Warsaw (Puls Biznesu) – The MPs of the Polish ruling party Law and Justice made the prosecutor’s office to launch investigation over the change of Idea brand into Orange.
When last year PTK Centertel operator decided to change the brand of its mobile network into Orange, the Adam Smith’s Center think-tank estimated that it was a mistake. According to the center, the old brand was worth nearly USD 1 billion while the advantages connected to the new one – much lower.
“The Prosecutor’s Office in Warsaw has started investigation on damaging the company due to the agreement between PKT Centertel and Orange Brand Services”, Maciej Kujawski, the spokesman of the Prosecutor’s Office said.
Krzysztof Tchorzewski, the deputy head of Law and Justice (PiS) ruling party filed the suit. In his opinion, the rebranding may decrease the company’s income and then the revenues paid to the budget as the income tax.
PTK Centertel is to pay 1.6 percent of its annual sales for 10 years. The company will also cover costs of promoting the new brand.
“We want to know if the ideas that big companies are transferring money out of Poland. If the accusations are made public, we cannot just leave it like that”, Krzysztof Tchorzewski said.
Experts are divided.
“The loss for the state when they pay PLN 100m (EUR 25.3m) annually is of minor meaning. Whether the costs equal with advantages is a personal case. On the one hand, world operators do that, on the other, an international brand well-known in other countries was implemented to Poland”, Krzysztof Kaczmarczyk from DB Securities said.
Others suggest that the advantages were not big.
“Orange as a brand has not turned out successful. Idea is still much stronger in consumers’ minds. Are know-how and other advantages worth the price? I don’t think so”, Adam Rucinski, an investment advisor at Rucinski i wspolnicy lawyer’s office commented.
Barbara Gorska, TP spokeswoman refused to comment.
“We presented our stance in 2005. It has not changed since then”, she said.
TP telecom rejected the accusations of Adam Smith’s Center.
(PLN 1 = EUR 0.253)