French telecoms giant Orange said Thursday it wanted to withdraw its brand from Israel just hours after its chief executive came under fire for giving in to a pro-Palestinian campaign.
Orange, which is partly controlled by the French government, insisted its decision to end its brand-licensing agreement with Partner, Israel's second largest mobile operator, was not politically motivated.
But Israel lashed out at the decision, which appeared to be related to Partner's operations in the occupied West Bank.
Citing its own "brand development strategy", Orange said it did not wish to maintain a brand presence in countries "in which is it not an operator", while distancing itself from the politics.
"In this context, and while strictly adhering to existing agreements, the Group ultimately wishes to end this brand licence agreement," it said.
"The Orange Group... does not engage in any kind of political debate under any circumstance," it said.
The storm erupted on Wednesday when Orange chief executive Stephane Richard told reporters in Cairo that the company was planning to withdraw from Israel.
His remarks touched a raw nerve in the Jewish state which is growing increasingly concerned about global boycott efforts and the impact on its image abroad.
It drew a furious response from Israeli officials as well as from Partner, which is not a subsidiary but operates under the Orange brand name.
"The black side of Orange" said the top-selling Yediot Aharonot, while Israel HaYom, a staunch backer of rightwing Prime Minister Benjamin Netanyahu, ran a headline reading: "Orange is no longer a partner."
Deputy foreign minister Tzipi Hotovely wrote to the Orange boss urging him "to clarify the matter" and warning him not to become party to "the industry of lies which unfairly targets Israel".
And Isaac Benbenisti, who becomes chairman of Partner on July 1, said he was "very, very angry", accusing Richard of caving in to "very significant pressure" from pro-Palestinian activists and joining a global campaign to isolate Israel.
- End of the affair -
Richard's remarks dominated the headlines in all of Israel's main media outlets on Thursday where he was immediately cast as a supporter of the boycott movement.
Although the Orange boss did not directly refer to the question of settlements, his remarks in Cairo came after the publication on May 6 of a report accusing the telecoms giant of indirectly supporting settlement activity through its relationship with Partner.
Compiled by five mainly French NGOs and two trade unions, the report accuses Partner of building on confiscated Palestinian land, and urges Orange to cut business ties and publicly declare its desire to avoid contributing to the economic viability of the settlements.
The international community regards all Israeli construction on Palestinian land seized during the 1967 Six-Day War as illegal.
Challenged in Cairo, Richard said: "Our intention is to withdraw from Israel. It will take time" but "for sure we will do it".
"I am ready to do this tomorrow morning... but without exposing Orange to huge risks."
Orange says it holds no shares or voting rights in Partner Communications, nor does it have any influence over the firm's strategy, and that it does not have any other business activity in Israel.
Orange and Partner are linked by a licensing agreement which allows the Israeli firm to use its brand and logo in exchange for a fee. The contract was signed in 1998, two years before the telecoms giant was acquired by France Telecom.
The contract, initially open-ended, was recently amended by Orange and now expires in 2025.
Orange is present in 20 countries and the brand licensing agreement with Partner is the only one with a firm that is not a subsidiary.
- Anti-Israel is 'in' -
The crisis comes after days of introspection in Israel over its place in the world, with the government railing against what it has denounced as a campaign of delegitimisation.
Israel has been struggling to tackle a growing Palestinian-led boycott campaign which has had a number of high-profile successes.
Known as the BDS movement -- boycott, divestment and sanctions -- it aims to exert political and economic pressure over Israel's occupation of the Palestinian territories in a bid to repeat the success of the campaign which ended apartheid in South Africa.
This week, Britain’s National Union of Students voted to affiliate itself with the BDS movement, in a move which drew a sharp rebuke from Netanyahu.
Last week, Israel narrowly avoided expulsion from FIFA after the Palestinians withdrew a resolution calling on it to ban its Israeli counterpart over restrictions on Palestinian footballers and the presence of five teams inside Jewish settlements.
The boycott movement was even debated in parliament on Wednesday.
"It's not politically correct to be anti-Semitic today but it's super 'in' to be anti-Israel," Justice Minister Ayelet Shaked told MPs.