The Story of the Cellular Phone Brand Orange

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Themes: Brand Management
Period : 1995-2001
Organization : Hutchison Telecom, BPL
Pub Date : 2001
Countries : India
Industry : Telecommunications

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Case Code : BSTR002
Case Length : 8 Pages
Price: Rs. 200;

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Orange is Squeezed Contd...

In late 2000, in a significant departure from their earlier stand, Hutchison officials hinted that Orange was not a brand they would die for. They also hinted that Orange might not be the brand they would eventually go ahead with. Analysts also felt that it might not make sense to push a brand to which they could not claim all-India rights.

In late 2000, in response to The Economic Times' query on whether Orange representatives had negotiated a stake buy-out with Hutchison, a Hutchison spokesperson said, "There has been a great deal of speculation about Orange and Hutchison, since Hutchison sold its stake in Orange to Mannesmann over a year ago.

There has also been speculation and rumours at Orange branded businesses. Yes, there have been representatives from Orange in India. We have nothing further to add at this time." In early 2001, there was speculation that Hutchison might withdraw Orange from all parts of India, including Mumbai, replacing it with a new global brand by the end of 2001.

There was also speculation that BPL might use Orange in Mumbai. However, BPL decided not to use the Orange brand in Mumbai, even after the current user Hutchison choice to give it up. Said Chandrashekhar, "BPL is a very strong brand there (Mumbai) and there is no question of our replacing it with any another brand.

Our philosophy is clear: we do nothing, which doesn't enhance value for us." Analysts also felt that BPL was a fairly strong brand and replacing it in Mumbai or anywhere else in India, with any other brand would make little sense for the company. "I don't think BPL should be very keen on Orange. When its own brand is so reputable, why should it pay royalty to use the brand? For the rest of India also, BPL may not like to spend a lot on promoting the new brand," said a Mumbai based analyst.

But Not Hutchison

Hutchison's honeymoon with the Orange brand in India could soon be over but it would still remain a dominant player in the cellular phone market. In December 2000, the company announced that it was planning to consolidate its cellular telephone assets in India and list them within a year or eighteen months. In early 2001, oblivious of the threat looming large over its Orange brand, Hutchison was gearing up for a new competitor, MTNL in the aggressive Mumbai market. Said Das, "The company plans to launch a slew of marketing initiatives to promote the Orange brand in the near future."

To support the print campaign, the company planned to launch an ad campaign and ground promotions. Mr. Das said, "Competition may come and go. We are not worried about new rivals. We will be exploring new marketing options this year like any other year." In Feb 2001, Orange announced significant cuts in their tariffs. As per their new standard tariff plan, the outgoing and incoming calls would cost Rs. 2.80 and Rs. 1.60 respectively, as against Rs. 4 earlier.

For Hutchison, the road ahead was tough and future uncertain. Cut-throat competition, its squabbles with France Telecom over royalty payments and other issues had begun to squeeze out Orange's vigor. The million-dollar question was, whether Orange would survive and bounce back.