news As expected, Communications Minister Malcolm Turnbull this afternoon confirmed former Telstra and Optus chief executive Ziggy Switkowski had been appointed as executive chairman of NBN Co, with most of the company’s board departing and NBN Co chief executive Mike Quigley to leave the company.
The announcement was made at a press conference in Canberra this afternoon, where Turnbull described Switkowski as “one of the most experienced telecommunications executives in Australia”, noting that the executive had led both Telstra and Optus as chief executive as well as having a subsequent “distinguished” career as a company director and chairman.
Switkowski, Turnbull noted, had met with retiring NBN Co chief executive Mike Quigley today to conduct a handover process. Effectively, until the new board of NBN Co is fully appointed and appoints a new long-term chief executive replace Quigley, Switkowski will be acting as chief executive of the company.
Turnbull also confirmed that only two directors of NBN Co’s existing board, former Mallesons partner Alison Lansley and investment banker and New South Wales senior public bureaucrat Dr Kerry Schott, would remain on NBN Co’s board as part of the transition process. A new full board will be appointed to NBN Co by the Government shortly, Turnbull said, with Lansley and Schott having “very relevant skills” which would be useful to the board and bring “an element of continuity”.
The Communications Minister said the new Coalition Government was determined to see the NBN completed “sooner, cheaper for the Government and more affordably for consumers”, and that it was “very committed to the NBN”. Turnbull declined to comment on any other potential board appointments to NBN Co, apart from to note that many of the projected candidates outed by the Financial Review newspaper had been inaccurately named.
However, questions remain about the extent to which Switkowski is qualified to lead NBN Co’s predominantly construction-focused operation.
Switkowski only served as Optus chief executive for a year in the late 1990’s, in a period in which Optus had predominantly finished deploying its HFC cable network. The executive served at Telstra for half a decade through to 2004, but Telstra did not engage in significant network construction activities similar to NBN Co’s rollout, during that period.
During Switkowski’s time at Telstra, the only substantial hard fixed-line telecommunications construction efforts the company was involved in included laying international submarine cables, and backhaul fibre rollouts connecting regions, both of which are qualitatively different from the street by street access network construction which makes up the bulk of NBN Co’s work. The company’s main network work, apart from these piece jobs, was actually the ongoing maintenance of its copper network.
Secondly, Switkowski exited both companies under acrimonious circumstances. His departure from Optus came prematurely and in the middle of corporate chaos, and the executive was asked to leave in December 2004 by Telstra’s then-board, led by chair Donald McGauchie. Part of the problem was Switkowski’s bad relationship with McGauchie, who had taken the chair role in April that year. But part of the problem was that Switkowski, with aborted plans to buy newspaper group Fairfax and TV channel Nine in the picture, had not been able to articulate a clear future direction for Telstra.
Since Switkowski’s departure from Telstra in 2004, he is not known to have held a role in the Australian or global telecommunications sector.
Asked about these specific issues today, Turnbull said Switkowski had run “a very large company, Telstra”, which constantly rolled out telecommunications networks, as well as running Optus during its HFC construction period. In addition, Turnbull said Switkowski had not been appointed as “head of construction”, but as head of NBN Co as a whole, which was a very different role.
Turnbull said in general, with respect to the Coalition’s tenure leading the NBN project, the project had “stepped out the world of spin and politics and ideology” and into the world of business and “making rational decisions”.
What a wonderful way to endear an obsolete copper based patchwork plan to internet users. Let’s bring in someone from the good old days to show us just how much more can be squeezed from the copper. Well done Turnbull, you picked the perfect person to run GimpCo and someone who can achieve the results you want in 1184 days.
+1. Beautifully said Hubert :)
Did you say 1184 days Hubert, well I reckon its going to feel like 10,000.
It feels like 1183 days now :-)
Turnbull had “ridiculed the NBN with politics”, well Duke Nukem Switkowski, involved in the much ridiculed Foxtel Optus street cabling race, started Bigpond with their much ridiculed sky high broadband pricing and minescule investment in broadband technology. Switkowski believed the internet was short term fad, the long term future of Telstra was the copper telephonic model.
Doesn’t Malcolm remember the dumbass investments Telstra made in shonkey internet startups, that cost shareholders hundreds of millions causing the collapse of it’s share price, and the hiring of a true telco professional Sol Trujillo to replace the failed Switkowski.
The ultimate compliant fall guy.
With M.T’s mates still on the board and surprise surprise bagging NBNCo management and organisation, never once sheeting the blame due to Telstra’s betrayal and sabotage
p.s, I note M.T ha stated the FTTP rollouts will continue in the interim, is Telstra allowing that to happen yet?. Harrison negotiated that contract without penalty clauses, no wonder he retired
Switkowski was CEO while Telstra was rolling out its HFC network though it’s Foxtel subsidiary. Does that not count?
