Optus CEO Kelly Bayer Rosmarin’s future in doubt: no crisis planning for shutdown
Optus CEO Kelly Bayer Rosmarin faces a shaky future at the telco after a bruising senate inquiry, including an admission there had been no planning for total shutdown.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Let’s hope Kelly Bayer Rosmarin is the only chief executive of a company that provides a critical service who did not plan for the worst-case scenario.
The Optus chief faced a furious Senate inquiry on Friday about the complete shutdown of the Optus network last week.
The most shocking revelation was that Australia’s second biggest telecommunications company has never crisis-planned for that exact event occurring.
It’s certainly something that her competitors and the big four banks prepare for on a semi regular basis, as the consequences can be dire. In this case 228 emergency triple-0 calls couldn’t get through. Businesses couldn’t take payments. Families in hospitals couldn’t connect.
And let’s face it, the South African-born Optus boss should be an expert when it comes to crisis management. It was only last year Australia’s second biggest telco suffered one of the nation’s worst data breaches in history, with about 10 million customers, roughly 40 per cent of the country’s population, affected.
The knives are certainly out for the CEO, who dodged questions on Friday about whether she was considering resigning. Of course she would be, and Senator Ross Cadell from the Nationals clumsily suggested she should.
Optus’s Singapore-based owner SingTel may well have asked her to “consider her options”.
The Optus outage left nearly half the population without phones or internet last Wednesday, causing train stoppages, daycare shutdowns, raising fears of another major hacking event, and showing the nation how vulnerable it is when communications systems stop working.
Optus director of networks Lambo Kanagaratnam told the inquiry the nation’s No. 2 telecommunications company “didn’t have a plan in place for that specific scale of outage… it’s not something that we expect to happen.”
But by late Friday, the Optus media team sort to clarify the statements made to the Senate hearing by Mr Kanagaratnam, which were undisputed by Ms Bayer Rosmarin, saying that while the company wasn’t prepared for ‘this outage, there is a broader risk management plan in place that does contemplate a mass outage.”
Perhaps it was one that the CEO and head of networks were just not aware of. There is a lesson in that to be learned.
Perhaps there was also a lesson missed with the CEO on why she did not hold a press conference at any stage on the Wednesday in question to explain what Optus knew and didn’t yet know at the time about the shutdown.
“I wanted to ensure that before I spoke, and given how little information we had about the cause and potential restoration time, that we could at least rule out the possibility of malicious activity to reassure our customers and the nation,” she told the inquiry.
Fair enough for the first few hours, but the CEO still did not face the public after ruling out that scenario at around 10am.
“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 told the inquiry.
Ms Bayer Rosmarin couldn’t explain adequately why she did not hold a press conference at any stage on Wednesday to explain what Optus knew and didn’t yet know about the shutdown.
“I wanted to ensure that before I spoke, and given how little information we had about the cause and potential restoration time, that we could at least rule out the possibility of malicious activity to reassure our customers and the nation,” she told the inquiry.
In a curious coincidence, the board of SingTel were in town on the day of the system failure, as they were when the data breach occurred. The CEO said that was something that was also being investigated that frantic morning in terms of cyber criminality.
While Ms Bayer Rosmarin didn’t say it, it’s far more likely to be the reason she didn’t hold a press conference.
Singtel is majority-owned by Temasek Holdings, the investment arm of the Singapore government. Culturally different to Australia – with vastly different public expectations – the Singaporean manner is not to front up to what would have been a dartboard experience for the CEO when she did not have any answers.
As for the triple-0 call failure, Ms Bayer Rosmarin was very keen to spread the blame, saying she was responsible for the Optus shutdown but that the system should have worked regardless, and that “others” were responsible for that.
Presumably the “others” is Telstra, which operates the service, under the authority of the Australian Communications and Media Authority. That allegation of sorts in the inquiry led to some head scratching at Telstra, which is understood to have put through all triple-0 calls it received.
Compensation for businesses who were shut down for the day was another hot topic at the inquiry and Ms Bayer Rosmarin was keen to explain that 8500 customers and small businesses had reached out.
She said there were claims afoot for as much as $430,000 in compensation to be paid out and $36,000 already paid out. Weirdly enough she could not confirm if this figure was in cash or in kind.
So what was the big learning for Optus to come from this event?
Apart from the obvious need to prepare a plan for what to do should another total shutdown occur, the senators wanted to know why all its customers couldn’t have been temporarily shifted across to another provider.
“Is this about protecting your own profits ahead of the customer?” posed an obviously furious inquiry chair Sarah Hanson Young.
Ms Bayer Rosmarin said that this was not technically achievable at the time.
After a bruising day in Canberra, it is very likely Ms Bayer Rosmarin is once more considering where her future lies.
She told politicians she has a “very real, lived experience” of the crisis.
It’s just possible she might not want to wait for another to occur.
More Coverage
Originally published as Optus CEO Kelly Bayer Rosmarin’s future in doubt: no crisis planning for shutdown
Whyalla steelworks losing $1m a day but Gupta’s defiant
Sanjeev Gupta says his broader business has been propping up the Whyalla operations to the tune of $1m a day which is a sign of the commitment he has to the South Australian steel town.
Why an Aussie banker landed a key role in this succession drama
This former Melbourne boy and Wall Street boss is now in charge of steering Disney through one of the toughest succession stories in corporate America.