FIRM GUIDANCE

Orange

Jos Verstappen, Australain GP 2000

Jos Verstappen, Australain GP 2000 

 ¬© The Cahier Archive

The principal sponsor of the Arrows Formula 1 team is mobile telephone company Orange which is now owned by France Telecom. It was started in 1994 by the Hong Kong real estate development company Hutchison Whampoa, which is controlled by Li Ka-Shing, who was named by Forbes magazine last year as the 10th richest man in the world with a fortune estimated at $12.6bn.

Originally Hutchison Whampoa had tried to build up a mobile phone business called Rabbit but when Canadian Hans Snook was sent to run it in 1993 he reported back that the company was doomed. Hutchison Whampoa decided to start again and, in partnership with British Aerospace, bought one of the four cellular phone licences which were being offered by the British government. Snook was given a list of 1400 possible names for the new company by a marketing company and picked Orange to be the brand.

The Orange service, the first digital telephone service in the world to go into operation, was launched in 1994. The company was floated in March 1996 for $3.75bn. Snook continued to build up the company and sold the company to Mannesmann in October 1999 for $33bn, making Li Ka-Shing an estimated profit on the deal of $10bn. Within a matter of weeks, however, Mannesmann was bought by a rival telecommunications firm Vodaphone AirTouch in a $280bn takeover although this was only allowed to go ahead when Vodaphone agreed to sell off Orange. France Telcom won the battle to control the company, agreeing to pay Vodaphone $51bn.

The company has recently won one of the new generation broadband cellular telephone licences which have been auctioned by the British government.

While all this was happening Orange agreed a three-year deal to sponsor the Arrows team, the company keen to increase its international exposure. Arrows was able to agree to an all-Orange car and so it was a perfect deal for Snook.

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