From my Delimiter 2.0 article on the subject:
“… at neither company did the executive actually conduct a significant network infrastructure rollout, and certainly not of the kind which NBN Co is currently engaged in. Optus’ dramatically cut short its HFC cable rollout in 1997, and Telstra did the same that same year in response, meaning Switkowski only had a very small period overseeing either rollout.”
Doesn’t Turnbull remember the Sausage Software and solution 6 debacles
Oh bother
Why do I get this feeling the NBN is suddenly declared ‘good enough’ in 5 years time and privatised hurriedly/sloppily…
Quigley attacked for no rollout experience ( despite supplying Alcatel technology to roll outs around the world for decades). Board (including former Baulderstone’s CEO and senior Leightons engineer Rick Turchini) sacked for delivering the nation’s largest infrastructure project close to time and on-budget. Now replaced with Ziggy who built absolutely nothing. You are a genius Malcolm! If the mainstream media were balanced they would also reprint Quigley’s farewell note in full.
http://www.businessspectator.com.au/news/2013/10/3/technology/full-text-mike-quigleys-farewell-letter-nbn-co
Interestingly he states
1) 1,900 MDU customers connected at 65 sites LAST Week
2) Greenfields catching up well
Some interesting info in that speech
There was a lot of interesting info in the final NBN Co Business plan as well.
‘The National Broadband Network Company has revised its fibre to the premises rollout forecasts dramatically down for the third time in six months, with the company now projecting that only 729,000 premises will be passed by its fibre by the end of June 2014, a little over half of what it was projecting in August 2012.’
http://delimiter.com.au/2013/09/25/credibility-blown-nbn-co-wildly-revises-targets/
“I had a horrible nightmare. I dreamed that I went… back in time. It was terrible.” – Marty McFly
“The more things change, the more they stay the same.” – Snake Plissken
Not much else to say really…
Turnbulls comment, (Turnbull said in general, with respect to the Coalition’s tenure leading the NBN project, the project had “stepped out the world of spin and politics and ideology” and into the world of business and “making rational decisions”.)
This is a classic case of projection on Turnbulls part.
Has this man got any shame, disgraceful.
Put him in as chairman of the Australasian division of a photographic film company, Kodak, at a crucial period in picking the right path forward for the future and what was in Kodak’s future? Oh, right, bankruptcy.
Put him in as CEO of one company doing an FTTN rollout, Optus, a quarter of it gets sold a month after he leaves, the whole lot gets taken over by SingTel about four years later and the whole network it built gets shut down after only about 17 years after Ziggy leaves due to being overbuilt by Telstra’s and having some massive underinvestment, NBN or no NBN.
Put him in as CEO of one company doing an FTTN rollout, Telstra, and he’s got his guys arguing, as late as 2002, that ISDN speeds are all people need to download stuff from the US while he introduces a 3 GB cap with $189/GB overage fees. The plans were called ‘Freedom’. $189/GB = Freedom in Ziggyworld. Underinvestment in the network leads to a point where they themselves call the network 5 minutes to midnight.
After those cases of business models gone the way of history we had him basically telling us that Fukushima was no biggie, don’t worry about it.
One of these FTTN networks is hugely anti-competitive, the other is obsolete, and the coalition thinks it’s a good idea to build a third and to get him to run it???
“Insanity: doing the same thing over and over again and expecting different results.”
(although we can say that the coalition is sane, but pure evil, if they’re expecting the same results as the supposed success story that Telstra was between 1999 and 2004. If nothing else, we can thank him for being a fairly direct cause for the founding of Whingepool.)
I also love the irony of it.
Malcolm Turnbull was complaining that someone, on the most common kind of connection, downloading on a 1 Gbps connection would hit their ISP with $20,000 in wholesale fees.
Meanwhile he hires someone who, on the most common kind of connection, Bigpond ADSL, charged people at $189/GB a total of $62.1 million for the same amount until quite recently. Except, of course, he limited the speed artificially to 1.5 Mbps so the maximum you could do was $91 thousand.
Apparently in that Lateline interview, I think what he meant when he was saying this:
> Do you know what it would cost to have a guaranteed one gig’ service? At least $20,000 a month. $20,000 a month in combined virtual circuit charges … The reality is this: if you want to have a guaranteed one gig service, your retail service provider will have to buy one gig of CVC for you and that is gonna cost $20,000 a month.
Was that $20k wasn’t enough. It should be much much more, so he hired exactly the person who previously charged Australians 3,000 times more.
