Optus’ stagnation begs leadership change


opinion Last weekend, long-time Optus chief executive Paul O’Sullivan delivered a rare landmark speech on the past, present and future of Australia’s telecommunications sector, with the intention of reinvigorating what he said had become its stunted industry debate.

He couldn’t have had a more captive or receptive audience; about 60 journalists, representing almost every technology media outlet in the nation, had flown from all around Australia that morning to attend the Kickstart Forum on the Gold Coast. O’Sullivan’s was the keynote speech (watch it in full here) which would kick off three days of intense debate about Australia’s ICT sector.

And in some senses O’Sullivan delivered.

The Irish-born telco chief’s notorious good humour, deep industry knowledge and leadership gravitas were all turned up to maximum as he warmed up the audience and spiked our intellect with nuggety morsels of delicious telco insight. It was almost as though the O’Sullivan of old — the one who mischievously delighted in pulling Sol Trujillo’s nose — was back, after a long period of pale convalescence associated with his 50th birthday last year.

But as the speech wore on, I grew increasingly perplexed by its subject matter.

You always expect an Optus executive to land blows on the old nemesis Telstra during a major speech. But after doing so, O’Sullivan went into some unexpected areas … calling for NBN Co’s management to be outsourced just as the fibre rollout is kicking into gear and demanding an independent oversight body be set up to regulate the fledgling fibre telco, just as parliamentary committees serving the same function have been approved.

Apple and Google, too, came in for their fair share of Irish scorn, with O’Sullivan bemoaning Apple’s closed iTunes ecosystem and wondering aloud whether the traffic to sites such as Google and eBay could be auctioned off to the highest bidder.

Some of the ideas which O’Sullivan proposed were innovative — even revolutionary. And I have no doubt that his intent with his speech was to propose out-of-the-box thoughts that might stimulate the national telecommunications debate into bold new areas. But for me, they did nothing more than confirm my suspicions about just how distant the Optus chief is from the current debate in his sector … and his customer’s impressions of his company.

There is, flatly, no way that Communications Minister Stephen Conroy would ever oust NBN Co’s stellar management team led by Mike Quigley for a bunch of guns for hire, just as its fibre rollout is starting to deliver. And as Quigley pointed out recently, NBN Co already has plenty of oversight. Furthermore, the idea that Google or eBay should surrender any of their hard-won internet traffic to their competitors … is an idea as uncompetitive as it is imbecilic.

Can you imagine the reaction from Mountain View if Google was asked if it would insert links to Microsoft Bing or Yahoo on its home page? Let’s make no bones about it: Neither Optus, nor parent Singapore Telecommunications, is a large enough company to even start have that conversation with the world’s most powerful search company.

The fact that O’Sullivan would raise such an idea in public reveals that he simply does not understand the fundamental nature of the internet right now. There is no need to regulate companies like Google the same way the Government does Telstra — because the cost of internet publishing is almost zero; there is no barrier to entry for competitors.

Not only that, but internet users do not want the Government imposing an obnoxious level of regulation across their pristine natural net landscape. Look what happened with Labor’s internet filter … or the ongoing net neutrality debate. “Hands off our Apache servers!!”, they would scream.

Other aspects of O’Sullivan’s speech, and his answers to questions afterwards, were also concerning.

If you examine Optus’ recent financial results compared with those of its competitors, it is clear that the company is facing a devastating war of attrition on two fronts. iiNet has recently claimed the number two position in Australia’s ADSL broadband market in as clear and public terms as possible, launching a nationwide advertising blitz aimed at positioning itself as Telstra’s chief rival in fixed-line telecommunications.

This is no idle claim. With the scalps of Westnet, Netspace, AAPT and dozens of other smaller companies under its belt, iiNet now has more ADSL customers than Optus — and its revenues are expanding rapidly as a result — up 45 percent for the six months to the end of 2010, compared with the same period in 2009. That’s a jump of $107 million in one year, in case you were wondering.

Optus, in the same period went backwards slightly — with consumer and SME fixed revenues declining two percent year on year. To put matters into perspective, even number one telco Telstra grew in that period — adding 1.2 percent in revenues.

It’s a similar situation on when it comes to mobile.

It’s clear from Telstra’s recent financial results session that the quality of the company’s Next G mobile network is vaulting it ahead of its competitors — along with some judicious price cuts and a sledload of marketing money poured into the market in late 2010. Australia’s biggest telco added just 39,000 post-paid customers in the three months to the end of June last year. But the next quarter — as its efforts took effect — it added some 116,000, and then a further 181,000 in the Christmas period. The company’s mobile serices revenue jumped $210 million.

