Orange and Israel’s Partner Communications agreed terms that could see an end to their brand licensing agreement, following a well-publicised row in the country.
Under the new framework, both parties have the right to terminate the existing brand licencing agreement, but Orange itself cannot exercise the clause for a year.
“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,” Orange said in a statement.
Orange will also pay Partner €40 million while a market study is carried out “to assess Partner’s position within the dynamics of the Israeli telecommunications services marketplace”, and an additional €50 million could be paid if the brand agreement is terminated within 24 months.
Stephane Richard, Orange’s CEO, caused uproar in Israel earlier this month after stating he would end the company’s licensing agreement with Partner “tomorrow morning” if contracts allowed.
Israel’s government took offence to the comments, and Prime Minister Benjamin Netanyahu said Richard should visit the country to apologise.
The spat reportedly links to the country’s economic activities in Israeli settlements in occupied Palestine territories, which France and the EU considers illegal.
Richard has maintained that his comments were not political, and said in a press conference at the time that “Orange does not support any form of boycott, in Israel or anywhere else in the world”.
Within the announcement, Orange added that it remains committed to Israel, even if the branding agreement is terminated, and said it will rebrand its research and development operations in the country under its own name. It would be “restricted from engaging in telecommunications services”.
Under the present agreement, Partner pays Orange to use its brand in the country.
“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,” said Pierre Louette, Orange’s deputy CEO.