The departure of Kelly Bayer Rosmarin as chief executive will give Optus some clear air to move past the 14-hour outage, but for whoever comes next as CEO the turbulence won’t be over yet.
Bayer Rosmarin’s appearance at the inquiry into the Optus outage on Friday went fairly smoothly compared with how disastrous it has been for some to face the same fate in the past. Yet it was clear to everyone watching that she was unlikely to last much longer at the helm.
“My focus is on the team, the customers, the community. My focus is not on myself,” Bayer Rosmarin said when asked about whether she would quit.
There was speculation on Monday that the former NSW premier, Gladys Berejiklian, could be the lead contender for the role. However, it likely hangs on the outcome of her current legal challenge against the Independent Commission Against Corruption’s findings that she had engaged in “serious corrupt conduct”. Berejiklian has always maintained her innocence.
Berejiklian has been the managing director of Optus’s business division since last year. During last week’s outage, both Berejiklian and Bayer Rosmarin had been on the phone to CEOs whose companies use Optus in order to reassure them.
While people may have been able to accept an outage, even one that lasted 14 hours, as a fact of life and move on, Anthony Albanese on Monday pinpointed why it had proven to be the end of the line for Bayer Rosmarin. It was about communication.
“This was a shocking incident. [Communications minister] Michelle Rowland was right on top of it, out there giving more information, frankly, than Optus were giving out there to customers,” the prime minister said. “ And so this is a really regrettable incident.”
This is something that Optus was very defensive about, even as late as Friday. In its submission to the Senate inquiry, the company laid out a timeline of its public responses and dealings with the media over the Wednesday and Thursday of outage week.
Bayer Rosmarin told the inquiry that Optus’s communications team had been constantly in contact with the media during the outage to keep the public updated. She also defended the fact she hadn’t quickly appeared in public to speak about the outage.
“It’s actually unusual for a CEO to appear at all during an outage because the public would expect that my focus is on working with the teams to resolve the issue,” she said. “The [communications] team had the view at the time that this was being covered widely, and all our customers knew what we knew, which is that the network was down. We were working on it and we were very sorry.”
Bayer Rosmarin did not do many interviews outside of a few on radio and TV on the day, as well as a hand-picked selection of newspaper reporters who were filed in one after the other for their 10-minute interview slots, like it was a celebrity junket promoting a new movie.
Getting information out of Optus during the outage was difficult. In the hours and days that followed, the company had to be pushed into explaining the cause of the outage, as speculative reporting on the potential cause ultimately proved to be true.
Bayer Rosmarin’s resignation, along with the appointment of the newly created role of chief operating officer, will cool some of the immediate anger from customers and politicians about how the company handled itself throughout the past two weeks. But in the months to come there will be reminders of the outage and Optus’s terrible response to last year’s separate cybersecurity incident.
A class action lawsuit over the cyber-attack is still under way, along with a privacy commissioner investigation. There will be two government investigations into the outage, as well as the Senate report – released next month.
“We need stronger and better regulation to hold big telecommunications companies to account and to ensure they’re operating in the public interest, not just the interest of their boards and shareholders,” the inquiry chair, Greens senator Sarah Hanson-Young, said on Monday.
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Will it lead to a mass departure of customers? It is too soon to say.
A number of Optus’s rivals have reported a surge in sales around the outage, but whether that is buying up temporary SIMs to get connected (as Bayer Rosmarin acknowledged she had done) or something more permanent is not yet clear.
Ultimately price is likely to be the key factor. A Telsyte study last year found price was the biggest factor customers think about in deciding whether to switch mobile providers, followed by network coverage and reliability.
That could rule out the more expensive Telstra for many, but we are likely to see some of Optus’s other rivals, such as Vodafone and Telstra resellers, try to scoop up unhappy customers.
From the federal government’s perspective, the outage came at an awkward time for Optus, which is fighting against Telstra on several fronts.
The government is reviewing longstanding universal service obligations paid to Telstra by industry and taxpayers, worth $300m a year, to keep the remaining non-fibre landline phone services and payphones operational. Optus has labelled it a throwback to the “analogue age” and wants it changed.
It becomes much harder to argue the largest telco doesn’t have a role in keeping services working when yours has gone down for 14 hours.
Then there is Optus’s opposition to Telstra’s proposal to share a network with TPG in regional areas. While the Competition Tribunal sided with Optus and blocked the deal, it said other network sharing agreements would potentially be allowed in future– something Optus claims would decrease competition in the mobile telecoms market.
Optus has also kicked off a battle against streaming companies, arguing Netflix and other video streamers should be forced to pay a News Media Bargaining Code-style fee for using so much bandwidth on their networks.
With a new CEO, ideally one who is in quick contact with the government and who fronts up to the public when something goes wrong, the company might find the minister more receptive.