In comparison, Optus’ net additions to its mobile network stayed flat over the period. Optus has been regularly adding about an average of 150,000 new post-paid mobile customers like clockwork every quarter for several years now. But its rate of change is not accelerating … it’s declining. The telco actually lost 16,000 pre-paid customers, net, over the past half. Mobile service revenue still grew — at 7 percent — but it was along extremely predictable lines.

What I am really saying here, is that Optus’ mobile growth has been reliable … but that is that in a single half of marketing push, Telstra started adding the same numbers of customers to its network as the SingTel subsidiary — that is literally how fast the company’s Next G-fuelled turnaround has been. Telstra has changed gears under David Thodey — and last year caught up to Optus in a heartbeat.

VHA, of course, had a mediocre second half of 2010. But it doesn’t appear from the data available that Optus soaked up many of the customers jumping off the sinking Vodafone ship. Instead, those customers appear to have embarked on a long-term voyage and are now sipping Moet & Chandon from David Thodey’s diamond-encrusted champagne glasses.

The response from O’Sullivan to these problems — when I and other journalists pinioned the executive about them at the speech and afterwards — was, in my opinion, to hide his increasingly greying head in the sand.

Throughout his speech, O’Sullivan remained fixed on Telstra’s dominance of the fixed-line broadband market, and the need to change the regulatory environment in Australia to promote competition in that arena. When I asked him about iiNet’s challenge, the Optus chief merely pointed out that Optus was still technically the number two in the fixed-line market courtesy of its HFC cable network. Well, that doesn’t mean much when Optus won’t even answer questions about whether, like Telstra, it is in talks with NBN Co to shut its HFC network down.

I don’t recall the executive addressing Telstra’s mobile dominance — except to point out that Optus, too, was moving towards the Long-Term Evolution standard which Telstra will implement this year, and O’Sullivan has previously highlighted Telstra’s mobile marketing blitz.

And yet there is no need for Optus to attack Telstra in the fixed-line market right now. After all, all of O’Sullivan’s Christmases have come at once over the past years in that sector … massive government investment, structural separation of Telstra, new regulatory controls and so on — the list of concessions which Optus has won from Labor since it took power in late 2007 is endless.

What more does Optus need to compete? A golden guarantee written in ink and bathed in the waters of Labor’s secret Sussex St shrine to Lenin and the other righteous gods of market intervention, avowing Optus’ permanent position as number two telco?

In short, O’Sullivan’s speech gave the impression that he was stuck in the past. Still campaigning to break up Telstra, railing against “new” players such as Apple, eBay and Google, it appears the Optus chief simply does not realise that iiNet and Telstra are eating Optus’ lunch in the fixed and mobile markets right now … while Optus continues to sit on its hands and whinge about government intervention.

If Optus truly wanted to bring competition to Australia’s telco sector, why didn’t it buy Westnet, Netspace and AAPT’s consumer division, as iiNet did? If Optus truly wants to be Australia’s best mobile telco, why hasn’t it announced a billion dollar re-build of its mobile network — as Telstra did in 2005, and as VHA did just two weeks ago?

The answer is that the telco is currently suffering from a lack of leadership.

After seven years of leading Optus and many more in senior leadership positions at the telco before his ascension, O’Sullivan obviously still relishes his role and has a passion for the telecommunications industry. But he no longer has the energy to stay on the bleeding edge which the sector habitually operates on.

He does not have the will — or perhaps the power — to bring Optus’ chips to the table to place the massive bets which the likes of iiNet chief Michael Malone, Telstra chief David Thodey or even VHA chief Nigel Dews are currently making on the future of their companies. O’Sullivan has a great deal of strategic vision. But Optus is being hamstrung tactically each and every day it is in Australia’s market.

There’s no shame in O’Sullivan handing over some of his current power to the up and coming firebrands within Optus — after all, he’s had a fantastic stint at the top; and in 2009 he acknowledged there were two decent candidates to take his role.

Because if Optus doesn’t get its head in the game soon … it may find its decade-long campaign for change in Australia’s telecommunications sector may eventually result in a little more change than it can handle.

Stay with us next week as we examine internal Optus candidates to succeed O’Sullivan.

