AT&T has launched a free directory assistance service on a trial basis in three markets: Bakersfield, California, Oklahoma City and Columbus, Ohio. The catch: users will have to listen to an ad before they receive their free information. The ads will feature competitors whenever possible so that in the crucial moments before a purchasing decision, competitors will be able to snatch away business. The free service, which AT&T-owned Cingular Wireless charges $1.50 for, will be available at 1-800-YellowPages. David Goddard, a telephone directory analyst at Simba Information, expects the service to be most popular among cell phone users who don't have a Yellow Pages handy and who were reluctant to call information in the past due to its heavy costs.
• Sources: Press Release, Reuters, San Antonio Business Journal
• Related commentary: AT&T: Unfulfilled Innovations Since 1993, Will AT&T Let Its Bid To Acquire BellSouth Die?. Conference call transcripts: AT&T Q3 2006
• Potentially impacted stocks and ETFs: AT&T (T). Competitors: BellSouth (BLS), Verizon (VZ), Sprint Nextel (S), Qwest Communications (Q). ETFs: iShares S&P Global Telecommunications (IXP), iShares Dow Jones US Telecom (IYZ), Telecom HOLDRs (TTH) and Vanguard Telecom Services (VOX)
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