In case you haven€™t noticed, another round of consolidation in the U.S. telecom space is well underway. In one sense, it means less this time around to the directory business than it did the last. When SBC buys AT&T, or when Verizon buys MCI, there are no directory organizations to bolt together €" one party has a publishing business and the other doesn€™t.
In another sense, the impact could be more profound that in the last wave back in the late 1990s. As SBC absorbs its acquisition of AT&T, and as Verizon does the same with MCI, the two companies may look to €œnon-core€ assets as sources of cash. We believe SBC has resisted this temptation because it loves the cash flow of directories and hasn€™t had a good reason to let go of the business. Until now, perhaps.
Verizon has certainly enjoyed the cash its directories unit provides, but the recent pattern of sell-offs in Europe and Canada suggests that corporate leaders are comfortable with disposing of directory assets if it makes sense for the business.
Add it all up, and the evidence is building of a possible fresh round of directories sell-offs, or more likely partial sell-offs.