Optus’ new chief executive vows to get back to basics to rebuild customers’ trust

In his first interview in charge of Optus, Stephen Rue says that after two crisis-plagued years the nation’s second biggest telco must do “what we say that we will do’.

Former NBN Co chief Stephen Rue started his new role as Optus’s boss last week. Picture: Britta Campion

Optus’ new chief executive, Stephen Rue, vows to take the nation’s second biggest telco back to basics as he works to rebuild customer trust after two crisis-ridden years.

In his first interview as CEO, Mr Rue, has left the door open to a strategic reset but wants to “test” his thinking, listening to customers, regulators and staff before making wholesale changes – which could include more redundancies.

Optus CFO Michael Venter.

Mr Rue, who joined the telco after spending the past decade at NBN Co, said he has always admired Optus’ “challenger” spirit to bigger rival Telstra. “That’s where we need to focus and double down on,” he said.

“Clearly, the company’s had challenges in the last few years that we just need to learn from and to make sure we build trust with our customers by being open, transparent, and by effectively doing what we say that we will do.

“My focus is on listening to our people, listening to customers, listening to regulators, and testing my thinking before we launch into any big strategic reset or anything like that.”

Mr Rue was speaking as Optus posted its best half-year earnings result in five years after it axed hundreds of staff, slashing tens of millions of dollars in costs as it faces its third crisis in two years.

Optus has shed hundreds of staff – axing its entire smart home device installation unit – as it reeled from 2022’s cyber attack and last year’s nationwide outage which cut off almost 10 million Australians and ultimately led to former chief executive Kelly Bayer Rosmarin’s resignation.

The Australian Competition and Consumer Commission is now suing Optus in the Federal Court, alleging sales staff manipulated credit checks to sell hundreds of phones and mobile plans to people who couldn’t afford them.

And the Australian Communications and Media Authority last week fined the telco $12m after 2145 customers were unable to make triple-0 phone calls during last year’s outage.

Chief financial officer Michael Venter – who acted as interim chief executive before Mr Rue started at the telco last week – said there may be more redundancies but on a smaller scale.

“It’s dangerous to sort of look at an overall headline level, because there’s many moving parts,” he said.

“We do continue to invest in other parts of the business. My outlook is that there may be … more (redundancies) to go but not to the same extent that we’ve seen in the last 12 months.”

Mr Venter said “disciplined cost management helped deliver strong first-half results”, which was buoyed by 80,000 new customers signing up to mobile plans.

In the six months to September 30, revenue was flat at $4.022bn. But earnings before interest, tax, depreciation and amortisation rose 7.4 per cent to $1.12bn.

Operating expenses fell 2.5 per cent to $2.99bn.

“We will continue to focus on our core business initiatives, including ongoing investment in a resilient network, enhancing connectivity choices for consumers and building a stronger and safer digital future for Australians,’’ Mr Venter said.

Kelly Bayer Rosmarin resigned as Optus’s CEO last December.

He said a highlight during the first half was mobile services revenue rising 4.1 per cent, and average revenue per user rising 3.4 per cent. Mobile equipment revenue jumped 5.8 per cent “amid stronger demand for high-end devices”. Apple launched its latest iPhone in early September.

The gain in new mobile customers were split across prepaid – which added an extra 39,000 customers – and postpaid, which signed on 36,000.

Its $1.6bn network sharing agreement with TPG Telecom begins next year, which it said would boost 5G coverage in rural and regional Australia, although more so for TPG than itself

“The transaction with TPG really goes to the confidence they have in our network,” Mr Venter said.

“Do we really benefit from that? I don’t know, time will tell. We are certainly not banking on going backwards.”

Under the agreement, TPG will pay Optus about $1.19bn, which will be put towards accelerating Optus’ 5G rollout across the country. In return, TPG will increase its coverage from 400,000sq km to more than 1,000,000sq km.

Like bigger rival Telstra, Optus’s wholesale and enterprise fixed revenue suffered, slumping 17.8 per cent. Optus said the decline was largely driven by “lower project-based satellite revenues and lower Enterprise ICT equipment sales”.

“We’ve been quite aggressively going after the cost base and ensuring we simplify that business,” Mr Venter said.

“We’ve exited a bunch of unprofitable clients, really refocused and doubled down on vendors – building strategic partnerships with a smaller group of vendors, and also simplifying the product set.”

Originally published as Optus’ new chief executive vows to get back to basics to rebuild customers’ trust