Kelly Bayer Rosmarin ended her more than three-year tumultuous tenure as the CEO, after being under pressure having headed Optus through two national scandals that have tarnished the reputation of the Australian telecom giant.
Optus Telecommunications, Australia’s second biggest telecom company rendered the Australians network-less after their network had a 12 hour blackout through out the region. According to the sources this is not the first time this has happened.
Optus’ CEO; Kelly Bayer Rosmarin has decided to quit the position after a tumultuous 3 year tenure as the boss. Her 3 year tenure saw Optus’ reputation go up and down the rollercoaster after the scandals broke out.
In a statement, the now-former CEO of Optus Telecommunications said it had been “an honour to serve” but it was now appropriate for her to step down. “Having now had time for some personal reflection, I have come to the decision that my resignation is in the best interest of Optus moving forward,” the statement added.
Optus’ parent company, Singapore Telecommunications, announced Rosmarin’s resignation days after a network-wide outage left nearly half of Australia’s 26 million people without phone or internet for 12 hours.
The chief executive of Optus’ Singaporean parent company, Yuen Kuan Moon thanked her for her hardwork during a “challenging period,” referring to how she contributed to improving financial performance despite being appointed at the beginning of the pandemic, in 2020.
Rosmarin’s resignation also came after a parliamentary hearing on Friday (Nov 18) where Optus executives admitted that they had no contingency plan for an outage of that scale.
The recent outage not only sparked anger and frustration among Australians but also raised concerns about the country’s telecommunications infrastructure.
Notably, the company is also in the midst of fighting another class action lawsuit brought by more than 100,000 current and former customers over a massive data breach last year which affected 10 million people and is believed to be the worst one in Australian history.
In the meantime, Rosmarin will be replaced by the company’s Chief Financial Officer (CFO) Michael Venter while the firm looks for a replacement, as Optus Telecommunications works on regaining customer confidence.
More about Optus Telecommunications
Singtel Optus Pty Limited (commonly referred to as Optus Telecommunications) is an Australian telecom company headquartered in Macquarie Park, a suburb in the Northern Sydney region of Sydney, New South Wales, Australia. It is a wholly owned subsidiary of Singaporean telecommunications company Singtel.
Optus is the second largest wireless carrier, with over 10 million subscribers as of 2022, and its mobile network covers 98.5% of the Australian population. Optus Telecommunications gained the second general carrier licence in January 1991.
After privatisation, AUSSAT became Optus and its first offering to the general public was to offer long-distance calls at cheaper rates than that of its competitor Telstra. The long-distance calling rates on offer were initially available by consumers dialing 1 before the area code and phone number. Following this, a ballot process was conducted by then regulator AUSTEL, with customers choosing their default long-distance carrier. Customers who made no choice or did not respond to the mailout campaign automatically remained as a Telstra long-distance customer.
Customers who remained with Telstra could dial the override code of 1456before the area code and phone number to manually select Optus as the carrier for that single call. Since 1 July 1998, consumers have the choice of preselecting their preferred long-distance carrier or dialling the override code before dialling a telephone number.
The group began by building an interstate fibre optic cable and a series of exchanges between Optus’ interstate network and Telstra’s local network. It also laid fibre optics into major office buildings and industrial areas, and focused on high bandwidth local, (interstate) long distance, and interstate calls for business.
In its early years, Optus was only able to offer local and long-distance calls to residential customers through Telstra’s local phone network. Telstra would carry residential to residential calls to Optus’ exchanges, and then the calls would be switched to Optus’ long-distance fibre optic network. Optus was the main sponsor of the 1997 ARL Season.
What are the scandals associated with Optus Telecommunications?
Notably, there have been 2 nation wide scandals with the telecom company which have eventually tarnished their name in the industry.
The Personal Data Hacking Scandal
Optus suffered a massive cyber-attack in 2022, with the personal information of customers stolen, including names, dates of birth, addresses, and contact details.
The telco suffered the data breach when hackers, believed to be working for a criminal or state-sponsored organisation, accessed the sensitive information by breaking through the company’s firewall.
The Australian Cyber Security Centre joined hands with Optus Telecommunications to lock down its systems, secure any data against further breaches, and trace the attackers. The Australian federal police and the Office of the Australian Information Commissioner were also notified
Optus has over 9.7 million subscribers, according to publicly available data, but the company said it was still assessing the size of the data breach.
The company confirmed information which may have been exposed included Optus customers’ names, dates of birth, phone numbers, email addresses and, for a cohort of customers, physical addresses and identification document numbers such as driving licence or passport numbers.
Optus said payment details and account passwords were not being compromised, and that services, including mobile phones and home internet, were not affected.
The company insisted voice calls had not been compromised, and that Optus services remained safe to use and operate.
“We are devastated to discover that we have been subject to a cyber-attack that has resulted in the disclosure of our customers’ personal information to someone who shouldn’t see it,” Optus chief executive Kelly Bayer Rosmarin said.
“As soon as we knew, we took action to block the attack and began an immediate investigation. While not everyone may be affected and our investigation is not yet complete, we want all of our customers to be aware of what has happened as soon as possible so that they can increase their vigilance. We are very sorry and understand customers will be concerned. Please be assured that we are working hard, and engaging with all the relevant authorities and organisations, to help safeguard our customers as much as possible. Optus has also notified key financial institutions about this matter.
While we are not aware of customers having suffered any harm, we encourage customers to have heightened awareness across their accounts, including looking out for unusual or fraudulent activity and any notifications which seem odd or suspicious.” Former CEO Bayer Rosmarin further added.
The False Internet Speed Claims Scandal
An Australian court has ordered three telecom companies to pay AUD$33.5 million ($22.08 million) in fines for making false news regarding the speed of NBN internet plans.
According to the Australian Competition & Consumer Commission (ACCC), the country’s federal court fined Optus, Singapore’s Telecommunications $13.5 million and ordered Telstra to pay A$15 million. Further, a unit of TPG Telecom has also been ordered to pay A$5 million.
The ACCC claimed that the false and deceptive statements regarding their 50 or 100 Megabits per second (Mbps) fibre to the node plane were made at least 12 months in the year 2019 and some believe that it might have continued till 2020.
The three telecom companies have admitted in the court of providing false or misleading claims which might have affected nearly 120,000 subscribers.
The company said, “We’ve gone through an extensive remediation and refund process. We’ve also taken a number of steps to ensure we better meet our regulatory obligations.”
In a statement, Telstra admitted that from April 2019 to April 2020, it was unable to fully check the highest achievable speed of the NBN services of nearly 48,000 individuals.
However, in response to the issues raised, representatives of TPG and Optus told Reuters that they have sent separate emails mentioning that they have modified their systems and procedures. Optus said that it will personally get in touch with its customers who qualify for remediation.
The telecom space is very fragile to such scandals; How has India survived in this industry?
Australian Telecom industry was overtly dependent on Optus Telecommunications. The company has over 98% of the audience; meaning there is no competition.
In India, Jio might be the most successful telecom company but still faces competition from Airtel and Vodafone. The realisation of competition and fear of losing consumers within a blink keeps every company in-line hence always innovating for the USP.
In Optus’ case there was no competition. There was but only one lion in the jungle and psychologically the company thought there was no threat to their position amid the public.
The fear of losing consumers is actually the reason why there haven’t been such scandals in India.
Australia really needs to invest in this industry and make this a very secure place. Recently, Jio wanted to expand operations abroad; with the awakening of the weakling in Australia’s telecom sector, do we see Jio investing in Australia?