news Shadow Communications Minister Anthony Albanese has criticised the Government’s appointment of former Telstra and Optus chief executive Ziggy Switkowski to lead NBN Co, pointing out that the executive has not led major network construction work and that his tenure at both telcos was controversial.
As expected, Communications Minister Malcolm Turnbull yesterday 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.
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.
However, in a statement issued late yesterday, Albanese said the governance of the NBN could be “compromised” by Turnbull’s haste in appointing a new NBN board
“Only a day after being sworn in as Minister, Mr Turnbull effectively sacked the entire NBN Co board. Now he has announced a new three person board, led by executive chairman Dr Ziggy Switowski,” said Albanese. “One of the first principles of good governance is that a board should have an appropriate and broad mix of skills and experience. This cannot be achieved with a three person Board, no matter how accomplished Mr Turnbull may think they are.”
“Before the election, Mr Turnbull claimed he would add experience relevant to the NBN rollout, but he has failed to do so. While Dr Swikowski has been CEO of both Telstra and Optus, he was not in charge of any major new network construction activity in either role. His tenure at Optus and Telstra was not without controversy.”
Albanese said Turnbull’s record as a Minister and Opposition Leader showed he had a tendency to be impetuous. “This is not a characteristic suited to making decisions about something as important as the National Broadband Network,” the Labor MP said.
Albanese is not the only high-profile figure to severely criticise Turnbull’s handling of the situation with respect to NBN Co’s board. This morning, the Financial Review carried an opinionated article by former NBN Co director Brad Orgill, who refused to resign his role and was fired by Turnbull this week. Orgill criticised both Labor and the Coalition for their poor handling of the NBN project, saying that he had resolved not to resign his post out of protest, from a sense of “weariness at politics overshadowing fair process”.
Albanese has made a very valid point here. Not to beat my own drum, but I’ve been arguing this about Switkowski for quite a while. As I wrote in my Delimiter 2.0 article about Switkowski in early September:
“… 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.”
“Communications Minister Malcolm Turnbull has spent much of the past year telling anybody who will listen that NBN Co’s board needs more directors with actual telco network construction experience. Yet the candidates he’s appointed or been reported to have approached so far for board positions cannot claim that background, and several have close ties to Turnbull’s own Liberal Party.”
Turnbull had better come up with some board directors in his next tranche of appointments who actually have some experience deploying telecommunications networks. Because so far he has done abysmally at matching his actions to his words when it comes to NBN Co’s board.