Telstra cable launched with a 100 megabyte – yes, megabyte limit. The 189 dollar per gigabyte overage charge wasn’t super unrealistic.
(I got DDOS’ed once for about 5 minutes leading to a 100 megabyte or ~18 dollar charge on my bill.)
This guy was death when he ran Telstra. NO employees I knew at the time had any faith in his abilities and vision (was there one?).
His appointment is like adding sugar to the NBN fuel tank…………………. stuffed!!!
He is a LNP stooge employed by them last time for Telstra and now for NBN to do the LNP bidding
Hi Renai, I’m slightly confused…
“Effectively, until the new board of NBN Co is fully appointed and appoints a new long-term chief executive replace Quigley, Switkowski will be acting as chief executive of the company.”
…has Ziggy been officially announced as this “long-term” chief executive or just as a caretaker chief executive for the time being? Rest of article implies he’s the long-term chief executive but the sentence above confused me… perhaps reword to clarify? (Also seems to be missing a “to” before “replace”)
Hi is the long term Chairman, but acting CEO while they look for a replacement. The CEO runs the day to day activities of the company, but reports to the Board of Directors. The Chairman is the head of the Board, who make strategic decisions that guide the direction of the company, which is what the CEO works towards operationally.
He, not ‘Hi’
Cool, thanks… was a late night, makes sense now.
“executive chairman” and “chief executive” were blurring in my tired brain!
Hi is the long term Chairman, but acting CEO while they look for a replacement. The CEO runs the day to day activities of the company, but reports to the Board of Directors. The Chairman is the head of the Board, who make strategic decisions that guide the direction of the company, which is what the CEO works towards operationally.
In other words, he’s actually pretty redundant considering the Minister will actually be setting the direction for them….
So no change in how it was done under Labor then?
That was the actual point mate, glad your still awake ;o)
Having worked for Telstra during the Ziggy period, I can assure you he destroyed the heart and soul of that company and ran it into the ground. Maintenance came to an abrupt end and customers were basically told where to go if they had an issue. It was all about milking the most amount of money as they could while providing the least amount of service.
The internal employees were restructured many times, people were made redundant, paid out after 10-30 years of service, then employed as contractors generally on two to three times as much as they previously were.
Unfortunately Malcolm will never be held accountable for this decision he’s made, hence these poor decisions will continue to be made.
On a positive note, the media has a lot of material on Ziggy to make life difficult for Malcolm now, I am positive it’s going to end in major embarrassment for him.
The LNP doing the opposite of the rhetoric they spouted in opposition? Well there’s a shock!
All Spin / PR stuff aside
The NBN Co. interim board is now in place.
To quote Renai LeMay
“Once the Government had appointed a new interim board for NBN Co, The company was to deliver a strategic review into its operations within 60 days”
It is now “T – 59 Days and Counting”
We will be watching closely Mr Turnbull. On your commitment to transparency
Will there be another Pozible campaign to fund the FoI for the “strategic review” of the NBN Co?
Depends if they publish the review voluntarily, and if not, whether the FoI will cost several hundred dollars to process or several thousand.
“We will be watching closely Mr Turnbull.”
And you will do what, precisely? He won’t be held personally accountable. He won’t be found financially responsible. He won’t be found criminally negligent. The best you can hope for is that he’s voted out at the next election, but given how safe that seat is for him, I don’t like your chances.
“Destroy the NBN”.
Mission Accomplished.
What amazes me is that Renai is still surprised when Turnbull apparently does exactly what he was told to do. NBNco is going to have very little purpose going forward; I’m waiting for the announcement that cherry-picking legislation is about to be relaxed.
Because we all want round two of the overbuild fiasco, right?
Telstra does. Telstra has a lot of political clout and can provide financial incentives. There are no material penalties for what they’re doing, so it’s irrelevant what will arguably be a better outcome for customers and the country.
There’s no profit in going up against a government funded entity, whilst cherry-picking legislation exists.
Telstra have one goal, capture market and or retain it. If said legislation is relaxed, they do not have to overbuild. Simply build at all; they own and manage the CAN.
Turnbull has two options, continue NBNco funding and resist likely market pressure; or make it a commercial problem. Given the schizophrenic nature of recent decision making, who knows which way he’ll go.
If he caves, he’s labeled as a hero of the liberal free market, if he stands fast, then it’ll further erode his support from an increasingly right wing party.
