Bell "sisters" battle it out for yellow pages gold

The other competitor plans to double its geographic coverage and its give-away program.
Telephone users see the clash as a choice between US West Polska's "Panorama Firm," with yellow type on a black background, or the black-on-yellow directories published by Polskie Ksiazki Telefoniczne (PKT). But the two designs have become the battle flags in what amounts to open warfare between two companies that sprang from the 1984 breakup of AT&T, US West and NYNEX.
Each contender brings sophisticated techniques and very different philosophies to an advertising market both expect will only grow. Neither side wanted to disclose dollar figures in such a highly competitive situation.
Both directories are available free. A third company, Swedish-owned Nord-Trans, supplies for-cost directories, available through the state monopoly, in 33 provinces. These include residential and business listings.

New market target

This month, US West launched "Motoryzacja Panorama" ("Auto Panorama" in English), a small-format directory containing advertisements for auto-related businesses. Premiered this month in Warsaw with a press-run of 100,000, Auto Panorama is being mailed to the owners of high-priced automobiles, distributed through dealers to new-car buyers and with rental vehicles.
Editions are planned for Gdansk, Poznan, *ode, Wroclaw, Katowice and Krakow - with a nationwide run of 460,000.
US West Polska, wholly owned by the Denver-based "baby bell," started the business directory industry here in 1992, when it published its first yellow pages in Krakow. US West distributed 120,000 copies of that first book, which only listed businesses in the city. This year, the company gave away nearly 2.5 million books and published 24 books that cover 33 provinces.
On the other side of the ring, PKT this year is more than doubling its distribution to 2.5 million books and expanding coverage from four to fifteen metropolitan areas.
PKT entered the market 18 months after US West, in July 1993, and is a joint venture set up by NYNEX, the Polish-American Enterprise Fund and Telekomunikacja Polska SA (TPSA), the state telecommunications monopoly, said Bruce Custons, company president.
The company came into the market after negotiating an agreement with TPSA and buying out a small book-publishing company which had signed a contract with TPSA but encountered difficulties dealing with publishing directories for Warsaw. NYNEX also publishes commercial directories in the Czech Republic, Slovakia and Gibraltar.

Building up: lots of legwork

By giving PKT access to its customer database, TPSA has a 26.5% stake in the venture. But Custons said that information has proven of dubious value so far. A survey indicated that two out of every five businesses were incorrectly listed, he said. So, like its competitor, PKT builds its own database, a process which Custons says "took lots of legwork."
As an independent operator, US West does not have access to the names and telephone numbers in the database of TPSA. The company had to build its database of business names, addresses and telephone numbers from scratch.
"Our strategy for Poland is to be independent, not to have any existing partners," said Piotr Strzalkowski, sales director and acting general manager for US West. "We built the market ourselves from the bottom up," he said.
Both companies gather information the same way, hiring researchers to visit every business in a community, asking for its name, address and telephone number. Businesses get free listings in both directories, and both competitors try to update their lists regularly, since they issue new books every 12 months.
The quest for advertising sales drives both operations, and US West officials said they've started earning a profit, although they would not disclose revenue figures. Custons, who also declined to discuss specific numbers, said PKT doesn't expect to generate a profit this early in the operation, but added that revenues are in line with the company's business plan.
PKT has some 600 full-time employees in Poland, plus a corps of temporary researchers who build the database. The majority are sales people. US West Polska has 750 full-time employees, and as many as 2,000 seasonal workers and researchers. Both companies rely heavily on their sales personnel to update the lists and make continuous contact with customers and users.
Distribution, and the philosophy behind it, separates the two competitors. Custons' company aims to distribute its yellow pages directories free to every telephone subscriber - residential or commercial. This approach, so common in the West, produced some unusual reactions in Poland.

Couldn't give it away

"Markets here are fascinating," Custons observed. "We wanted to give it away - and people tried to give it back. Some people tried to pay us." In Warsaw, people followed the distribution teams, stealing the heavy-gauge plastic carrying bags. "Then others would come along and steal the books. We've seen our books for sale in kiosks in the Old Town," he recalled. Acceptance has become so high, he added, that in at least one community, businesses clamored to be included in the directory, even when they didn't have telephones.
US West takes a very different approach, Strzalkowski said. "Our product is for people and businesses who are making buying decisions. In the United States, possession of a telephone is an indication of having discretionary income. Unfortunately, in Poland, this is not always the case. People here have to wait 10 or 15 years to get a telephone. That means there's a high probability that phones are in the hands of older people, retired people, who have telephones but very little disposable income."
So US West distributes its directories to the businesses listed in the books - and to younger people, who may not have residential telephones, but do have disposable income.
"A telephone directory is where you go to check a phone number," Strzalkowski said. "We are selling a directory of information on goods and services - we deliver it to the people who will use it, if they have a phone or not."
In line with this philosophy, US West is assembling a database of people with discretionary incomes, gathering names from its own researchers, and buying others from other sources. "We have 700,000 names on our computers. These names are the result of face-to-face interviews," Strzalkowski said. Auto Panorama is the first product of that database.
"This competition amounts to open warfare," observed Telecommunications Development Consultant Piotr Rutkowski. "But I'm not certain that it is benefiting the telephone customers at this point. US West is clearly building its database for marketing purposes. This is not necessarily serving the telephone subscribers - perhaps competition will improve the directory situation in the future."