France's Orange plans to end brand licensing deal in Israel

PARIS (Reuters) - Israel protested to France on Thursday after the head of partly state-owned French telecom giant Orange said it intended to end a brand licensing deal with an Israeli firm, drawing accusations it was bending to a pro-Palestinian boycott movement.

Commenting on remarks in Cairo on Wednesday by Orange CEO Stephane Richard, the French company said in Paris that terminating the arrangement with Israel's Partner Communications was a business decision, not a political one.

Richard was quoted by media reports as saying at a news conference in the Egyptian capital that he was willing to withdraw the Orange brand from Israel "tomorrow morning" but moving too quickly would expose his company to legal risks and possible financial penalties.

"I know that it is a sensitive issue here in Egypt, but not only in Egypt ... We want to be one of the trustful partners of all Arab countries," he was quoted as saying.

The remarks struck a nerve in Israel, which fears diplomatic and economic isolation because of the stagnation of talks on founding a Palestinian state in territories it occupied in the 1967 war and settlement construction in those areas.

Israel said its embassy in Paris had complained to the French government and media about the "gravity" of Richard's remarks, and that it expected "immediate clarifications". The French government holds a 25 per cent stake in Orange.

In a statement in Paris a day after Richard's comments, Orange said in line with its licensing policy, it does not want to keep its brand presence in countries where it is not an operator.

"Within this framework, and while strictly respecting existing accords, Orange would like to put an end to this brand licencing," the statement said.

In a letter released to the media, Deputy Israeli Foreign Minister Tzippi Hotovely voiced deep concern" at "the possibility of a future withdrawal of the Orange brand from Israel".

She urged Richard to refrain from being "party to the industry of lies which unfairly targets Israel". Orange said his comments had been taken out of context.

Israel has said the Boycott, Divestment and Sanctions (BDS) movement, sponsored by pro-Palestinian intellectuals and bloggers, is motivated by anti-Semitism and a desire to paint Israel as illegitimate.

The movement accuses Israel of denying basic human rights to Palestinians.

France's Foreign Ministry declined to comment specifically on Richard's comments. But it reaffirmed that France is against any boycott of Israel, while viewing as illegal the settlements it has built in occupied territory, where Partner and other Israeli phone companies also operate.

In a statement, Partner scrambled to head off any public backlash in Israel over Orange's decision, saying "the sole connection between us and France Telecom is the brand", used by the Israeli company since 1998.

Israeli officials swiftly took to social media to emphasise that Orange has no holding in Partner, which is owned by Saban Capital Group. Partner employees draped a blue-and-white Israeli flag over the Orange logo on the front of company headquarters.