Competition Picks Up Steam in the UK

Britain€™s Guardian newspaper reported today that British Telecom plans to spend up to 10 million pounds €" about US$18 million €" promoting its BT Phone Book product this year.

This represents a significant upping of the ante by BT, which spent 3 million pounds last year, as it completed the full rollout of 171 combination White Pages and classified directories. BT, which once owned the market leader Yell Group, now has made it clear that it intends to snatch away market leadership from its former subsidiary.

This seems a tall order given BT has perhaps a 10 percent market share today, and that Yell€™s Yellow Pages is a ubiquitous, well-managed brand in the UK. However, BT is also a powerful brand, and the company doesn€™t lack for resources. We think ambitions of parity are at least some part bravado, but a sufficient commitment of resources and solid execution could conceivably result in a significant share shift.

Adding to this ratcheting up of the competitive intensity level in Britain is the steady emergence of Trinity Mirror. The regional newspaper chain successfully launched a classifieds directory in Edinburgh, Scotland, last year, and is trying to repeat its success in Glasgow, a more challenging market. Now the UK has an apparent fourth major directories player, making it one of the most competitive markets in Europe.