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Stephen Rue is moving from NBN Co to join Optus. Photo: Supplied

Days after a review of its recent major outage outlined a laundry list of industry reforms, embattled telecommunications giant Optus has recruited erstwhile NBN Co CEO Stephen Rue to turn around its fortunes after two horror years that have included fines, data breaches, and a major outage.

In November, Rue will take the helm of the company, whose former CEO Kelly Bayer Rosemarin resigned in November – just weeks after it was revealed that the company had no resilience plan to protect its customers during an 8 November outage that took down more than 10 million consumer and business services.

Topping Rue’s to-do list will be the implementation of a new governance model that will give the Australian company greater independence from its Singapore based parent company, SingTel, by having Rue sit on an Optus Board to which Optus executives will directly report.

That board and executives, the company said in a statement announcing Rue’s appointment, “will work together to reset strategy and rebuild customer trust in the Optus brand” – which, recent Telecommunications Industry Ombudsman (TIO) figures show, took a hit as customers vented.

Rue’s appointment comes after a decade at NBN Co, which he joined as chief financial officer (CFO) in 2014 before becoming CEO in 2018.

During his tenure with the National Broadband Network (NBN) operator, Rue guided the company through dramatic change including a pandemic-era surge in demand; the putative completion of the network in 2021; reshaping NBN Co’s products, services, and workforce to fight competition from the likes of satellite operator StarLink; shifting from a focus on preparing for problematic privatisation to boosting performance and reliability; fast-tracking a network-wide upgrade from legacy copper to fibre to the premises (FTTP) services; and securing government and industry approval for a dramatically different Special Access Undertaking (SAU).

Rue’s pedigree as both CFO and CEO, backed by his operational experience in driving dramatic change at NBN Co “will serve us well as we reinvigorate Optus as Australia’s leading challenger telecommunications brand,” Optus chair Paul O’Sullivan said.

“We expect Stephen’s operational and financial background to lift service standards significantly for the benefit of our customers.”

Changing of the NBN Co guard

Rue’s acceptance of the Optus leadership means NBN Co now has six months to find a replacement, who will inherit a forward-leaning wholesale network operator that is rapidly transitioning towards providing faster, more profitable services over an expanding FTTP network as it progressively mothballs the problematic outdated copper network with which the company was saddled after the Coalition took government in 2013.

Rue “has consistently delivered against challenging targets and has fostered a strong culture of purpose, innovation, collaboration, and excellence within the company,” NBN Co chair Kate McKenzie said as Rue’s resignation was announced.

“NBN is making significant progress in upgrading the network, increasing the availability of higher speeds, and providing greater capacity and reliability.”

NBN Co CFO Philip Knox will serve as interim CEO until Rue’s replacement is named, while Optus CFO Michael Venter will continue as interim CEO of that company until Rue takes over.

A rapidly changing market – pressured by surging customer demand for bandwidth that shows no signs of stopping – will keep the pressure on both NBN Co’s new CEO and Rue, who as CEO of NBN Co’s second largest customer will remain intimately engaged with the wholesale operator’s future direction.

Yet much of his initial time at Optus will undoubtedly be occupied with cleaning up from a string of disasters that have left the company reeling after a 2022 data breach that remains among Australia’s largest and has catalysed efforts to overhaul Australian privacy regulations; shortcomings that led to a $1.5 million fine for non-compliance with emergency services regulations; and poor operational procedures that saw a simple software upgrade snowball into a nationwide telecommunications blackout that prevented nearly 2,700 people from reaching Triple Zero operators.

Those shortcomings triggered a major review of telecommunications policy, to which the government recently responded by accepting all of its 18 recommendations and rallying a range of industry and regulatory bodies to work together for fundamental reform.