Partner mulls dumping Orange brand

Partner/Orange

The Israeli mobile carrier is considering suing Orange CEO Stephane Richard for damages over his boycott comments.

Israeli mobile carrier Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) drew up plans several years ago for the possibility that it would end its agreement with France Telecom, owner of the Orange brand. Partner has seriously considered in the past simply launching its own brand, just as all its Israeli rivals such as Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Pelephone Communications Ltd. operate under their own brands.

It is certainly possible after the statements in Cairo yesterday by Orange CEO and chairman Stephane Richard that he wants to cancel Orange's agreement with Partner, that now is the right time for the Israeli company to dump the orange brand. It is not clear whether the Orange brand has any advantages for Partner and especially after Richard's boycott comments the brand might now be a burden. Partner is also expected to assess the damage in the coming days and decide if there is a sufficient case to sue Richard for damages.

Partner pays France Telecom tens of millions of shekels annually for the Orange franchise. It is unclear what the economic significance of ending the agreement would be for Partner. However, if France Telecom were to break the agreement it would cost them tens of millions of shekels in fines.

In the past France Telecom has spoken of Arab pressure for them to end contacts with Israel.

Published by Globes [online], Israel business news - www.globes-online.com - on June 4, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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