Adonis Diaries

French telecoms giant Orange to terminate contract with Israel Partner

Posted on: June 6, 2015

Orange says it plans to terminate contract with brand partner in Israel

French telecoms giant has been under pressure to end relationship with Partner over services to Israeli settlements regarded as illegal under international law

Speaking at a news conference in Cairo, Stephane Richard says his company intends to withdraw the Orange brand from Israel as soon as possible
Speaking at a news conference in Cairo, Stephane Richard says his company intends to withdraw the Orange brand from Israel as soon as possible. Photograph: Thomas Hartwell/AP

The French telecoms giant Orange has indicated that it intends to terminate its relationship with the Israeli company that licenses its brand in the country

And would end the relationship “tomorrow” if it could.

The comments – made by the company’s CEO, Stephane Richard – have emerged amid a sharp push back by the Israeli government against growing calls for an international boycott of Israel over its continuing occupation of Palestinian territories.

They were angrily condemned by the Israeli prime minister, Binyamin Netanyahu, who called on the French government to “distance itself publicly from the miserable statement and the miserable action of a company that is partially owned by the government of France.”

Although Orange only licenses its name to the Israeli company Partner, the threat – if carried through – will be seen as a major success for the Boycott, Divestment and Sanctions movement which has been campaigning on the issue in both France and Egypt.

Orange, in which the French government has a quarter stake, has been under pressure in France as well as in Egypt to terminate its relationship with Partner over its supply of services to Israeli settlements regarded as illegal under international law.

Last month Orange was accused of flouting the French foreign ministry’s own guidelines on investing in Israel by the Catholic Committee against Hunger and for Development.

In a report published in May the group claimed that Partner had built more than 100 telecommunication antennas on confiscated Palestinian land, as well as operating four shops in Israeli settlements.

Speaking at a news conference in Cairo to lay out plans for the years ahead in Egypt, Richard said that his company intended to withdraw the Orange brand from Israel as soon as possible, but that the move would take time.

“I am ready to abandon this tomorrow morning but the point is that I want to secure the legal risk for the company. I want to terminate this, once again, but I don’t want to expose Orange to a level of risk and of penalties that could be really sizeable for the company,” he said.

Richard said his company’s stance on the matter was the result of its sensitivity to Arab countries.

“I know that it is a sensitive issue here in Egypt, but not only in Egypt … We want to be one of the trustful partners of all Arab countries.”

He added that the brand fees from the contract with Partner were low compared to the size of Orange, saying that “the interest for us is certainly not a financial interest”.

“If you take those amounts on one side and on the other side the time that we spend to explain this, to try to find a solution and the consequences that we have to manage here but also in France, believe me it’s a very bad deal,” he added.

At the news conference, Richard explained that the use of the Orange brand name in Israel dated back to the 1990s, under a contract inherited by the group when France Telecom acquired Orange.

Recent negotiations have put Orange in a position where it can terminate the contract in the future, but at the moment the legal framework was not favourable, he said. Partner is Israel’s second biggest mobile company.

Partner said in response that it regrets Richard’s comments.

“We wish to highlight that Partner Communications is an Israeli company owned by Saban Capital Group, which is owned by Haim Saban, and not by France Telecom (Orange). The company is holding the Orange brand name since 1998, and the only connection between us and France Telecom is the brand name.”

Israel’s deputy foreign minister, Tzipi Hotovely, wrote to Richard asking for clarification.

“I must admit to have been taken aback by these reports which do not become a responsible global company such as Orange,” she wrote. “I am confident that these reports do not reflect the intent of your company. I therefore urge you to clarify the matter as soon as possible.”

Yair Lapid, head of the opposition Yesh Atid party, also attacked Richard for the comments, and called on state-run France Telecom, which owns a majority stake in Orange, to distance itself from the comments.

“This is hypocrisy of the highest order,” he said in a statement. “I don’t remember him having a problem making money here and profiting from Israeli citizens. The state of Israel is an island of sanity in this difficult neighbourhood and we certainly won’t accept lessons in morality from someone so self-righteous and detached.”

The row over Richard’s comments came as the US ambassador to Israel, Dan Shapiro, pointedly remarked that the threats to boycott Israel were being driven, in part, by a lack of peace negotiations.

“The problem is that now there are no negotiations,” Shapiro told Israel Radio.

“In the past when there were negotiations, that was the most effective tool to tell other countries, perhaps private companies as well, not to impose sanctions because that would upset efforts to reach a solution.”

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June 2015

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