Telstra's Sensis faces hardest challenge

David Kennedy/Ovum
01 Apr 2011

Telstra is one of the few operators that has retained its old directories business. Renamed Sensis, it generated $2.1 billion in the year to June 2010, with 20% of these revenues coming from digital sources. The business focuses on the Australian SME and SoHo segments.


Sensis has revamped its product lineup, launching tools that support a syndicated, customized, and localized advertising model and minimize the management burden on the SME and SoHo segments.


These tools allow easy aggregation across all print and digital channels, generate localized content in response to inquiries, and allow customization for different terminals including smartphones and tablets.


Sensis is also expanding syndication opportunities by opening up its services as application programming interfaces (APIs). Its sophisticated analytics service, which reports lead generation by channel, will be an important differentiator as its syndication model grows more complex.


Despite these initiatives, Sensis faces a tough battle. It has forecast no organic growth in the next three years, and the future beyond that remains uncertain.


In 2009, we profiled Sensis as an example of a relatively successful media-based business run by a telco. At that time, Sensis had annual revenues of approximately $2 billion, but its 2010 revenue target of $3 billion was already impossible to achieve without major acquisitions. Since then, Sensis’ revenues stabilized at approximately $2 billion, but they are now falling.


Digital revenues have been harder to grow than Sensis expected, and print directory usage fell by 17% between 1Q09 and 4Q10. Sensis’ guidance for the 2011 financial year is for single-digit declines in revenues and ebitda.


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