Orange and Partner Communications have signed an agreement to review the value of the French company’s brand name to the Israeli telco, the companies said. The agreement could be worth up to €90m (US$100.7m).
Following a “detailed market study,”…
Orange and Partner Communications have signed an agreement to review the value of the French company’s brand name to the Israeli telco, the companies said. The agreement could be worth up to €90m (US$100.7m).
Following a “detailed market study,” both companies will have the right to terminate the brand license agreement, under which Partner has traded as Orange since 2000. If Partner does not exercise its right to terminate within 12 months, either Partner or Orange may terminate the agreement during the following 12 months.
Orange has agreed to pay Partner €40m between now and the study’s completion, plus an additional €50m if the agreement is terminated within 24 months.
In the event of a rebrand by Partner, all Orange R&D and innovation activities in Israel would be rebranded as Orange, although Orange would not be allowed to carry out any telecoms services.
According to Orange deputy CEO Pierre Louette, “Israel is a strategically important country and we have a long-term commitment to it, including our innovation activities through [local] Orange affiliates…”
Orange CEO Stephane Richard provoked a political storm earlier this month, when he told journalists in Cairo that he wanted to cut ties with Israel to improve relations in the company’s increasingly important Arab markets. Egyptian opposition groups had threatened a boycott of Orange-owned cellco Mobinil, because of its links to Partner. Describing his comments as “an attack on Israel,” Israeli Prime Minister Benjamin Netanyahu then summoned Richard to Jerusalem to explain himself.
Richard said he “deeply” regretted the results of the misunderstanding and the distortion of his recent statements, while Orange said in a statement that it “does not engage in any kind of political debate under any circumstance.”
Partner has a 28% market share in Israel, which has a population of around eight million. Mobinil, for its part, has 34 million customers in Egypt.