Image credit: Delimiter


  1. The current structure of Optus guarantees a deathwish for the company. No vision, dated business plans – its frightening to see Telstra push forward the way it has been in recent years. iiNet have already stomped on Optus for Internet and it’s easy to see that iiNet’s recent jump into IPTV and mobile phones may soon become a threat as well.

    If SingTel lets Optus carry on the way it is, Optus will be lucky to hold on to the market even as a wholesaler.

    • Agreed.

      Personally I think many of their problems can be traced back to SingTel. It’s easy to forget that although Optus rails against former monopolist Telstra, they are owned by a very similar company — and one with close ties to the Singapore Government.

      The presence of SingTel Chua Sock Koong at every Optus financial results briefing is a key indicator of how linked the two companies are. Does Paul O’Sullivan need hand-holding at this stage, after seven years of being CEO? No. But she’s still there.

  2. hmmm…”lemay doth protest too much”…..a disgruntled optus employee maybe? plus the Telstra sycophantism is a little…..blech….i thought i had mistakenly landed at “now we are talking”!

    • heh I am hardly an Optus employee … and I think you will find I have been very critical of Telstra over the years, as well as everyone else when occasion demanded it …

  3. It’s always a concern when competition is espoused on the one hand, yet in the same breath regulation is endorsed. Nothing stops Optus building/delivering their own content, after all it’s a free market and they now have spare cash as they don’t need to foot the bill for rolling out infrastructure, as NBN (taxpayer) is doing this. The real driver behind this speech is that Optus are struggling to compete which you correctly point out is reflected in their financial performance. When this occurs the easy way to address is to regulate, as it creates a closed market which naturally suits the incumbents. So Mr O’Sullivan please don’t expect us (taxpayers) to provide you a NBN and break up of market power which you have begged for years, and then expect creation of a new regulated market that suits you. That flies in the face of competition that you continually tell us Optus champion.

    • True. I think circa 2005, 2006, there truly was a need to address regulatory inequalities in the market. But even at that point, iiNet as acquiring other companies — and TPG wasn’t far behind.

      My question is, if the regulatory constraints in the market were so great, why has iiNet grown so fast in fixed-line broadband — much faster than Optus?

  4. Dave, Dave, Dave, cannot you comprehend that you exhibit the exact same head in sand attitude that afflicts Optus. Renai demonstrates a refreshing and useful comprehension of the problem for Optus as it factually exists and all you can do is try, by devious insult, to have others believe that Optus has no problems, and as has been promulgated in the past, with some success, all fault lies with others.

    • Sydney, I agree that Optus seem to have dropped the ball big time (and note with interest a new ad campaign on TV where iinet are now #2 in DSL broadband)…

      But you, being a Telstra stakeholder/shareholder. Active Telstra supporter (their #2 unofficial spokesman (at all blogs firstly NWAT/TE, ZD, here there and everywhere) only behind VasMas. One who has been personally interviewed online by Telstra’s PR team – on more than one occasion and you having referred to Telstra as ‘Saint Telstra and said God Bless Telstra’, whilst referring to Optus as leeches and racially criticising their Singaporean ownership, is hardly in any position to accuse any one of having their head in the sand…!

