Telstra boss Andy Penn warns of evolving cyber threats

Telstra CEO Andy Penn: ‘As distressing as the physical war is – and it is – we can all assume that is only part of the story. It is ­really important people are extra cautious now.’

In the week Ukraine faces the full force of Russia’s tanks, missiles and cyber-attacks, Telstra CEO Andy Penn is in Europe at the ­Mobile World Congress hearing first-hand of the carnage a rogue player can bring to national security and communications systems.

“Everybody is incredibly distressed to see what’s happening in Ukraine,” Penn tells The Aus­tralian. “GSMA (the global peak body for mobile operators) banned and cancelled the Russian pavilion and Russian delegates at the ­conference.

“As distressing as the physical war is – and it is – we can all assume that is only part of the story. It is ­really important people are extra cautious now.”

In a speech overnight on Monday, Penn describes the events in Ukraine as a chilling reminder of how the threat landscape continues to evolve. He warns that cyber ­malicious activity can hit a specific target, but often it targets vulnerabilities in applications that can hurt individuals and businesses operating anywhere in the world.

Asked about attacks on companies outside Ukraine that are caught up – either through sanctions or by being on the “wrong side” – Penn is cautious.

“Obviously there are things I can’t say,” he says. “You shouldn’t assume that everything you are seeing in the physical world is the whole story. Talking to global counterparts, there is absolutely increased activity.”

There are stark parallels between Russia marching into Ukraine and fears of China taking back control of Taiwan. Telstra’s acquisition last year of Digicel, the dominant telco for Papua New Guinea and the Pacific Islands, makes it a critical player in regional security.

Telstra has the main contract with the Australian government’s defence department and Penn himself chairs the government’s Industry Advisory Committee on national cybersecurity.

Telco infrastructure is the backbone of Australia’s trillion-dollar digital economy.

Penn says this is why the government introduced new legislation recently to protect critical infrastructure and systems of ­national significance.

The telco chief is reluctant to expand on how the government’s support for Telstra’s acquisition of Digicel raises the bar throughout the Pacific. “I won’t comment specifically on the details of the partnership, but with all of our infrastructure, wherever it is, the government and ourselves are very in focus. It’s about lifting cyber defences around our critical infrastructure,” he says.

On Sunday, governments around the world blocked Russia’s access to the SWIFT network for financial transactions globally. It is now expected that cash with dubious provenance, from criminals to dictators, will move onto the cryptocurrency network.

“You could surmise that as well as I,” says Penn.

“Whatever their use or motivation, crypto is much more opaque and not as subject to stringent regulations that sit around international money transfers.”

The Penn-led cybersecurity committee recommends lifting the whole regulatory environment around crypto, particularly digital currency exchanges. The committee is launching a new paper addressing crypto on Tuesday.

After two years of lockdowns, Penn is back at the congress to showcase a very different Telstra after what he calls one of the fastest and most ambitious transformations in the world, with T22.

The case study will be watched closely by global peers that have also built up complex legacy tech, products and services and are trying to meet the growing demand for connectivity.

Penn told delegates that all too often telcos have left too much value on the table, providing a platform for growth for others to realise most of that value. We can’t let that happen again, he told them.

“We know we are sitting on the cusp of another major advancement, the metaverse, Web 3,” he tells The Australian. “However that plays out, it is going to drive increasing bandwidth and connectivity demands, so how do we position ourselves as telcos to take advantage of that?”

“Our massive simplification and digitisation of the business has put us in a much stronger position to capitalise on this period ahead. That’s what the whole industry is wrestling with.”

For the Telstra chief, there is nothing like simplifying your business to improve overall resilience. Complexity of the past and hard-to-patch systems with outdated security protocols can be the undoing. But all the time, cyber criminals are finding new ways to cause chaos. It is an arms race.