Optus poaches NBN boss Stephen Rue as next CEO
Australia’s second biggest telco has tapped the head of the government-owned NBN to become its next CEO, replacing Kelly Bayer Rosmarin.
Optus has poached NBN boss Stephen Rue as its next chief executive, hiring the NBN veteran to “lift service standards significantly” at the embattled telco.
Mr Rue’s appointment arrives six months after former boss Kelly Bayer Rosmarin’s November departure after she fronted a bruising senate inquiry into the telco’s national outage, which cut off more than 10 million Australians, leaving almost 2700 unable to contact triple-0.
It was the second crisis to hit the company under Ms Bayer Rosmarin’s leadership after it suffered one of Australia’s largest data breaches in late 2022.
Optus also recently lost its managing networks director Lambo Kanagaratnam, who fronted the heated senate inquiry alongside her. He is yet to be replaced.
Alongside the appointment, Singtel announced a major restructure of its executive reporting lines, after it wrote off almost $US2.5bn ($2.8bn) on its troubled Australian subsidiary last week. Mr Rue will report directly to Optus’s board, chaired by Paul O’Sullivan, rather than Singtel management as Ms Bayer Rosmarin had.
That marks a significant milestone for the telco, which has long been slowed down in its response to major events, including the national outage and data breach, as it awaited Singtel approval.
Mr O’Sullivan said Mr Rue — who will begin as Optus boss in November — was selected after a “rigorous process that involved a slate of high-quality candidates. We’re extremely pleased to have someone of his calibre to lead the next chapter at Optus.
“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,” Mr O’Sullivan said.
“We expect Stephen’s operational and financial background to lift service standards significantly for the benefit of our customers.”
It took Australia’s second largest half a year to decide who would lead it next, but Mr Rue said he was “honoured and excited to be given the opportunity to lead Optus”.
He joins Optus after a 10-year career at NBN, initially brought on as finance boss before being appointed the government-owned telco’s chief executive in September, 2018.
“Optus’ continuous investments in critical infrastructure through the years has resulted in an extensive 5G network that is being strengthened in regional Australia. My job will be to take care of Optus’ customers, people and business and to provide strong competition and choice,” Mr Rue said.
“I look forward to accelerating the transformation at Optus so fellow Australians continue to have the choice of a strong alternative telecoms provider and the country as a whole can harness the power of digital connectivity to drive economic participation and social inclusion.”
Singtel Group chief executive, Yuen Kuan Moon, said Mr Rue was tapped to help restore Optus and “cement its position as a leading player in the Australian telecommunications market”.
“We are extremely excited to have Stephen, with his deep understanding of the industry and strong operational experience, to take Optus forward,” he said.
“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.”
The appointment arrives fresh on the back of Optus announcing a $1.6bn network-sharing deal in regional Australia with the nation’s third largest telco TPG.
Optus expects to receive total service fees of approximately $1.19 bn over the 11-year term of the agreement, with incremental cash flows of approximately $900m expected over the same period.
Opposition communications spokesman David Coleman has been critical of the NBN’s satellite services, with the number of connections diving by 21,000 or almost 20 per cent in the first quarter of 2024.
Instead of Mr Rue’s leadership, Mr Coleman blamed the Albanese government.
“We’re seeing the NBN satellite numbers in a literal ‘skyfall’ under this government. Elon Musk’s Starlink service is smashing the NBN. And other similar services are coming,” Mr Coleman said.
“We are witnessing the start of the era of low earth orbit satellites in Australia – and the ongoing decline of the NBN Sky Muster service.
“I was recently at a communications forum at Mundaring in WA where frustrated locals were describing how Starlink was delivering better coverage. This was a fringe urban area less than an hour out of Perth. It’s an issue I’ve heard in other areas, such as the Dandenongs near Melbourne.”
Mr Coleman was critical of the government’s decision to appoint a committee in late 2022 rather than take action to arrest the decline.
“While NBN satellite customers continue to plummet under this government, we’re not seeing any action. The government’s response to this massive strategic issue for the NBN was to simply establish a committee back in October 2022 — but it doesn’t appear to have actually done anything.”
Optus chief financial officer Michael Venter will continue to act as the telco’s chief executive until Mr Rue starts later this year.
“I would like to thank Michael Venter for his leadership as acting CEO during this interim period,” Mr O’Sullivan said.
“He has been unstinting in his efforts to rebuild customer trust and strengthen the business and will remain an asset to Optus going forward.”
NBN board has advised that chief financial officer Philip Knox will become the interim CEO in due course, until a new CEO is appointed, according to a statement from Communications Minister Michelle Rowland.
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