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With Mannesmann, is the future bright for Orange?
01 December 1999
Orange, the fourth entrant in the UK market, is recognized as a visionary cellular player in Europe, with a brand name to match. The operator was acquired by Germany's Mannesmann for $33 billion in November 1999. Hans Snook, CEO of Orange, talks to Basil Ballhatchet about innovative wireless products and the logic behind the Mannesmann/Orange transaction.
Launched in 1994 Orange was the fourth entrant in the UK market. By
March 1996 the operator already had more subscribers than One2One.
The latter was acquired by Deutsche Telekom in August 1999. In
November Orange itself was acquired by Deutsche Telekom's main
competitor in Germany, Mannesmann for $33 billion, considerably
more than the price paid for One2One. Stewart Birdt, telecoms
equity analyst at Bear Stearns, explains why Orange had such a high
valuation: "I think that Orange has a better brand image in the
market than One2One. Their customer base was larger. The deal was
also done later in a rising market, and it was a stock deal rather
than a cash deal. The strengths of Orange are that the quality of
service is very good. Marketing and branding would be the top
strengths. I was not surprised at the price that Mannesmann paid
for Orange. It was at a premium."
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