You are joking, right? There is tremendous profit to be made overbuilding a FTTN network with FTTP in built up affluent areas and business districts. If NBN Co had chosen to deliver FTTP to 70% of Australia instead of 93%, the cost of construction would be a third to half of what it is scheduled to cost. The next three percent (94 – 96%) would have doubled the cost of construction. Consider this – if you could get FTTN at 25mbps on the NBN, or FTTP at 100/40mbps with Telstra for a small premium, which would you choose? If you’re a business with 50 employees that makes extensive use of the Internet, who is looking to leverage cloud services, storage and offsite backup and you can get access to 1000/400mbps on Telstra FTTP or 50mbps FTTN on the NBN, which are you going to be looking at – one that enables you to leverage new technologies and subsequent efficiencies, or the one that prohibits that possibility?
This is a scenario that a number of large players will be looking at closely right now. Everyone knows that Telstra have the deepest pockets and control of the duct network, but if Telstra don’t start deploying FTTP that leaves those areas up for whomever gets there first.
The result will be like the Wild West for a few years, with competing networks clamouring to get their fibre into the ground first and tie up as many premises as possible. Because make no mistake – the networks they install now will keep generating profits for decades, maybe even centuries.
Once there is an existing fibre network in an area, it becomes increasingly risky for other competitors to overbuild from that point, I would agree with you there. If the first network manages to tie up 50% of premises, that leaves you competing for only half the original market, and it may be a half that isn’t going to be interested in FTTP as long as FTTN remains, because that may be perfectly adequate for those people. But as far as profitability is concerned, the top 10% of users consume 85% of your traffic and generate 50% of your revenue. The top 3% consume 70% of traffic and account for 35% of revenue (those are rough figures going from memory – I believe Steve Jenkin has a breakdown on these figures on his blog). That means any infrastructure owner needs to be first to capitalise on early adopters and high performance, high bandwidth consuming customers because that’s where all the profit lies. Everyone else is incremental padding – the bulk of your ROI will be serviced by those first high end users who will as for premium services to get maximum performance.
Unfortunately the level of activity that will be unleashed by this legislative relaxation will be heralded as definitive proof for the commercial success of the initiative. Little attention will be paid for some time as to the tremendous damage it will do to NBN Co and the federal budget, or the problems engendered by such a fragmented landscape of different networks utilising different equipment and technologies to achieve broadly the same aim. Instead of easily managed, easily maintained with ubiquitous stable performance, some networks will be plagued with problems, there will be no central oversight or management, there will be bottlenecks where networks connect… It will be a nightmare Australians will have to put up with for many decades to come.
And let’s not forget the debt they will be lumped with as a result of the failure of NBN Co after infrastructure competition pulls enough market share away to make positive ROI unrealisable.
Ziggy was there when his own people spoke of the state of the copper in the ground as being at “5 minutes to midnight” – I wonder if he remembers that while peddling Turnbull’s copper solution (yes, using that same copper that was on its last legs all those years ago).
Ziggy was part of the team that cut 20,000 jobs from Telstra (all the while ignoring any need to upgrade or maintain that dying copper).
Perfect choice.
(and it was nice to hear SH, on ABC radio this morning, being all moderate in his language while the future, potential non-exec directors are being investigated)
Where is he peddling ‘Turnbull’s copper solution’ ? and what do mean by the ‘copper solution’ anyway, don’t you mean Fibre to the Node used in rollouts all over the world even as we speak to replace the all copper to the exchange link at much lower cost and faster deployment?
Ahhh, so FTTN is all about replacing “the all copper to the exchange link” – I thought it was something else, sorry.
don’t you mean Fibre to the Node used in rollouts all over the world even as we speak to replace the all copper to the exchange link at much lower cost and faster deployment?
Otherwise known as “The half-arsed solution” where they only replace half the copper ;o)
@ Fibroid… are you serious?
Even once could you please look at the entire picture and not fluff-up/down?
“Anyway, don’t you mean Fibre to the Node used in rollouts all over the world even as we speak…”
Ah yes, especially the UK says you… until someone points out that the UK is behind schedule and your answer, err, umm, well that’s because they are rolling out FttP too…
“and what do mean by the ‘copper solution”
I agree, it is not a solution whatsoever, it is a ridiculous, bygone era, stop-gap, bullshit band aid fix… after all as you said in relation to the UK, “they are also rolling out FttP”…
It’s only behind in the rural portion (the government funded bit), the commercially funded metro parts are on target time wise, but the takeup is pretty crap (mostly due to “competition” with Sky. Virgin, et al).
Indeed tinman…
The very portion most similar to, well, our proposed government built FttN project, which the node nerds and parry faithful use as their pin up ;)
“it is not a solution whatsoever, it is a ridiculous, bygone era, stop-gap, bullshit band aid fix”
Nailed it. +1.
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