  5. Your analysis is remarkably correct.
    Optus is not an ISP. Optus is a telco.
    Now, you’re going to say that they sell internet services, but that’s like a greengrocer selling lollies.
    The key difference between an ISP and a telco is in the mind. It is how they view their customers, how they respond to changes and how they implement technology.
    Seeing it from the inside, it’s astonishing. Simple things to implement are constantly road blocked.
    As an example, they still use paper based fax machines for everything despite having outlook plugins and expensive fax machines that can forward as a PDF.
    This is a minor issue in the scheme of things, but it leads to ridiculous situations where a technology company loses faxes almost on a daily basis. They archive them in the old 1950’s method of cardboard boxes.
    This is something you could observe as a fly on the wall any day of the week.
    Add to that their insistence of outsourcing all of their systems that keep the business running, and signing contracts that leave them with a $50,000 bill for updating a phone number on their web page.
    Their new “heart lung transplant” system had a difficult birth fraught with instability, poor design and still has not genuinely replaced more than one or two legacy systems. There are dozens. Some are old unix terminals, some are citrix, some are web based but will only run in IE6. It’s a real hodgepodge. Your average rep has between 10 and 20 unique logins.
    In many ways, the NBN is the biggest opportunity Optus has ever seen. It means that they can, (if they can find someone with a little vision to manage it) consolidate a whole bunch of systems into fewer. They might even get a business-wide billing and provisioning system. Something that would be light years ahead of where they are today.
    If they manage to consolidate and simplify, they might have a chance of holding their market rather than relying on embittered ex-Telstra customers streaming in.
    The other area they must improve in is a cohesive company-wide strategy for obtaining and retaining customers. I’ve seen them lose 100k/m customers purely because they had no one available to support them. The area that used to had simply been told they weren’t doing that any more. Talk to a rep in the area that used to do it and the attitude is “it’s not my job”. To be fair, there is a lot of pressure on getting average handling time down. Like somehow doing a job in half the time means you’re better value to the company. Sure, it works on paper. Until you realise that everyone is doing half assed jobs and the customer is calling in 4 times.
    What else? Oh, they have about a hundred or so phone numbers for different areas. Sure, they have a lot of products, but many of them require the equivalent of a secret handshake just to be pointed in the right direction for someone who can support you. Their internal directory is a joke, and the customers never know if they’re calling the right number.
    You add all of their internal failings, their penny wise pound foolish attitude, their inability to direct customers effectively, their general lack of leadership off the stage, and then compound it by the issues of dealing with Telstra for fixed products and you end up with most of the staff having completely apathetic attitudes. Add in the constant quiet offshoring of jobs, and most of them can see the writing on the wall.
    They’ve all tried to get something fixed. They’ve all failed because of some internal road block, and they know in a couple of years it will all be run from some third world country, so hardly any of them genuinely care any more.

    Even when it comes to the NBN, Optus is continuing to disappoint. Despite praising it openly, there does not appear to be any public movement towards actually working with the NBN. I suspect they’re going to do what they did with ADSL, 3G and most other things. They’ll enter the market late and play catch up with mass marketing campaigns.

    You’d think someone there would have the balls to speak up and make some plans – right?
    Well, that’s not a career advancing move in Optus. It’s better to play the game, bite your tongue and fiddle the numbers to make yourself look good. Dodging the stats is systematic in there. Everyone from the desk staff to centre managers and more.

    I’m sure I’ll appear disgruntled to some, but it’s just a frank observation of some of the problems POS faces. The company manages to paint itself into a corner in so many ways it’s genuinely difficult to see many ways out.
    Ironically POS’ suggestion for the NBN to outsource its management might actually work for Optus. It couldn’t do any harm that’s for sure.

    • Much of this mirrors what I have been hearing from inside the company as well — although I hadn’t heard the fax machine story ;)

      The lack of participation in the early stage NBN process is a biggie. Optus lobbied for this, pushed hard for it for years, but when the NBN actually arrives, it won’t even conduct a trial, when ISPs as small as Exetel are? It’s a bad joke. The company needs to demonstrate a commitment to customers. That’s what is lacking at the moment.

    • What’s the point of optus, really?

      They’re not competition for Telstra, they behave just has badly as them. They have never presented themselves as a credible alternative, as if just not being Telstra is good enough.

      Their branding and marketing is awful to say the least, they have failed to lead the market in any – any – technological development over the past 10 years, and they aren’t especially cheaper or better in any perceivable fashion over either Telstra or any of the smaller telcos on the scene.

      I’ve never been a customer, not even wholesale, and I dont see any reason to start.

      • I agree with this — they are just not a credible alternative to Telstra at the moment in the consumer or SME space. In big business (say, cloud computing, or massive corporate networks), they are, but increasingly they are being left out of the purchasing decision in fixed and mobile networking in consumer/SME.

  6. Renai how eloquently and sensibly (and without insult) you reveal your thoughtful discription of me. Now if you can only transfer your civilised attitude to RS we could all be pleasant to each other.

      • Yes mine is a direct approach, Renai! There is no point beating around the bush, when it comes to some, imo…!

        Sadly however, I must refute your, at your top reply to me Renai.

        Having corresponded with Mr. Lawrence many times, he to this day, will not admit any bias what-so-ever towards Telstra and claims that each of his comments, balanced views from a concerned Aussie only…! Conveniently hiding his very close associations and stake in Telstra, at all times.

        Enter RS (who first naively entered the fray at NWAT only to be set upon by 4 greedy TLS shareholders, which brings us to now) to bring clarity to these people’s (now only 2 of the 4 left, LOL) comments.

