Optus’ scolding puts the blowtorch on all the telcos

1 week ago 6

The moment of reckoning for Optus and the leaders of its owner Singtel has delivered plenty of theatre but little clarity on what happens next, especially when it comes to guaranteeing Triple Zero calls are no longer knocked out when there’s a network outage.

In fact, for all the talk of transparency, the lead-up to the companies’ meeting with Communications Minister Anika Wells was steeped in the kind of secrecy usually reserved for visits from state leaders. Optus and the federal government were both coy about the timing and the location of the chat.

Optus chair John Arthur, Singtel CEO Kuan Moon Yuen and Optus CEO Stephen Rue faced reporters following the meeting with Communications Minister Anika Wells.

Even the Optus/Singtel board meeting – which ended up being held at Optus chairman John Arthur’s house in lower North Sydney instead of the telco’s sprawling headquarters at Macquarie Park – was a hush-hush affair.

For all the cloak-and-dagger setup, we do now have a sense of what the meeting actually delivered.

The federal government has given Optus and Singtel a stern scolding, with Wells warning that there can be no repeats of the fatal outage. Optus will need to get its network and processes audited by independent advisors, which means the guts of its business will be now subject to two inquiries. The telco has launched its own independent review of the outage, which is being headed by corporate veteran Kerry Schott.

As for Singtel, its chief executive Kuan Moon Yuen looked suitably contrite as he fronted up to the media on Tuesday, apologising for the fatal outage while providing guarded support to Optus’ embattled boss Stephen Rue.

While Yuen refused to give a straight “yes” or “no” answer on whether Rue is keeping his job, he did point out that the former NBN Co boss had been hand-picked by Singtel to spruce up Optus after a couple of horror years following its data breach in 2022 and the bigger network outage in 2023.

Rue’s makeover has obviously come unstuck over the past week or so, but no one in the telecommunications industry believes he is going to lose his job. The simple reason for that is that finding a chief executive up to the task of fixing Optus is almost impossible for Singtel.

The Singaporean giant can fly in a troubleshooter from its global business, but that would undo all the effort it has made over the past 12 months in making sure that Optus has Australian oversight and doesn’t simply dance to the whims of an overseas overlord.

So, Rue is staying put until the inquiries are complete, hoping that there are no further outages that jeopardise Triple Zero calls.

The Triple Zero system is a complex beast, with many points of failure.

Interestingly, Yuen on Tuesday also bypassed concerns around Singtel not putting enough money into Optus’ network, saying the problem was the people and processes inside Optus – in plain speak, Optus staff messed up, and the rest is history.

As for Wells’ comments on ensuring Triple Zero dropouts no longer plague Australians, that’s a problem bigger than just Optus. On Monday, just as Optus was left red-faced by an outage in the Illawarra, a couple of other minor outages (Telstra and NBN) also put Triple Zero calls at risk.

Every major telco in the past couple of years has had a Triple Zero outage at one time or another.

Before its latest disaster, Optus had a major issue in 2023, while Telstra had an incident last year when its Triple Zero call centre was slow to transfer calls to emergency services for 90 minutes. And, earlier this year, TPG/Vodafone was reprimanded for failing to notify Telstra – which is responsible for running the Triple Zero emergency call service – about an outage that had affected emergency calls from its network.

The fact that outages, even minor ones, can quickly escalate to a full-blown company crisis means that every telco, not just Optus, is now on notice.

So, managing Triple Zero is an industry-wide concern, and the system – originally built for the days when a single operator (Telstra) ran landlines across Australia – is a complex beast, with many points of failure.

The complexity comes not only from the multiple networks operating in Australia today, but also the multitude of devices Australians use daily. Then there are emergency service operators across each state, who are a vital cog in making sure every call is answered promptly.

Telstra operates the Triple Zero service and its job is to route emergency calls from all telcos to the appropriate emergency service. There are strict rules in place that spell out what needs to happen when there is an outage, and despite the carnage of the past few weeks, these rules do work well most of the time.

The independent accountability that the federal government is seeking from Optus now should pinpoint where the telco dropped the ball, but the episode has put the entire telecommunications industry on its toes. Optus chair John Arthur announced on Tuesday that consultancy giant Kearney would oversee the Optus network for the forseeable future, and report directly to the Optus CEO and board.

The fact that outages, even minor ones, can quickly escalate to a full-blown company crisis means that every telco, not just Optus, is now on notice.

And you can bet that Optus’ peers are all furiously making sure their communications channels to state and federal governments and the regulator are crystal clear.

With the federal government now copping heat for not expediting the installation of a Triple Zero guardian legislation, some of that pressure will trickle down to the telcos. They will also have to accelerate the process of implementing the recommendations laid out in the Bean Review – which was carried out after the major Triple Zero outage in 2023 to ensure it never happened again.

Going slow on Triple Zero is no longer an option – not for the telcos, and not for the federal government.

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