Why Optus chief executive resigned

Optus CEO Senate Inquiry
Kelly Bayer Rosmarin resigns from Optus after outage, senate grilling . Picture: NCA NewsWire / Martin Ollman

Kelly Bayer Rosmarin has resigned from Optus, days after she faced a grilling from senators over the telco’s outage that impacted 10 million Aussies.

The announcement was made on Monday in a statement from Optus’ parent company Singtel.

Optus itself has not yet mentioned Ms Bayer Rosmarin’s resignation nor produced their own statement.

When one was requested, the telco sent the Singtel release.

In that statement, Ms Bayer Rosmarin said it had been an honour to serve as the company’s chief executive but it was appropriate she now step down.

Her resignation comes after Australians were cut off from internet and phone services during the 12 hour outage on November 8, with about 200 customers unable to make emergency calls to triple-0.

A senate inquiry into the outage was set up and, on Friday, Ms Bayer Rosmarin fielded questions about her future at Australia’s second largest telecommunications provider.

Optus CEO Senate Inquiry
Kelly Bayer Rosmarin faced a grilling at a senate inquiry into the November 8 outage on Friday. Picture: NCA NewsWire / Martin Ollman

“On Friday I had the opportunity to appear before the Senate to expand on the cause of the network outage and how Optus recovered and responded. I was also able to communicate Optus’ commitment to restore trust and continue to serve customers,” she said.

“Having now had some time for personal reflection, I have come to the decision that my resignation is in the best interest of Optus moving forward.

“It’s been an honour and privilege to lead the team at Optus and to serve our customers.”

She was appointed to the role in April 2020 and this month’s widespread outage came after a major data breach last year that exposed the personal data of 10 million Australians and triggered multiple investigations and a class action lawsuit.

The group chief executive of Singtel, Yuen Kuan Moon, acknowledged Ms Bayer Rosmarin’s work over the past three years at the helm of Optus.

“We acknowledge her leadership, commitment and hard work throughout what has been a challenging period, and thank her for her dedication and service to Optus,” Mr Yuen said.

Optus CEO Senate Inquiry
Ms Bayer Rosmarin had been in the role since April 2020. Picture: NCA NewsWire / Martin Ollman

“Kelly has always led with integrity and had all stakeholders’ best interests at heart. We understand her decision and wish her the very best in her future endeavours.”

Optus’ chief financial officer Michael Venter has been appointed interim CEO as the company “embarks on a global search for a new CEO”.

Prime Minister Anthony Albanese said Ms Bayer Rosmarin’s resignation was “not surprising” considering the circumstances.

“This was a shocker ... Millions of Australians, and so many businesses, simply were left without information about what was going on,” he told Sky News.

“The CEO has resigned. That of course, is not surprising given the circumstances which are there.”

Communications Minister Michelle Rowland wished Ms Bayer Rosmarin well and said it was “no doubt” a difficult decision for her to make.

“The Optus outage experienced earlier this month caused significant disruption to the community, particularly small businesses. We need to learn the lessons to ensure industry and government is as prepared as possible, given no network is fully immune,” Ms Rowland said.

“The government has announced it will conduct a post-incident review and we will make further announcements about the terms of reference in due course.”

During her appearance before the Senate on Friday, Ms Bayer Rosmarin admitted that Optus’ performance on November 8 was “not acceptable”.

Ms Bayer Rosmarin said it was “indisputable that on that day our performance was not acceptable”.

More than 10 million Australians were impacted by the Optus outage on November 8. Picture: NCA NewsWire / Flavio Brancaleone

“We let you down, and for that I am deeply sorry. I want to make it clear that we have taken immediate and ongoing steps to rectify any shortcomings,” she said.

She confirmed to the inquiry that it had taken Optus days to determine what had caused the outage.

Ultimately, it found that key routers had disconnected from the network during a scheduled upgrade.

Greens Senator Sarah Hanson Young, chair of the senate inquiry, thanked Ms Bayer Rosmarin for “fronting up in person” to answer questions.

“This was never about which individual is CEO, this is about ensuring millions of Australians have access to what is an essential service; including the ability to call 000 in an emergency, access government services, contact loved ones, and make and take essential payments,” Senator Hanson-Young said.

“The senate inquiry will continue to focus on solutions, including stronger regulations for telecommunications companies, so that in the evident of outages and network failures the community can have confidence that their public interests and safety is protected.”

In other changes at the telco, Optus business managing director Peter Kaliaropoulous will enter into a newly created position, chief operating officer, from Wednesday.

Optus CEO Senate Inquiry
She faced a grilling by senators. Picture: NCA NewsWire / Martin Ollman

Lashed for not fronting media sooner

Optus had been widely lashed for failing to adequately communicate with customers during the outage, and in the weeks since.

During her grilling by senators on Friday, Ms Bayer Rosmarin defended not appearing publicly earlier on the day of the outage, telling the inquiry her focus had been on the company’s response to the incident.

She said she wanted to affirm the outage wasn’t a result of a “malicious or ongoing attack” before speaking.

Once that was ruled out about 10.20am on the day, Ms Bayer Rosmarin said she began speaking publicly, giving 11 radio and TV interviews and four print journalist interviews.

Ms Bayer Rosmarin denied suggestions she should have fronted up earlier, claiming it was “very unusual” for a chief executive to appear in the media during an outage.

“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 team to resolve the issue,” she said.

“Our communications team was giving updates to the media fielding questions, and the team had the view at the time that this was being covered widely and all our customers knew what we knew, which is that the network was down, that we were working on it, and that we were very sorry.”

Reputational damage ‘impossible to recover’

Marketing and tech experts had warned in the wake of the outage that the reputational damage caused by the outage may be almost impossible to recover.

Andrew Hughes, marketing expert at the Australian National University, said Optus had lost a billion dollars on their brand valuation according to a brand finance report.

“They’re billion dollar mistakes, they really are,” he said.

Optus has been rocked by two scandals in the past 14 months. Picture: NCA NewsWire / Flavio Brancaleone

Dual scandals that spelled the end

Before there was the November 8 outage, there was the 2022 data breach.

Optus’ technical team noticed and investigated suspicious activity on its network on September 20. The following day, a data breach was identified and regulators were informed.

The telco did not go public until September 22, and then recommended people pay increased attention to fraudulent activity. At the time, Optus said it did not know if the breach had caused any harm.

In fact, the records of up to 9.7 million current and former customers had been hacked. In some cases that included drivers licences, passport and Medicare details – leaving customers at risk of fraud.

The telco claimed a complicated breach had occurred, but Cyber Security Minister Clare O’Neil accused Optus of making an error and leaving the “window open” for hackers to climb through.

Optus and the Australian Federal Police opened a criminal investigation.

In the aftermath, a ransom was issued demanding Optus pay $1.5m or else the personal information of impacted customers would be slowly leaked.

The breach triggered a class action lawsuit and multiple investigations from regulators.