        In fact when I normally disclose Mr. Lawrence’s close associations to (and obvious biases towards) Telstra, I am greeted with a copy/paste Mr. Lawrence uses about once a day, that being, to blindly accuse anyone who says one bad word about Telstra, of being a disparaging opponent out to demonise the Aussie icon Telstra (no that’s not Telstra biased Syd) for their own financial agenda.

        Coming from one who (as outlined) has more associations with Telstra, than you even have with Delimiter Renai, LOL, is rank hypocrisy, imo…!

        Mr. Lawrence, my aim here is to be as pleasant to those I correspond with, as they (and either their facts or FUD) deserve. Speaking of pleasantness and hypocrisy, go back and read your reply to Dave. You will see (or typically not see) it is rather unpleasant. Making you again, most hypocritical in your one-sided views, of me!

        So Mr. Lawrence, if my above description of you is incorrect, please refute. However, you and I both know everything I said is 100% correct, so please tread wearily…!

        In fact before you do so, I’ll even add 2 more “unbiased [sic]” analogies you have said Mr Lawrence (since you have prolonged this issue)…

        1. You compared Telstra to the ANZACS, in their greedy fight against regulations and disgraceful smear campaign against Graeme Samuel.

        2. You compared you/Vasmas to “Jesus”, in relation to persecution, when a group of posters refuted your Telstra tripe…

        You did, didn’t you…? Unbelievable…! And still you claim no bias…?

        While you are at it too, again I ask (as you love to bag Optus, as you did here) – please give me your take on this issue which you have dodged and weaved from, here…


        I look forward to either another waffling reply or further silence 9as I have encountered at the above URL)…from you Mr. Lawrence.

  7. Coudn’t agree more with Anonymous. Optus as a company has been lacking vision for many years. Can trace back to the Singtel takeover. They took too long to come to market with ADSL. They’ve sold out their subscription TV business. Their HFC network is treated as a hindrance rather than a valuable piece of infrastructure that could be value-added. Internally, there is is far far too much emphasis on out-sourcing rather than valuing and developing internal staff and their ideas – and there are many innovative ideas but it all becomes too hard. Corporate Speak of “Best Practice” means doing the same as everyone else even if realistically it isn’t the best way forward. Also a way of squashing internal innovation. Outsource good, insource bad. Their wireless broadband network was lacking capacity – no wonder the dongles were cheap. Many, like I, have since gone to Telstra. Their present-day talk of regulation under the guise of de-regulating in their favour is past its use-by date. They don’t have Trujillo to kick against any more. With the NBN the environment is now different. With a 100Mbs network their are many applications out there that haven’t even been thought of yet. Optus leased network network business is under threat here. I remember the Optus of old “Yes – Optus”. Now it is “No – Optus”. Their value-add was their local support. Now it is all being outsourced. Misleading advertising – ‘unlimited’ anyone? – and expensive ISP plans compared to iiNet / TPG etc. So why Optus and not Telstra? No value-add reason any more. Optus has now become an incumbent and is up for challenge.

    • I agree with much of this — especially the way the HFC network is treated as an afterthought. I tried to get HFC connected when I set up the Delimiter office and was told that Optus didn’t sell it to small businesses. “Well, I thought, time to go with iiNet again.”

      I’d be interested to hear what they are outsourcing — quite a few people have mentioned this over the past couple of days. Can you shed more light on that?

      • They outsource IT support and development. It’s either bought in via expensive (very) consultancy (anyone remember Anderson Consulting) or development outsourced to Singapore, Malaysia. Where did the new provisioning system come from? Local IT is a a team of flunkeys (no reflection on their skills) attempting to manage and interface with all these obstacles to efficient business process. I wonder they actually have any competent IT people still working there. Call centres more and more outsourced. Internal accounting functions. Why don’t they outsource the whole company and be done with it. Once you’ve got wires in the ground, or EM waves in the air, you can sell and manage it from anywhere. When I set up my own company I expected to have to deal with accountancy issues, tax issues, IT issues, customer support issues., etc. These are integral to how I manage and run the business not something I can fob off to someone else and let go off. I really don’t understand so-called modern corporate practice. Even customers become a nuisance. If only they’d just hand over their money and not ask for anything in return. Watching Optus is like watching a shipwreck in slow motion. Now Telstra have decided to become more competitive, this can only speed up.

