Orange has reportedly agreed to terms with Israeli operator Partner Communications that could see the companies terminate their licensing agreement.
The move comes after Orange CEO Stephane Richard caused a diplomatic dispute by claiming that he would scrap the agreement “tomorrow morning” if it were legally possible. Israeli Prime Minister Benjamin Netanyahu called for the CEO to visit Israel in person to apologise for the offence his remarks caused.
The offending remarks reportedly related to the requirement for economic activity within Israel to include Israeli settlements in Palestinian territories. Both France and the EU consider these settlements to be illegally occupied.
Richard has admitted that Orange’s operations in Israel make activities in the neighbouring Arab countries – into which it would like to expand further – more challenging. However, he claimed that he did not intend to make a political statement, adding that “Orange does not support any form of boycott, in Israel or anywhere else in the world”.
Orange’s deputy CEO Pierre Louette added: “For Orange, Israel is a strategically important country and we have a long term commitment to it, including our innovation activities through the Orange affiliates in Israel.”
Partner and Orange have agreed to new terms that would allow either party to terminate their brand licensing agreement; however Orange cannot invoke the clause for another year. The operator stated: “If Partner does not exercise its right to terminate within 12 months, either Partner or Orange may terminate the agreement during the following 12 months.”
If the agreement is terminated within this period, Orange could end up paying Partner as much as €90 million. It is due to pay €40 million of this imminently as a market study investigating “Partner’s position within the dynamics of the Israeli telecommunications services marketplace” is conducted.
Orange reiterated that it will continue to support Israel, stating that if the branding agreement does end then it will rebrand its Israeli R&D operations under the Orange name, although this unit would be “restricted from engaging in telecommunications services”.