Orange Would Cut Israel Ties 'Tomorrow' if Not for 'Huge Risk' of Penalties

Speaking in Cairo, CEO Stephane Richard says mobile telecom giant intends to withdraw brand from Israel as soon as possible, but that the move would take time.

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Orange CEO Stephane Richard, March 6, 2014
Orange CEO Stephane Richard, March 6, 2014.Credit: Bloomberg

French telecom giant Orange SA would end its relationship with the Israeli operator Partner Communications that pays to use its name "tomorrow" if it could, but to do so would be a "huge risk" in terms of penalties, Orange's CEO said Wednesday.

Speaking at a news conference in Cairo to lay out plans for the years ahead in Egypt, Stephane Richard said his company intends 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 sizable for the company," he said.

French human rights organizations have been pushing their government, which has a quarter stake in Orange, and the company itself, to end the relationship because Partner provides services to Israeli settlements. The settlements, built on land the Palestinians want for a future state, are seen as illegitimate by the international community.

Simultaneously, an international grassroots organization is calling for boycotts, divestment and sanctions against Israel over its treatment of the Palestinians. Israel says the BDS movement is not about the occupation of Palestinian territory, but rather a campaign to delegitimize the Jewish state.

At the news conference, Richard explained that the use of the Orange brand name in Israel dates 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 is not favorable, he said. Partner is Israel's second biggest mobile company.

"Sorry to say, but a dispute with [a] partner when you have zero legal position in Israeli courts is not something that I would recommend for my company. I am not going to pay hundreds of millions of euros only because I would have [to] take a risk, a huge risk, in terms of the penalties that we could have if we entered into this kind of brutal process."

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."