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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Welcome Orange

In early 2000, a bright orange bloom over cities like Mumbai, Delhi and Kolkata was giving sleepless nights to Sunil Mittal (Mittal)⁸ and Rajeev Chandrashekhar (Chandrasekhar)⁹. In February 2000, Hutchison Max Telecom introduced Orange in India. The brand "Max Touch"¹⁰ was replaced by Orange. This was for the first time that a globally recognised cellular service brand was available in India. Said Ghosh, "What that means to our subscribers is that they will now benefit from the technology advantages that Orange has. Orange is refreshing, honest, straightforward, innovative and friendly. In continuum, we will incorporate these brand values in our services at an accelerated pace".

The change in the brand logo and culture was reinforced with a fresh round of campaigns. The mass media plan included print, outdoor and cable television. The brand was positioned as one which was not for the elite or techno-savvy geeks alone but for down-to-earth, 'real' world people who wanted to be spoken to honestly and directly. Commented Ghosh, "Orange had inspired Max Touch ever since the inception of Max Touch. Orange is the logical extension and replacement of the brand Max Touch which had always imbibed Orange values."

The earlier uniform of a formal black trouser-suit with a scarf was replaced with an orange shirt and black skirt with the supervisors having the option of wearing a black jacket with an orange handkerchief. The men wore a white shirt, black trousers and an orange printed tie. Officials of Hutchison Max Telecom felt that France Telecom's purchase of Orange would not have any immediate impact on the Orange brand in India. Hutchison Max Telecom had already acquired the rights to use the Orange brand in India and so the question of 'cracks in Orange' did not arise.

Again, under the National Telecom Policy, BPL would not be able to utilize the Orange brand name in Mumbai.¹¹ Analysts felt that there would not be any major conflict of interest in use of the Orange brand in Mumbai. Said one, "I don't think that BPL or France Telecom would be interested in getting into that issue at this stage. May be never. Unlike some other telecom companies in India, BPL wanted to promote its own brand and not of a foreign partner. Suddenly, I don't see any reason for them to change that stand now."

Analysts also felt that the primary focus of France Telecom, through Orange would be to consolidate operations in Europe. Commented one, "What they (France Telecom) decide to do with their non-European properties or businesses is not clear as yet. France Telecom has been lying low in India and Hutchison, on the other hand, has been expanding its operations with a great deal of interest. Hutchison might, at a later stage, plan to sell off its Asian properties to a separately spun-off and publicly-traded "New Orange" if they fetch the company as much as it has in Europe--around $ 7,000 per subscriber against around $ 2,500 per subscriber Hutchison itself has spent on expansion."

Orange is Squeezed

In May 2000, when France Telecom acquired Orange, two top officials from Orange met senior Hutchison India officials in Israel at a convention. They made an offer to pick up a significant stake in Hutchison's India operations, which was by then planning to launch the Orange brand in New Delhi after having made a big splash in the lucrative Mumbai circle. The offer was made a second time shortly thereafter, but Hutchison India officials turned it down, saying that they were in no mood to sell, and that they would eventually effect a merger of all the circles by taking their Indian partners along.

After the offer was turned down, a team of Orange officials visited India and said that the Orange brand licensing agreements needed to be reworked and a higher royalty would now have to be paid by Hutchison for use of the Orange brand. Hutchison officials seemed to have rejected a higher royalty payout. They said they enjoyed the rights for Mumbai and also had the option to launch the Orange brand in some "other properties" in India. It was pointed out that the only way out could be to go in for arbitration. However, nothing has moved on this front so far.

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8] Chairman, Bharti Telecom.
9] Chairman and CEO, BPL Mobile Communications.
10] Prior to the launch of Orange, Hutchison Max Telecom operated in India under the brand name, Max Touch.
11] The National Telecom Policy did not allow an operator to take equity stakes or 'interests' in two mobile companies in a single mobile circle.