Optus names new CEO, introduces new governance model

Telecommunications veteran Stephen Rue has been appointed as the new CEO of Optus, ending six months of international search after the operator's former head resigned in the aftermath of a massive network outage that left 10 million Australians without access to mobile and Internet services.

Singtel-owned Optus said on Monday that Rue will join the company in November, with interim CEO Michael Venter staying in his current post until Rue comes onboard.

Rue has been headhunted out of National Broadband Network, Australia's wholesale broadband provider, which he served as CFO for four years and then as CEO for six years. During this time, Rue oversaw a broadband rollout to more than 8 million homes and businesses across the country.

Optus chairman Paul O'Sullivan said Rue was chosen after a rigorous and extensive internal and external search.

"We expect Stephen's operational and financial background to lift service standards significantly for the benefit of our customers," O'Sullivan said in a statement.

"His experience in setting up the digital backbone of Australia will serve us well as we reinvigorate Optus as Australia's leading challenger telecommunications brand," he added.

Fixing Optus reputation

The first order of the day for Rue when he joins the company is to restore Optus's reputation, which has suffered tremendously in the past two years.

Related:Singtel warns of loss after $2.3B in writedowns

Besides the 14-hour network outage in November, the company experienced a major cyberattack in September 2022 that exposed the personal data of as many as 10 million customers in the biggest ever data breach of an Australian telco. Singtel set aside $101 million to pay for compensation or legal action over the theft of Optus customer data.

In March, Optus' already dented reputation took another hit after being fined A$1.5 million (US$980,316) for large-scale breaches of public safety rules, which put its customers at risk.

An investigation conducted by the Australian Communications and Media Authority (ACMA) found that the operator failed to upload required information of close to 200,000 mobile customers to the Integrated Public Number Database (IPND) between January 2021 and September 2023.

Furthermore, Optus' troubles have been exacerbated by the resignation of senior executives. The first to go was former CEO Kelly Bayer Rosmarin, who left soon after the network outage in November, followed by Optus' corporate and public affairs director, Sally Oelerich, who left the company in January. Two months later, networks head Lambo Kanagaratnam also made his exit.

Related:Singtel shoots down talks of an Optus sale

All these incidents have led to a persistent rumor that Singtel is actively seeking a buyer for its Australian unit – which the Singaporean operator repeatedly denied.

As the new CEO, Rue will also be faced with the challenge of turning around an underperforming business.

Last week, Singtel warned of a second-half loss after announcing 3.1 billion Singapore dollars (US$2.3 billion) in write-downs, mostly relating to Optus. But a network sharing deal struck by Optus with TPG Telecom will help offset the impact, stipulating net payments to Optus of A$1.17 billion ($768 million) over 11 years. 

New governance model 

Meanwhile, Singtel has introduced a new governance model that will have the Optus CEO and executives report to the Optus board. The Optus board and executives will work together to reset strategy and rebuild customer trust.

"In today's uncertain economic environment, businesses need greater independence and agility to better navigate the market and we believe the new governance model will set the Optus management up for success and help Optus restore and cement its position as a leading player in the Australian telecommunications market," Yuen Kuan Moon, Singtel Group CEO, said in a statement.

"We are extremely excited to have Stephen, with his deep understanding of the industry and strong operational experience, to take Optus forward," he added.