Orange sold to France Telecom

THE future of the Arrows team's sponsorship from Orange remains uncertain following the announcement that the mobile phone company has been bought by France Telecom for $51bn. The new company will be the second largest mobile phone company in Europe with 21m customers in nine countries. For the moment at least the Orange name will remain despite the fact that Orange's six million customers are dwarfed by the 15m who subscribe to France Telecom's other mobile phone companies around Europe. These currently include the Itineris, Mobilcom, Mobilix, Mobistar, Globtel and Optimus brands.

As part of the deal Orange chief executive Hans Snook - who is very keen on the Formula 1 program - is being retained and will run the France Telecom mobile phone businesses with his existing staff from London. He will not have a seat on the France Telecom board of directors and industry analysts believe that there will be problems because the deal includes share options for Snook and his team. France Telecom is banned from offering share options to its management in France and the threat of repercussions throughout the company may lead to the early departure of Snook (who is much in demand in the telecom business) with the result that all operations will come under direct French control. If this is the case France Telecom will then need to decide whether to unite its brands into one large European operation under the Orange name or whether to create a completely new brand. If the decision goes against Orange the Arrows team will be promoting a product which no longer exists.

Our sources at Arrows say that this is irrelevant as there is a three-year contract in place and that if France Telecom decides to stop the sponsorship the money will still have to be paid.

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