        • Interesting. I think you can outsource things to a certain degree — and certainly Telstra does exactly the same thing. In large organisations such as Optus and Telstra, once you start to get some scale, the internal IT, accounting and HR departments tend to grow and grow with incredible bureaucracy — often the right thing to do is to outsource them to bring them back to a normal level of efficiency.

          However, I think large companies should change outsourcers fairly regularly to ensure that efficiency remains — otherwise the outsourcer itself tends to become overweight. It’s a delicate balance.

          Having said all that … there are some things which companies should never outsource — those things which are core to them. For Optus, that would include customer service, provisioning, billing, network operations and so on.

          • The thing about IT, it is actually a creative pursuit – not just turning the wheels. In order to be creative in an effective manner you have to know the territory. Internal people know the territory. Outsourced people don’t and have less motivation. If you change outsourcers on a regular basis both these problems are compounded. Captial is wasted. Briefings and updates take over from productive work. Costings become inflated. And short-term solutions abound. IT does not have to become inflated. I have managed IT teams which are motivated and have clear goals and a vision. Can do more with less people when these are there. IT becomes inflated when people lose sight of the function they are really serving and start building empires and a sense of self-importance. Doesn’t have to be this way. I have always found internal accounting departments staffed by people wanting to do the best they can. Same principles of motivation and vision apply. Why outsource good people? If everything is outsourced to lower-cost labour countries, who’s going to have the money to buy your products, taking this concept to its logical conclusion. I’d say we have moved tofar towards the profit-shareholder excuse and need to bring some balance back to the serving the community. Big corporates are only philanthropic for marketing reasons. The first thing to go at Optus during the GFC was their sponsorship programs.

            As regards overseas call-centres this is pure exploitation of both the lowly paid overseas operatives and local customers. Both are ill-served. Cultural and economic differentiators both conscious and unconscious enter such transactions. Not good business.

          • True. It’s the same with everything — a small, in-house, dedicated and skilled team focused on resolving one situation or embarking on one project always performs better than a much larger, generalised team which supposedly has a greater pool of knowledge from working across multiple businesses and so on. Personally I am almost always in favour of keeping people in-house and focusing on developing quality people. I can’t say I have seen many examples where outsourcing has resulted in a fantastic outcome for projects or ongoing maintenance etc. There are some examples where the relationship has worked well — but I can’t think of any where it has flourished and hit a high note.

          • In a sense IT is now the business – sales, provisioning, billing, support, network management. The metal is activated by software. Take away the software. No business. What used to be hardware is now software. e.g. smartphones. Hence, when corporates say “IT is not our core function”, they have missed something. IT is the activation mechanism and the lifeblood of their operations. Software fails and networks go down.

          • You would think they would have learned their lesson after spending a billion dollars on their billing system Arbor, which to be frank, looks like it was developed in VB6.
            But no.
            They just don’t understand that they are an IT/networking company now.
            That is the difference between an ISP and a Telco.
            It’s all in them realising what they are actually doing.

    • Renai,

      I doubt Optus will compete with any effectiveness until it hits their bottom line.
      Singtel is only a small part of their problem. The entire culture is toxic to innovation.
      They discourage ideas. They discourage change. Everything is cast in stone.
      Their silos as they are known, are so separate that it’s not about the left and right hand. If it was, that would be relatively simple to solve. No, Optus is one of those deep sea squids. There are tenticles out there that most of the other tenticles don’t even know exist, let alone what they are doing.

      If anyone in that place was serious about change, they’d stop sending management out every 6 months to ask the staff what’s broken, get hundreds of points, and then watch them high-tail it out of there.
      It’s happened a few times while I was there. They talk the talk, but I’ve never seen one of them walk the walk.

      Their new provisioning system is, well… awful. It has the usability of a foot operated scalpel. Sure, some people can master drawing with their feet, but it’s a rare gift. You probably wouldn’t want a heart surgeon operating with his feet though. Nor would you want a system that manages to display too much redundant information, requires a mental GPS to figure out which screen you need, inserts time consuming obstacles into any changes, and manages to make most of the unique screens look so similar you have to have 6 months experience before you’re even competent enough to recognise one from the other.

      It doesn’t stop there either. There literally is no strategy for bringing the company together.
      Having worked at another smaller ISP beforehand in a similar role, I can say with authority that Optus staff are so slowed down by the systems, red tape, and lack of integration that they get through literally half the number of calls a day.

