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Yellow Pages Group has signed a deal to get consumer fingers walking on the Vodafone Live! multimedia service - raising questions about Telecom's approach to the sale of its directory division this year.
The Yellow Pages deal with Vodafone Live! was announced yesterday as the directory firm with 200,000 listings confirmed it intends to increase its income from commission on sales through its upgraded online business directory website Yellow.
The move means it will compete in a similar space to Telecom's struggling online mall ferrit.co.nz..
The new mobile service allows Vodafone Live! subscribers to search the Yellow website on mobile phones.
The system would also allow businesses on the directory service to directly respond to the mobile users.
The White Pages with residential listings is also expected to be available soon on Vodafone Live!
Yellow Pages chief executive Dudley Enoka yesterday agreed the Vodafone move would not please Telecom.
But marketing director Blair Glubb said Yellow Pages was in talks with Telecom for Yellow to be on the T3 service as it wanted to reach the other 50 per cent of the country's mobile users.
Telecom sold the Yellow Pages just eight months ago for $2.24 billion to CCMP Capital and Teachers Private Capital, the private investment arm of the Ontario Teachers Pension Plan.
Enoka confirmed yesterday that the future use of Yellow on mobile phones had not been discussed during the sale process.
In the meantime, Yellow Pages has foreshadowed a move beyond direct fee-based payment for advertising space in the Yellow Pages print and the Yellow online service.
With its ability to charge commission through sales on the New Zealand Tourism Guide website it would be developing a model for commission on sales for other companies listed on the Yellow website.
Enoka insisted Yellow Pages and its potential revenue from sales was different to Ferrit.
With 200 retailers Ferrit was niche in its approach, while Yellow Pages had about 200,000 businesses on its books.
"Near-term" sales commissions on online sales were not expected to make up a big revenue stream, he said.
But he confirmed that longer term the company's close relationship with businesses opened up several new opportunities for Yellow Pages.
Telecom dropped Yellow Pages as part of a focus on its core business as it put money into ferrit.co.nz.
As part of the sale Telecom agreed to not go into the directory business for 10 years.
While investing in ferrit.co.nz - partly due to enthusiasm over the success of Trade Me - it turned its back on the established network of Yellow Pages customers and did not seek to limit its use for online sales.
Yellow Pages yesterday revealed "strong" sales, up 7.4 per cent to $78 million for the first quarter to September 30.
Yellow Pages head of operations Greg Hurn said the company had operating profits of $47 million, which was up $400,000 on the first quarter.
Ebitda was up 11.5 per cent on last year. Revenue for print directories was up 7 per cent and online about 12 per cent, the latter off a low base.
A Telecom spokeswoman said the company had been looking at options for mobile and discussions with Yellow Pages were ongoing. "But it's not about being first, it's about adding customer value - as such we'll be watching developments closely."
Asked about Telecom's commitment to ferrit.co.nz, a Telecom statement said there had been no change to its commitment.
"Ferrit has strong support from Telecom, and Ferrit's retail partners, and is looking forward to a strong Christmas."
