Telecom New Zealand to sell Yellow Page Group

November 4, 2006

Telecom New Zealand has announced that it is going to sell its Yellow Page Group business and is expecting at least NZ$2 billion. The Yellow Page Group includes the Yellow Pages, White Pages (which includes both offline and online services), New Zealand Retirement Guide and New Zealand Tourism Online.

However Chief Financial Officer, Mark Bogoievski, will not comment on how much the reserve price is.

The company says that the money they get from selling the directories will be used to repay almost $3.5 billion worth of debt.

Theresa Gattung, Chief Executive of Telecom, said: "There has already been considerable interest shown in the future of Yellow Pages Group based on recent media speculation. We expect that the sale should be completed by the end of this financial year."

The Yellow Page Group generates $250 million worth of revenue per annum and employs 600 people.

Ms Gattung said: "In the long term the business will be dominated by the global players. It's really prudent off us to take this opportunity to see what value we can get looking at the sale of this business at this stage."

Analysts are warning Telecom that it would miss out on the digital media possibilities. "It looks to me that it is a bit of a panic reaction in order to generate some quick cash," said, telecommunications expert, Paul Budde, "I think it's a short-term sort of strategy to generate some cash, but it will undermine its long term strategy to move from the old Telecom's world into the new digital media world."

Ms Gattung said that the privacy of the individuals will be kept, "obviously we're only going to sell to a very reputable party."

Telecom is also hinting at cutting hundreds of jobs to invest in new technology to beat off competition.