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45/2012 ORANGE to become TP S.A.’s trade brand - Orange Polska

Pursuant to article 56(1.1) of the Law of 29 July 2005 on public offering and the conditions for introducing financial instruments to the organised trading system and on public companies (Journal of Laws of 2005, No. 184, item 1539, as amended), the Management Board of Telekomunikacja Polska S.A. (“TP S.A.” or “the Company”) hereby informs that on March 29, 2012, TP S.A’s Management Board decided to adopt the Orange brand for identification of TP S.A.’s products.

  • TP S.A. will introduce ORANGE as its main trade brand by June 30, 2012.
  • Orange Brand Services Limited will bear 100% of rebranding costs.
  • Licence fees will amount to 1.6% of the rebranded revenues, with the exclusion of wholesale services and a reduced fee for fixed voice for private customers.

March 29, 2012; TP S.A.’s Management Board decided to use the Orange brand for identification of all products offered by TP S.A. The Company will conduct the rebranding by June 30, 2012, extending the new brand to all TP S.A.’s services

The Orange brand was first introduced on the UK market in April 1994 and is present on the Polish market since September 2005. It is one of the world’s leading brands in telecommunications, serving 216 million customers on five continents in 2011. The Orange brand is recognised as one of the most innovative and has one of the highest recognition indices. In the 2011 Millward Brown BrandZ most valuable global brands report, Orange was ranked 36th and valued at $17.6bn.

The telecommunication market is evolving towards convergence of fixed and mobile services and concentration around one strong brand. TP S.A. expects that extending the Orange brand to its products will have a positive impact on its revenues and profitability and will contribute to growth in customer satisfaction and a decrease in churn in the fixed line segment. The change of the brand will also help to refresh the Company’s image, as Orange is perceived as more friendly, modern and trustworthy. In addition, as a result of rebranding TP S.A. will gain access to a greater number of FT Group’s innovative solutions, which will bring specific benefits to customers.

Conditions of the rebranding process were set in an agreement of July 24, 2008 between TP S.A., France Telecom SA and Orange Brand Services Limited together with annexes (the Company informed on the agreement and conditions for TV, ISP and B2B services in the current report 103/2008). Orange Brand Services Limited, a subsidiary of France Telecom SA and the brand owner, will be involved in the rebranding process, particularly by bearing 100% of the related costs.

The licence fee for using the ORANGE trade mark by TP S.A. will amount to 1.6% of the revenues generated from sales of services and products under the Orange brand. However, the licence fee for using the brand in the fixed voice segment for private customers has been reduced - due to market conditions in this segment - and will be below twenty million zlotys per annum. Furthermore, although TP S.A.’s wholesale services will be provided under the Orange brand, no licence fee will be charged based on these revenues.

If the rebranding had started on January 1, 2011, the additional licence fee for 2011 would have amounted to less than PLN 75 mn.

The licence agreement has received a positive opinion of the Independent Members of TP S.A.’s Supervisory Board and has been independently reviewed by PwC (formerly PricewaterhouseCoopers), which has concluded on the fairness of the agreement to TP S.A. from a financial point of view. 

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