Mobile phone network operator, with operations worldwide.
Currently wholly-owned by France Telecom, Orange has changed hands several times during its history. Orange was born out of Microtel, a consortium formed in 1990 by British Aerospace (BAe) to bid for the licence to operate the UK's fourth mobile phone network. In 1991, the bid was successful, but before the network was launched, Hutchison Whampoa bought Microtel from BAe in a deal that gave the British defense company 30% of Hutchison UK.
The future’s bright. The future’s Orange
When the network was launched in 1994 as Orange, they set about differentiating themselves from existing operators Vodafone and Cellnet who had gained a reputation as stuffy and old-fashioned, as well as from fellow newcomers One2One. The basis of this was an award-winning advertising campaign and branding exercise created by Wolff Olins and WCRS. They succeeded in portraying the new comapany as fresh, modern and friendly, as well as establishing the Orange brand as one of the most widely recognised in the UK, and now worldwide. The "future's bright" slogan has been one of the most successful in advertising history, entering everday usage. The brand remains strong, arguably stronger than the much larger Vodafone. They like to say that their brand is built on strong customer service, and JD Power customer satisfaction surveys seem to back that up, but there has been some backlash from disgruntled customers and employees. Many have complained of the brainwashing that Orange staff seem to undergo.
The company had been run since its purchase by Hutchison by the charismatic and eccentric Hans Snook. He has developed a almost cult-like atmosphere in the company. In that respect he is to Orange what Steve Jobs is to Apple, a company with which it has more in common than just a fruity name.
In March 1996, Hutchison floated an minority portion of the company on the London Stock Exchange and New York's Nasdaq. This produced a valuation of £2.45 billion and a FTSE 100 listing for Orange plc. Three years later, they sold their remaining majority stake to the German conglomerate Mannessmann who then succeeded in making a compulsory purchase of the remaining shares.
This marriage was to be short-lived, as UK rival Vodafone launched an audacious hostile takeover of the German giant. As part of the conditions set down by the European Commission when they approved the bid, Vodafone were forced to sell-off Orange. Many suspected that Vodafone would succeed in crippling their competitor by selling them to a weak rival, who they would further weaken by the extravagant price they were demanding for their prize sale. This was not to be, and in May 2000 Orange was sold to France Telecom for a cool £26 billion.
France Telecom was a former state monopoly, and imbued with the bureaucratic and slow-moving culture of the French civil service. This did not sit well with the touchy-feely, forward thinking culture that Snook had developed at Orange. The clash of cultures is nicely illustrated by a small, possibly apocryphal, probably libellous anecdote that I heard from someone who worked closely with the most senior staff at Orange UK. The first delegation from France Telecom were arriving at the London offices of their new purchase. As they drew up, they were greeted by the sight of the CEO's expensive car, spray-painted by a disgruntled employee with a slogan along the lines of:
"Hans Snook is fucking my wife"
Soon after the acquisition by France Telecom, Snook stepped aside to spend more time with his other interests, which include alternative medicine and healthcare. He remained a special advisor to the Board. This was not before he oversaw the company's second flotation. This time, Orange SA, as it was now known, was listed on EuroNext Paris, as well as the London Stock Exchange.
France Telecom saw Orange UK as the model to follow for the rest of their current and future mobile network operations and has committed itself to introducing the Orange brand for every network in which it holds a controlling stake. They have also promised to negotiate with shareholders of networks in which they are only a minority holder in order to introduce the brand.
"A wirefree™ future"
Orange has successfully bid for UMTS (3G) licences in the UK, the Netherlands, Germany, Italy, Austria, Sweden, Switzerland, Portugal, Belgium and France. They ended up paying some unbelievable amounts for some of them. For example, the German license cost €8.37 billion, and the UK one the equivalent of €6.8 billion. In the UK, Orange faces the prospect of 3G competition with two of its former owners, as Hutchison returns with its own licence.
Orange Group by country, date of launch, and percentage stake.
Orange Annual Report 2000