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Global Telecoms Business
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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."