstra sell something that the buyer could make more money out of?" Horsley questioned.
The Australian Financial Review (September 11, p1) reported sources as saying Telstra was about to ask board members to formalise plans for a 25 per cent sell-off of its fully owned Pacific Access subsidiary, which operates the White Pages and Yellow Pages hard copy and online services.
The sale would reportedly raise up to $2 billion. The directories business made $50.4 million in net profit in 1999 and paid Telstra $43 million in fully franked dividends.
Telstra refused to comment on speculation about a sell-off.
Australian telecommunications analyst Paul Budde said Pacific Access sell-off plans have been on the board for quite a while.
"By selling 25 per cent, Telstra could gain a strategic partner and expand on what it already has [in the directories]. I think this could be a good thing for Telstra, as long as it still treats the directories as a core business," Budde said.
"It could get a partner who has expertise in search engines and that would be a real benefit for Telstra."
Budde said he believes that if Telstra wants to be in the content business, then the White and Yellow Pages are a good example of where the data would fit. "The directories are a key asset in that respect."
Both Budde and Horsley said there was no doubt that the directories business would be valuable.
"Any significant publisher or e-commerce company could be a potential buyer [of the 25 per cent interest]. Packer, Murdoch and the APN Group spring to mind. I think PBL would go after it in a flash," Horsley said.
The Telstra board was also expected to consider a $216 million ($US120 million) proposal to buy a half stake in the Australian subsidiary of Internet search engine LookSmart, as well as a 5 per cent interest in its Nasdaq-listed parent.