What Optus’s poaching of NBN boss Stephen Rue really reveals

Optus and its Singapore-controlled parent Singtel say they on a mission to restore customer trust after 2022’s cyber attack and last year’s outage. But its appointment of NBN boss Stephen Rue reveals a greater strategy.

NBN Co boss Stephen Rue will start as Optus’s CEO in November. Picture: Britta Campion/The Australian

Singtel’s poaching of NBN boss Stephen Rue to be the next chief executive of Optus reveals much about the Singapore telco’s plans for its troubled Australian subsidiary and how it plans to win back trust.

Singtel and Optus talked up Rue’s telecommunications credentials, while Rue said: “My job will be to take care of Optus’s customers, people and business and to provide strong competition and choice”.

While Rue does have telco experience – having spent the past 10 years at the government-owned NBN Co, serving initially as its finance boss before being appointed its chief executive in September, 2018 – it is as a wholesaler, not a retailer.

The only customers NBN Co faces are other telcos, not everyday Australians – the people that Optus is so desperately seeking to win back trust after last November’s national outage and late 2022’s cyber attack.

Or so it all seems.

Singtel’s management are no fools, despite the clumsy management around last year’s network meltdown that ultimately led to Optus’s former chief executive Kelly Bayer Rosmarin’s resignation.

Singtel knows exactly what it is doing in appointing Rue – and the priority doesn’t seem to be mums and dads across Australia.

Rue survived two changes of government, seamlessly transitioning from the Morrison to Albanese era, and he is well regarded among policymakers in Canberra. This is where Singtel and Optus have their sights set, appearing to be more concerned about any regulatory crackdown than a retail customer backlash.

Then there is Rue’s deftness with numbers. Amid the outages fallout, Singtel was in talks with Canadian private equity behemoth Brookfield about a potential selldown. Those discussions collapsed but Singtel has made it clear that it is willing to part with Optus if the price is right. Rue’s ability to manage financial performance make’s his appointment as chief executive – after a “rigorous process” all the more clearer.

If it were customers that Singtel and Optus were focused on, they wouldn’t be fighting so hard to keep a Deloitte report into 2022’s disastrous cyber attack that led to theft of sensitive personal data from 10 million Australians.

Federal Court judge Jonathan Beach rejected Optus’s argument last year that the report was protected by legal privilege, and ruled it should not be kept out of a Slater and Gordon class action brought in Victoria. And yet, Optus is appealing against that decision, arguing last Tuesday that most would be “gobsmacked” to find a media release would flag a legal purpose for such a report because of a possible class action or a potential regulator investigation.

“(The Deloitte report) was produced pursuant to engagement by Ashurst, which explicitly nominated the dominant purpose as legal advice,” Optus’s barrister Steven Finch, SC, said.

Sure, but try telling that to the Australians who had sensitive details, including drivers licence, passport and Medicare numbers and personal addresses stolen – exposing the identity theft and online fraud. All they want to know is what happened and what is Optus doing to keep their data safe to avoid a repeat episode.

A better strategy would be to adopt a similar approach that Qantas – who poached Optus’s corporate affairs boss Danielle Keighery before she even started at the telco – took over its ghost flights fiasco. The airline settled the dispute with the Australian Competition and Consumer Commission for $120m earlier this month, largely so it could draw a line under the issue and move on – something Optus and Singtel have an inability to do. More important, its shows you are willing to level and be more transparent with customers rather than treat them like mugs.

Last week, Optus announced that it achieved a new speed record with Nokia over its long-haul fibre network. But that doesn’t really matter if it can’t show how it can keep customer data safe or what caused the cyber attack. So long as Optus has the cyber attack and outage fallout hanging over it, it will overshadow its more positive news.

Singtel appears to have given Rue more latitude to run Optus as he sees fit, reporting to Optus chair Paul O’Sullivan instead of Singtel management in Singapore. But that is largely window dressing. O’Sullivan reports to Singtel and indeed was chairing what is essentially an advisory board during the cyber attack and national outage.

The real test will be what action Rue takes when he starts in November, and how much Singtel will really loosen its leash.