The Story of the Cellular Phone Brand Orange

Welcome Orange Contd...

Said one, "I don't think that BPL or France Telecom would be interested in getting into that issue at this stage. May be never. Unlike some other telecom companies in India, BPL wanted to promote its own brand and not of a foreign partner. Suddenly, I don't see any reason for them to change that stand now."

Analysts also felt that the primary focus of France Telecom, through Orange would be to consolidate operations in Europe. Commented one, "What they (France Telecom) decide to do with their non-European properties or businesses is not clear as yet.

France Telecom has been lying low in India and Hutchison, on the other hand, has been expanding its operations with a great deal of interest. Hutchison might, at a later stage, plan to sell off its Asian properties to a separately spun-off and publicly-traded "New Orange" if they fetch the company as much as it has in Europe--around $ 7,000 per subscriber against around $ 2,500 per subscriber Hutchison itself has spent on expansion."

Orange is Squeezed

In May 2000, when France Telecom acquired Orange, two top officials from Orange met senior Hutchison India officials in Israel at a convention. They made an offer to pick up a significant stake in Hutchison's India operations, which was by then planning to launch the Orange brand in New Delhi after having made a big splash in the lucrative Mumbai circle. The offer was made a second time shortly thereafter, but Hutchison India officials turned it down, saying that they were in no mood to sell, and that they would eventually effect a merger of all the circles by taking their Indian partners along.

After the offer was turned down, a team of Orange officials visited India and said that the Orange brand licensing agreements needed to be reworked and a higher royalty would now have to be paid by Hutchison for use of the Orange brand. Hutchison officials seemed to have rejected a higher royalty payout. They said they enjoyed the rights for Mumbai and also had the option to launch the Orange brand in some "other properties" in India. It was pointed out that the only way out could be to go in for arbitration. However, nothing has moved on this front so far.

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Case Details

Case Code : BSTR002
Themes: Brand Management
Case Length : 8 Pages
Period : 1995-2001
Organization : Hutchison Telecom, BPL
Pub Date : 2001
Teaching Note : Available
Countries : India
Industry : Telecommunications

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