Orange CEO sows confusion on Israel trip aimed to resolve dispute

Stressing he’s here ‘as a friend, not an enemy,’ Stephane Richard says firm will keep doing business in Israel, but doesn’t know if brand will remain

Stephane Richard, CEO of Orange, interviewed by Israel's Channel 2 on June 12, 2015 (Channel 2 screenshot)
Stephane Richard, CEO of Orange, interviewed by Israel's Channel 2 on June 12, 2015 (Channel 2 screenshot)

The CEO of French telecom giant Orange, in Israel on a visit he said was designed “to clear up the confusion” over its dealings here, failed to clarify the company’s plans for business and investment in the Jewish state, and instead seemed to sow further uncertainty.

Stephane Richard, who met on Friday with both Prime Minister Benjamin Netanyahu and former president Shimon Peres, said in a TV interview Friday night that his firm was not withdrawing from Israel — “absolutely not,” he said — and would keep doing business here. But asked in a follow-up question whether “the brand of Orange will go out of Israel,” he answered, “I don’t know. We will see.”

He also claimed that comments he made last week in Cairo about wanting to withdraw from Israel were misunderstood and distorted, but did not clarify how Orange would resolve its relations with the Israeli firm Partner, which has the rights to its brand in Israel.

Last Thursday, Orange announced it wanted to sever that business tie, but Richard said firmly at one point in the interview that Orange would “honor” its contract, and at another point that Orange and Partner would “assess… the situation” together. He said he had not sought to meet with Partner officials on this trip, and they had not offered to meet with him. The purpose of the visit was not to negotiate with Partner, he said, stressing that Israel is the only country in the world where the Orange brand is not represented by an affiliate. The Israeli firm is “not an affiliate” of Orange’s, and he had no control over its dealings here, including in the West Bank, he said.

Richard expressed sorrow and regret over the controversy sparked by remarks he made in Cairo last week about wanting to “withdraw” from Israel “tomorrow”, and insisted he had come to Israel “as a friend, not as an enemy.” He said he had underestimated the sensitivities surrounding the issue.

Richard told both Netanyahu and Peres that Orange has not and will not support anti-Israel boycott efforts, and insisted that its announced decision to abrogate its relationship with Partner was purely commercial and not political. It would be “ludicrous” to claim otherwise, he said to Peres, promising without elaboration “to develop further our activities here.”

However, having said several times in recent days that he and his firm “love” Israel and were in Israel “to stay,” Richard neither announced a reversal of the Partner move nor any new business or investment plans here.

During his meeting with Netanyahu, Richard said that Orange “as a company has never supported and will never support any kind of boycott against Israel.” And he told Peres the remarks he made last week about wanting to withdraw from Israel as soon as possible had been distorted and misunderstood.

Prime Minister Benjamin Netanyahu (R) and Orange CEO Stephane Richard in Jerusalem, June 12, 2015. (screen capture/PMO video)
Prime Minister Benjamin Netanyahu (R) and Orange CEO Stephane Richard in Jerusalem, June 12, 2015. (screen capture/PMO video)

“It’s no secret that the remarks you made last week were widely seen as an attack on Israel,” Netanyahu told the Orange chief executive, “and so your visit here is an opportunity to set the record straight.”

Richard said he deeply regretted the controversy, praised Israel, and said his firm intended to “keep on investing here.” He said it was an honor to meet with Netanyahu and that he appreciated the opportunity to “clear up the confusion.”

Richard triggered an uproar last Wednesday when he told reporters in Cairo he wanted to “withdraw the Orange brand from Israel” as soon as “tomorrow morning, … but without exposing Orange to huge risks” and to potential compensation claims from Israeli mobile provider Partner, which uses the Orange brand. “Our intention is to cut this link,” he said.

Orange officially announced the next day that it intended to sever its ties with Partner, but it claimed the decision was based purely on its desire to pull the brand from “countries in which it is not, or is no longer, an operator.”

Partner’s owner Haim Saban on Saturday dismissed that claim as a “blatant lie” and said he was weighing “all options” to battle Orange.

