Singtel summoned by Australia as penalty over fatal Optus outage looms

SYDNEY - Australian Communications Minister Anika Wells summoned Singtel to a meeting following a fatal outage at its Optus division, warning that the blunder was likely to lead to major financial penalties.

Ms Wells said she has asked to speak to Singtel when a company delegation is in Australia next week.

“This remains a constant watch for me,” she told the Australian Broadcasting Corp on Sept 25. “Meeting with Singtel is an important step.”

In response to queries sent by The Straits Times, Singtel said its group chief executive Yuen Kuan Moon will be in Sydney next week for a meeting as a member of the Optus board, and as it supports management through the incident.

He is scheduled to meet Ms Wells together with Optus board chairman John Arthur and Optus CEO Stephen Rue.

The statement sent on Sept 25 said: “Singtel takes this matter seriously and will extend full cooperation to the Australian government and the authorities to address the Optus issue.”

Ms Wells’ demand ratchets up pressure on Singtel to take action after the

Sept 18 emergency call outage led to four deaths.

The failure – the result of a botched network upgrade – has turned into a reputational crisis for Optus, which is struggling to contain the fallout from multiple missteps.

It came less than two years after a similar incident at Optus impacted millions of customers across Australia, leading to a fine of A$12 million (S$10 million) for the company.

The latest crisis has raised speculation that Optus and Singtel have failed to invest adequately in the Australian network.

It also suggests Optus has failed to implement recommendations that followed the 2023 incident, Ms Wells said, adding that the company “can expect more significant fines”.

Optus, Australia’s second-largest phone company, accounts for half of parent Singtel’s revenue.

Singtel said on Sept 24 that it has supported Optus by investing more than A$9.3 billion in the past five years, with a large proportion going towards building network infrastructure across Australia.

Ms Wells’ comments came after Australia’s Federal Court imposed a A$100 million penalty on Optus for unconscionable sales practices, including pressuring people with disabilities and limited financial literacy into buying products they did not need or could not afford.

Optus’ investigation

Optus has attempted to manage the latest crisis with a steady feed of information, while its own investigation establishes what led to about 480 customers being unable to reach emergency services.

The company is trying to establish why so many callers were left stranded and whether there was a pattern to the failures, Mr Rue said on Sept 24.

A firewall upgrade program had been due to be completed over two nights, Mr Rue said.

But some normal steps were not followed, and calls were not diverted to a separate part of the network in the way they should have been, he said.

Optus has named long-time business executive Kerry Schott to lead an independent review into the outage to identify the causes of the failure.

Her review will also examine the operational management of Triple Zero calls on Optus’ network, and consider what the phone company did in response to the incident.

The review is expected to be completed before the year end, and Optus’ board will make the report public after considering the findings, the company said.

Singtel shares closed 0.23 per cent, or one cent, up at $4.27 on Sept 25. They were down 1.84 per cent for the week since Sept 18. BLOOMBERG