Competition flares over China's Yellow Pages market

World IT Report, Apr 9, 2003

While Yellow Pages are an important advertisement market in the western world, In China, the concept is still considered new.

It seems that now, for the first time, the market is drawing attention, as the country's two telecom players seem to be competing for this newly found income source.

China Unicom's yellow pages, already dominant in Shenzhen, Guangzhou and Shanghai, are now closing in on Beijing and causing concern in the ranks of telecom leader, China Telecom.

Jingji Guancha Bao (Economic Observer) reports that Unicom Yellow Page Information Co., registered in Beijing, is planning to issue 100,000 volumes of a "product guide" in July this year.

China telecom still holds a major advantage with its control of the "white pages" or telephone directory country-wide.

Despite the potential for competition, it appears that the market is significantly untapped for both players to profit immensely. During their two years of coexistence in Shenzhen, both Unicom Yellow Page and China Telecom Yellow Page have enjoyed significant growth.

Sales revenue for China Telecom's yellow pages has reached an unprecedented high, from nearly 7 million yuan (US$845,411) in 1998 to about 14 million yuan (US$1.69 million) in 2000. Its gross market value also soared from 7 million yuan (US$845,411) in 1998 to nearly 40 million yuan (US$4.83 million) in 2000.

While the competition is driving the market, the runner-up China Unicom is skating on thin ice, as the legal basis for their operation is still unclear. China's first "Regulations on Telecommunications," released last year, made no mention of yellow pages. The unwritten consensus is that there is no legally enforceable monopoly on the publishing of yellow pages, however the uncertainty about policy leaves Unicom yellow pages in an apprehensive mood.