“Israel is the one country in the Middle East that guarantees full civic rights. It’s the one county in the Middle East where everyone is protected under the law equally,” Netanyahu told Richard, addressing the boycott pressures that the Orange CEO has reportedly faced from Arab and French activists.

“We seek a genuine and secure peace with our Palestinian neighbors, but that can only be achieved through direct negotiations between the parties without preconditions. It will not be achieved through boycotts and through threats of boycotts,” the prime minister said.

Richard thanked Netanyahu for the invitation to meet.

“It’s an honor to meet with you this morning and it gives me also an opportunity to clear up the confusion that was created after those statements. I regret deeply this controversy and I want to make totally clear that Orange as a company has never supported and will never support any kind of boycott against Israel.”

Orange was committed to “doing business. We are doing communication. We are here to connect people, certainly not to participate in any kind of boycott,” the CEO said.

Richard praised Israel as “a fantastic place to be in the digital industry and of course our [desire] is to strengthen and to keep on investing here.”

It was not clear from the statement issued after the meeting, however, what continued investment Orange planned to carry out in Israel. There was no reversal of last week’s decision to sever ties with Partner. Earlier this year, Orange and Partner signed a new 10-year contract for the latter’s use of the Orange brand.

In a letter earlier this week to Deputy Foreign Minister Tzipi Hotovely, Richard noted that Orange “has a lasting presence in Israel” through its Orange Fab start-up accelerator program and its subsidiaries Orange Business Services and Internet television specialist Viaccess-Orca.

Former president Shimon Peres hosts visiting Orange CEO Stephane Richard on June 12, 2015 (via Facebook)
Former president Shimon Peres hosts visiting Orange CEO Stephane Richard on June 12, 2015 (via Facebook)

Richard told Peres he was “here to clear up any confusion created over statements I made that were distorted and misunderstood about our activities in Israel.”

Noting that Peres “encouraged Orange to develop in Israel,” he said the firm had been “in Israel for the past 20 years, and since I have taken the leadership position in 2010, we have continually strengthened our presence here. Israel offers an outstanding digital ecosystem and we are extremely happy to be in this country. For companies in our business, Israel is one of the key places to be.”

Relating to “our position regarding Partner Communications, the telecom operator here which operates under the Orange brand,” Richard said that, “As in all other countries, we have been in negotiations with Partner to recover the use of the Orange brand and so be able to develop with one global strategy. That is at the heart of the questions that have been misunderstood regarding our activities in Israel.”

“Orange’s vision is to connect people. That is the opposite of any involvement in boycott or in political controversy,” he said. “Our actions are not based on any political objectives but rather on economic and business objectives. It is therefore ludicrous to think that our business development plans in Israel are in way the result of political pressure of any sort.”

The CEO promised that Orange “will stay focused on business and commercial strategy here in Israel and everywhere else, because that will bring the development that will benefit all of our stakeholders. They include our employees, our customers, our suppliers, our stockholders and the societies in which we do business. We are proud to have all of those stakeholders in Israel and we will continue to develop further our activities here with them.”

Peres called Richard’s visit to Israel “highly significant,” and added: “It must be made clear that you are opposed to the BDS movement and that you support Israel. Boycotts burn the bridges of peace formed instead of bringing people together and promoting tolerance. It is therefore of the highest importance that your company clarifies that it is against the boycott.

“I am delighted that Orange is expanding its activities and investments in Israel. Israel has become a Start-Up Nation and it is our hope that our entire region will advance along with our technological progress. We are developing advanced technologies and are encouraging our neighbors to take part in them. Together, we must fight against terror and boycotts and instead promote peace and progress,” Peres said.

Richard has been scrambling to contain the damage from his Cairo remarks for over a week.

“I am a friend of Israel, I love Israel, my comments were simply taken out of context and weren’t understood properly,” Richard told Interior Minister Silvan Shalom last Thursday. “I apologize on my behalf and on behalf of the company for the remarks. We at Orange condemn boycotts of all sorts.”

Richard also told Le Monde last week that Partner “is a company that uses the name of Orange, but that has nothing to do with the group and is not controlled by us. It is not in [our] policy that an operator over which we have no control use our brand,” he said. “This has nothing to do with the political context.”

AFP contributed to this report.

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