Banks, telcos to be quizzed at Senate hearing into Optus outage

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Whoever is appointed Optus’ next CEO will need years to rebuild the telco’s reputation, analysts have warned, as the Senate announces a second public committee hearing into the mass outage that affected some 10 million customers and crippled rail networks, hospital communications and business nationally.

Greens Senator Sarah Hanson-Young has called a hearing for February 9, with banking executives, the communications watchdog and executives from Telstra and TPG set to give evidence as part of the ongoing probe into last month’s disruption.

Former Optus CEO Kelly Bayer Rosmarin.Credit: Alex Ellinghausen

Optus chief executive Kelly Bayer Rosmarin was the first major casualty of the Senate committee hearings, falling on her sword in November after presiding over two high-profile telco disasters within 13 months.

Other executives will be in the spotlight as the Senate weighs how to ensure an outage of that magnitude will never be repeated, a process that will probably lead to new rules for the sector.

The 16-hour outage blocked more than 200 emergency triple-zero calls and shut down rail networks as well as hospital communications services.

The telco said the outage was the result of a routine software upgrade from its own parent company, Singtel, that took its network offline and forced staff to physically reboot services. The cause of the outage was first revealed by this masthead.

“We will look to call the other big telco companies and the corporate regulator to give evidence, along with a number of the big banks whose services were impacted by the Optus fail,” Hanson-Young said.

“Access to data and online services is a part of our everyday lives. Australians deserve to know that when something goes wrong, there is a plan in place for accessing these essential services.”

Hanson-Young said communications regulator ACMA will probably be asked to front the committee hearing, as will competition and consumer regulator the ACCC, the Telecommunications Industry Ombudsman and the federal communications department.

“The lives and livelihoods of millions were acutely disrupted by the Optus outage on November 8. It was unacceptable that people were unable to call 000 or access other essential services,” she said.

Senate inquiry chair Senator Sarah Hanson-Young grilled Optus executives.Credit: Alex Ellinghausen

“The inquiry will be looking for solutions and assurances from telco corporations and regulators that they are doing everything possible to protect the public from future outages.

“Australians need to be able to call 000 in an emergency and access other essential services, regardless of what telco they might be with.

“The inquiry will also look into the role of the Commonwealth government in ensuring Australians have access to essential, reliable telecommunications going forward.”

Hanson-Young indicated that Optus executives would probably not be hauled before the February hearing. Bayer-Rosmarin and Optus’ managing director of networks, Lambo Kanagaratnam, faced more than two hours of questions last month.

Singtel is the parent company of Optus.Credit: Bloomberg

On the day that Bayer Rosmarin resigned, November 20, Hanson-Young said that Optus’ problems ran deeper than whoever was in the top job.

Optus’ chief financial officer, Michael Venter, has been appointed interim CEO while parent company Singtel searches for a replacement.

Sources close to Optus have said that while former NSW premier Gladys Berejiklian remains a frontrunner for the position, Singtel’s board will most likely opt for an external replacement who was not there for the outage, and possibly an executive from another country entirely.

There have been calls for Singtel to consider selling its Australian subsidiary in the wake of two high-profile crises in just over a year.

Gladys Berejiklian has been touted as a possible new Optus chief executive.Credit: Dominic Lorrimer

“This is a woman who fronted up to the Senate inquiry last week and now has taken the ultimate responsibility for the failure. I think that shows some leadership better than some blokes are in a similar position, I might add,” Hanson-Young said last month of Bayer Rosmarin.

“We obviously now need to see Optus really restore trust with the Australian people and to fix their crisis management. It’s so clear from the evidence that we’ve seen in the Senate inquiry thus far that they just were not prepared. And they were terrible at communicating to their customers.

“I think the main thing here is to ensure that whoever takes over is actually somebody who is trustworthy, has integrity, and is able to work with government.”

Ian Martin, senior telecommunications analyst at New Street Research, said that the challenges in front of Optus are long term.

‘The outage may be fixed but the damage to their reputation lingers and will continue to do so well into the new year.’

It’s currently unclear how many Optus customers have deserted the telco in the wake of the outage and last year’s data breach, with that picture to become clearer at the company’s next series of financial results in the new year.

“It will be three years for a new CEO to turn around momentum,” Martin said. “And it will require consistent net [customer] additions, though on a quarterly basis Optus has been good at that post-Covid.”

Paul McKeon is a communications industry veteran who helped launch the Optus brand in the 1990s.

“It’s not over,” McKeon said of Optus’ reputational woes. “The outage may be fixed but the damage to their reputation lingers and will continue to do so well into the new year.”

The Senate committee’s move to push its final report back to late February alongside the second public hearing will re-open old wounds, according to McKeon, while multiple smaller outages such as the one that occurred in Victoria last week will do the same.

“Optus would no doubt like to be able to start the new year afresh and with a clear runway… That will be difficult now,” he said.

“The new CEO can’t expect much of a honeymoon. This is just one of two government inquiries, and the senators seemed pretty exasperated by the company’s responses last month. Yes, there’s a new CEO but it was clear to most people the problems at Optus run deeper than any one person.

“Connectivity is an essential service in 2023 and it’s time for providers to treat it as such. Customers don’t sign up for a service from Optus, or any telco, thinking the promise is conditional or expecting it’ll be available just 364 days a year.”

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