Telstra subsidiary Sensis to acquire TrueLocal

Deal shows a telco frantic to fight the threat of over-the-top providers, says analyst Paul Budde.

News Limited agreed to sell TrueLocal to Sensis, the directory subsidiary of Telstra, Sensis has announced.

The deal requires approval by the Australian Competition and Consumer Commission. The value of the deal wasn’t disclosed.

Sensis believes acquiring TrueLocal will enhance its Yellow Pages network, said Sensis managing director, John Allan.

“TrueLocal has built a strong reputation in connecting consumers with businesses across the country, through its high quality local business listings,” Allan said in a statement. “TrueLocal also has an extensive library of ratings and reviews which enables consumers to make more informed decisions when they search for a local business.

“Consumers’ reliance on this type of content underlines why it’s important to make it accessible—which drives more traffic to the Yellow Pages network and generates better leads for our customers.”

If the deal is approved, Sensis said it expects business as usual at TrueLocal and has no plans to replace TrueLocal general manager Simon Carson or his management team.

The move by Telstra follows Optus’ $6 million acquisition last year of Eatability, a restaurant directory.

“This potential sale suggests that the local online directories sector in Australia is probably best suited to only supporting one large player,” Telsyte analyst Foad Fadaghi told Computerworld Australia. “TrueLocal is a natural fit for Sensis. However, the deal will need to pass regulatory approval.”

BuddeComm analyst Paul Budde said the acquisition shows Telstra “frantically trying to counteract” the activities of over-the-top providers. A recent report by Ovum said over the top providers represent a major threat to telcos in Australia.

Fadaghi added that it’s “equally significant that News Limited is divesting a business that it had previously tightly integrated into its mastheads.”

Even so, News Limited CFO, Stephen Rue, seemed to dismiss the importance of TrueLocal to his company.

“TrueLocal is a terrific business,” Rue said in a statement. “But the reality is it is no longer a priority for us as we have recently made substantial investments in Foxtel and Fox Sports and Business Spectator and Eureka Report.”

Follow Adam Bender on Twitter: @WatchAdam

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Tags OTTdirectoryacquisitionTelcoTrueLocalsalesensis

More about Australian Competition and Consumer CommissionBuddeCommFoxtelOptusOvumTelstra CorporationTelsyteYellow Pages

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