Add articles to your saved list and come back to them any time.<\/p>\n
Optus\u2019 network meltdown and the subsequent resignation of chief executive Kelly Bayer Rosmarin have raised questions about the governance structure of parent company Singtel, and calls for it to consider selling its Australian subsidiary in the wake of two high-profile crises in just over a year.<\/p>\n
Bayer Rosmarin stepped down on Monday, with the Singtel board tapping chief financial officer Michael Venter to serve as interim boss while it embarks on a global search for her replacement.<\/p>\n
<\/p>\n
Peter Adderton, Boost Mobile founder, says Singtel should consider selling Optus.<\/span>Credit: <\/span>AFR<\/cite><\/p>\n But some industry figures are calling for change at Optus\u2019 parent company, with telecommunications veteran Peter Adderton, the founder of Boost Mobile, calling on Singtel to consider selling Optus, declaring that change will need to run deeper than whoever replaces Bayer Rosmarin.<\/p>\n \u201cMy belief is that they should sell Optus,\u201d Adderton said in an interview.<\/p>\n \u201cI think the corporate cultural differences between the Singaporeans and Australians cannot be underestimated. And I think what we saw in the handling of both the data breach and also the recent outage is the result of that culture clash.<\/p>\n \u201cI think it is time for Singtel to accept that their corporate culture and the culture of how Australians operate is very different, and that culture difference is at the heart of the problem.\u201d<\/p>\n Optus chief Kelly Bayer Rosmarin resigned this week.<\/span>Credit: <\/span>Alex Ellinghausen<\/cite><\/p>\n Optus would also benefit from being publicly listed in Australia, Adderton said, and the nation\u2019s superannuation funds, which have recently made some major investments in telecommunications infrastructure, would benefit from acquiring it.<\/p>\n Around a decade ago Singtel considered a sale of Optus to private equity groups, with investors including Kohlberg Kravis Roberts (KKR) and Carlyle Group circling the telco in a process that never went anywhere.<\/p>\n And as recently last year Singtel was reportedly weighing an initial public offering of Optus, in what would be one of Australia\u2019s largest-ever corporate listings. But the ongoing market volatility scuppered those plans.<\/p>\n Optus is fully owned by Singtel, which itself is majority owned by Temasek Holdings, the investment arm of the Singapore government, which owns 55 per cent of the company\u2019s issued share capital.<\/p>\n People outside an Optus store on the day of the latest outage.<\/span>Credit: <\/span>Chris Hopkins<\/cite><\/p>\n Aside from its own Singapore-based mobile network and Optus, Singtel also owns 32.15 per cent of Bharti Airtel, India\u2019s second-largest carrier, as well as stakes in telcos across Thailand, the Philippines, South Asia, Africa and Indonesia.<\/p>\n Singtel\u2019s latest annual report shows that 46 per cent of its staff are based out of Singapore, despite 81 per cent of its underlying net profit coming from operations outside of Singapore.<\/p>\n Singtel has stayed mostly silent while a mass outage engulfed its Australian subsidiary this month, issuing only two statements to journalists: firstly to issue a correction to Optus\u2019 technical explanation for the outage, then secondly to announce Bayer Rosmarin\u2019s resignation.<\/p>\n Singtel Group CEO Yuen Kuan Moon said on Monday that Optus was \u201can integral part of our group\u2019s business.\u201d<\/p>\n SingTel, Optus\u2019 parent company, turned the finger back to Optus for its network outage last week.<\/span>Credit: <\/span>Bloomberg<\/cite><\/p>\n The Singtel board is led by former Temasek boss Lee Theng Kiat, while veteran Australian corporate executives Gail Kelly and John Arthur also sit on the board. Arthur is a member of Singtel\u2019s risk and sustainability committee.<\/p>\n The relative silence comes while Optus seemingly bleeds customers, with both TPG and Telstra reporting an early uptick in market share.<\/p>\n Data provided to this masthead from analysis firm Similarweb shows traffic to Vodafone\u2019s website spiked on the day of the Optus outage.<\/p>\n \u201cVodafone would likely be the major beneficiary of any significant churn event,\u201d a Similarweb analyst said.<\/p>\n \u2018[Optus] will be number two forever \u2026 they will never be number one with this approach and they will continue to lose customers.\u2019<\/p>\n Adderton has a long shared history with Optus: Boost originally relied on the Optus network in the early 2000s, before later switching to Telstra infrastructure. Optus settled a legal dispute with Adderton and Boost Mobile earlier this year, after Boost took issue with Optus naming two of its products \u201cMobile Boost\u201d and \u201cInternet Boost\u201d. The terms of the settlement were confidential.<\/p>\n \u201cThey will be number two forever, unless number three [TPG] catches them,\u201d Adderton said of Optus. \u201cThey will never be number one with this approach and they will continue to lose customers.<\/p>\n \u201cRight now any issue with Optus is going to be a big issue. It would take a pretty strong CEO to take turn that around, but what I think it\u2019s going to take is a sale of Optus from the Singaporeans.<\/p>\n \u201cI think that\u2019s a question for every telco, to shift yourself more to being customer-centric, but especially for Optus which is facing a crisis in customer trust.\u201d<\/p>\n Former NSW premier Gladys Berejiklian is expected to become the new Optus chief executive.<\/span>Credit: <\/span>AAP<\/cite><\/p>\n A former Optus executive who requested anonymity to be able to speak freely said that Singtel had for years \u201clet Optus run its own show.\u201d<\/p>\n \u201cThere are definite cultural differences, it\u2019s just the reality that people in Singapore treat their relationships and their connections differently to how people do in Australia,\u201d the executive said.<\/p>\n The former executive said that he expected former NSW premier Gladys Berejiklian to be appointed Optus\u2019 next chief executive despite the findings of corruption against her earlier this year. They think the relationship between Singtel and Optus is still tenable despite the geographical and cultural differences.<\/p>\n \u201cI think they would be happy to appoint another Australian in the role, despite the corruption stuff,\u201d the executive said.<\/p>\n Another potential front-runner discussed by industry figures is Anna Yip, the current deputy CEO of Singtel\u2019s consumer business.<\/p>\n Singtel did not respond to a request for comment. Optus chairman Paul O\u2019Sullivan also did not respond to a request for comment.<\/p>\n Meanwhile Joe Longo, the chairman of the Australian Securities and Investments Commission (ASIC), joined the widespread criticism of Optus executives\u2019 handling of the outage on Tuesday and said it served as a warning for the rest of corporate Australia.<\/p>\n \u201cI think with the benefit of hindsight, the communication could have been clearer,\u201d he told ABC Radio. \u201cIt\u2019s clear from what little we know, the extent of the disruption was entirely unexpected. And I think that\u2019s where Optus was wrong-footed, so to speak, they didn\u2019t expect a disruption or outage of this magnitude.\u201d<\/p>\n The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. <\/i><\/b>Sign up to get it every weekday morning<\/i><\/b>.<\/i><\/b><\/p>\n<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n
Most Viewed in Technology<\/h2>\n
From our partners<\/h3>\n