      They’d better get their act together because staff are expensive and margins are falling. Outsourcing inefficient business models works only so well. Customers complain about offshoring. It’s not because they’re not Australian, it’s because communicating with them is tiresome. Even staff sometimes give up trying to transfer offshore because they speak English, but they don’t comprehend half of the nuance that goes with it.

      Even when told specifically what they have to do by a rep, they still manage to somehow completely misunderstand and repeat back something entirely different. Extremely frustrating for the customers.
      This is not a blanket statement. There are many excellent offshore reps. But who can remember the one guy who knew exactly what you meant, and got it done in 30 seconds vs the one you spent 40 minutes tearing your hair out?

      In the future, it’s easy to see companies with efficient processes and integrated systems with native English speaking staff kicking Optus to the curb. iiNet are on their way. They grew organically without billions of dollars of start up capital, and they’re rivalling Optus already. A level playing field will be most interesting to see. The nimble players will run rings around the large bureaucratic deep sea squid.

      POS if you’re reading this, you really need to try and figure out how to consolidate and simplify all of the hundreds of legacy products that no one even understands. Start with OB, then SMB, then consumer.
      Try and bring them all onto one platform and watch the AHT’s drop dramatically.

      • I agree with a lot of this — outsourcing call centres to India may save money, but it frustrates users. Look at what iiNet have done — they have built a strong internal call centre functionality, and now they can get away with charging high prices because they have a reputation for great customer service.

        If I could say what it appears to me that the problem is at Optus, I would say it’s a classic disjunct between the top level of management and the people that actually do the work. O’Sullivan, it seems to me, has little idea of the reality of the customer experience with Optus right now — while Thodey is literally down there in the trenches with the customers every day, fighting to bring them the experience they want. He personally answers emails, cuts through siloed problems … it’s what he has to do, to turn Telstra’s abysmal customer service reputation around.

        Optus, in comparison, is coasting.

        • I agree Renai…

          The most hypocritical part in all of this…imo?

          These money addicted individuals, say it’s quite ok to outsource (and sack Aussies), all in the name of “further profit$” and excuse this, because “we are part of the global economy”!

          However, as soon as Mr & Mrs Average say, ok, as you have told us we are part of a global economy, we will in future purchase a lot of our goods, online/globally too (not to make ourselves more obscenely rich/richer, as they do, but just to save a few dollars)… Then… these same greed infested individuals/corporations, cry poor and mount a media campaign to try to stop us from doing so…


  8. To be honest, I was surprised when I started reading this article, because the introduction seemed to paint POS so positively. As a company, Optus have been playing catch-up for almost a decade. An example would be their refusal to enter the ADSL market for many years after their competition – the theory being that they could swoop in and claim a huge chunk of customers when ADSL was already well established in Australia. However, this meant that Optus had no experience with the product when they tried to sell it. Compound that with the introduction of ADSL2+, and insiders advised me that the average wait time to speak to frontline support staff stayed at around an hour, and that this went on for over a year.
    At one stage I was offered free ADSL2+ by Optus through some connections, however being aware of how broken their system was, I wouldn’t even accept their product for free.
    The culture within Optus seems dreadful and the big decisions quixotic. I have no respect for POS and no faith in his leadership abilities. There has been nothing in the last decade or so that seems to have been particularly well done, and now POS has let iinet take huge chunks or the market out from under their noses.
    As I said, I was surprised that the introduction of this article was so flattering towards POS, because frankly I can see no reason to flatter him over anything. If I was a shareholder I would have called for his head a long, long time ago.

    • hey Paul,

      my experience with O’Sullivan personally has been that he usually does know what he is on about — and you have to give the company some credit for its regulatory campaign over the past decade, it, among with other things, was what resulted in the unprecedented government telco investment and industry restructuring that is the NBN.

      However, I agree with you about all of your other arguments — Optus did get into the ADSL2+ market too late, just like they’re getting into the early stage NBN market too late. By the time everyone else is providing mainstream NBN services on the mainland, Optus will still be getting to grips with the technology.

      It has never seemed to me that Optus really even understood the potential of ADSL — it was iiNet, Internode and so on that were continually building out infrastructure and pushing out speed upgrades to this over the past decade, mainly.

      Optus needs a youth injection right now — it needs to realise that it is simply not included in many of the customer purchasing decisions made by young people in 2011.

  9. On one piont, you critise him for naiviety but then say “pristine natural net landscape.” What rubbish is that. The net is already regulated, has rules and regulations, and op models will evolve. Not only that, what is pristine and natural about corporate interest of Google etc?

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