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

Published June 4th, 2015 - 11:24 GMT
Partner Communications Ltd. is considering ending its agreement with Orange after its CEO said the company wished to distance itself from Israel. (AFP/File)
Partner Communications Ltd. is considering ending its agreement with Orange after its CEO said the company wished to distance itself from Israel. (AFP/File)

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." 

Knesset Economics Committee chairman Eitan Cabel (Zionist Union) pointed out that Orange is a brand name, but Partner is an Israeli company with thousands of Israeli employees, and said he plans to hold a committee meeting calling to stand by the workers and the company.

“These workers are part of us, and we won’t let any foreign entity threaten their workplace,” Cabel stated. “We won’t be partners to perverse threats by a foreign brand. Anyone who leaves Partner Israel now, because of what the World Orange CEO said, has become a tool of those who hate Israel.”

Cabel called it unfortunate that the government “has not succeeded to put together a broad international front to prevent the new war that is upon us: The boycott war.”

Yesh Atid chairman Yair Lapid, a former finance minister, called the Partner CEO's statements "the highest level of audacity and hypocrisy."

Lapid called for the French government, which holds about a quarter of Orange's stocks, to distance itself from what the CEO said.

"I don't remember him having a problem making money and taking money from the Israeli public," he stated. "Israel is an island of sanity in the worst neighborhood in the world and we certainly are not ready to have smug, disconnected Europeans preach to us."

Lapid said on Wednesday night, before heading to the US for meetings, that Israel must have a better response to BDS, saying the prime minister does not have a real policy for fighting it.

"The diplomatic war can't wait until Likud ministers finish fighting among themselves over who is responsible for what," he quipped.

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