Yell Group will finally be allowed to set its own prices for advertising in its Yellow Pages directories starting in April 2008, according to a new ruling by the U.K. Competition Commission.
For the past several years, Yell has had to operate its telephone directories under a price control of RPI minus 6 percent, which meant it had to annually cut its prices. The stated purpose of this regulation was to foster a more balanced competitive environment. As my colleague Charles Laughlin, program director for The Kelsey Report., wrote in July: “We see a market that is increasingly competitive, and the Competition Commission itself concedes that BT will, over time, become a stronger competitor. We wonder why the urgency to engineer competition when the invisible hand of the market seems to be doing the job, if at its own pace.”
Recently, the commission reversed its position, which we think will be beneficial to both publishers. Matthew Dearden, CEO of BT, reinforced this opinion at Peter Buxton’s Yellow Pages Today! conference in November when he talked about the progress that BT has made in increasing its market share. Equally important search engines and portals are beginning to have an impact on the print product, although Yell has a strong search product of its own with Yell.com. Meanwhile, Yell Group CEO John Condron has spoken vehemently “that there is no need for continued regulatory interference.” Yell’s stock certainly hasn’t suffered under the regulations, however.