Israeli mobile carrier mulls dumping Orange brand, suing after CEO backs boycott

The French government owns 25% of Partner and it is under pressure to pull out of its Israeli activities because Partner operates in the West Bank.

June 4, 2015 13:00
2 minute read.
French telecom operator Orange Chairman and CEO Stephane Richard

French telecom operator Orange Chairman and CEO Stephane Richard speaks during the company's 2014 annual results presentation in Paris. (photo credit: REUTERS)


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Israeli mobile carrier Partner Communications Ltd. is considering ending its agreement with French telecom giant Orange after Orange CEO Stephane Richard said Wednesday that his company wished to distance itself from its role in facilitating Israel’s rule over the Palestinian territories.

The Israeli company is also considering additional steps such as suing Richard for damages for his boycott comments.

Speaking at a press conference in Cairo, Richard told journalists, “Our intention is to withdraw from Israel. It will take time but for sure we will do it. Believe me I would cancel the contract tomorrow if I could." He added, however, that the language of Orange's contract with its Israeli operator precludes it from pulling out.

The French government owns 25% of Orange and it is under pressure to pull out of its Israeli activities because Partner operates in the West Bank.

Partner drew up plans several years ago for the possibility that it would end its agreement with Orange. Partner has seriously considered in the past simply launching its own brand, just as all its Israeli rivals such as Cellcom Israel Ltd. and Pelephone Communications Ltd. operate under their own brands.

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 Orange were to break the agreement it would cost them tens of millions of shekels in fines.

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

Partner owner Haim Saban hit back after Richard threatened to adhere to the boycott of Israel. Saban said, "I'm proud to hold the controlling stake in Partner, which is an Israeli-owned company that leases the Orange brand. Threats won't deter me and I will continue to work on behalf of Israel and lead the global struggle in support of Israel."

Partner outgoing CEO Haim Romano said, "We regret the words. Partner has held the Orange franchise since 1998 when it was under the ownership of Hong Kong's Hutchison group. Partner will continue to loyally serve its customers in Israel without discrimination or prejudice."

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