France Telecom Turns to Orange

June 12, 2006

Once the renegade darling of the UK mobile market, Orange (now owned by France Telecom) is the new master brand for all FT mobile, broadband and business services. Orange began in 1994 as an intelligent and streamlined mobile brand in response to the confusion and complexity in the UK wireless industry.

It went public amidst much fanfare two years later and soon expanded geographically. By 2000 it was sold to France Telecom for nearly 40 billion pounds, a huge premium over its assets that can be ascribed to the value of the Orange brand. It is really a pretty amazing story.

Within FT, Orange began to lost steam, sharing space in the portfolio with FT, Equant, Wanadoo. Finally, as of June 2006, looking to leverage the strength of the Orange brand, FT has consolidated its offerings under the promise of a single Orange experience.

As strong as Orange is in Europe, it is remains fairly unknown in the US. And, particularly for the uninitiated, its consumer friendly heritage and style could be a bit quirky for the very serious business of global communications. Orange Business Services, in fact, may have a tough time getting invited to the table with US-based multi-nationals looking for a telecom provider.

Yet, this is still a very interesting and smart move. The strength of the Orange brand in Europe is the stuff of legend in many brand books, even after some recent undistinguished years. Too many brands under a single roof in a world of converging services creates confusion for internal and external audiences alike. Consolidation makes sense ñ and doing so under the banner of your strongest brand is the way to go. This is essentially the same issue that AT&T is currently facing with Cingular, though in the case of AT&T they have chosen to consolidate under the more established player rather than its more vibrant offspring.

For FT, the prospect of a new name was probably considered. Yet where Orange has resonance, there is plenty to work with ñ and where it doesnít (i.e. the US) Orange is certainly distinctive and memorable. Plus, the key market in the US for Orange is the investor market, as France Telecom trades on the NYSE. FT can, and probably should, begin to introduce the name on this side of the Atlantic to potential customers ñ but simply familiarizing US investors with the Orange brand may go a long way towards helping FT fight off some recent declines in share price. (By the way, good thing for Orange that Cingular is going away, as the color orange is no longer unique in the telecom space.)

- Jonathan Paisner jpaisner@corebrand.com

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