Optus is a major telecommunications company with more than 10 million customers. Photo / Getty Images
Here we go again. Another catastrophic Optus failure.
It’s been a nightmare week for Australia’s embattled telecommunications giant.
On September 18, a scheduled firewall upgrade in South Australia triggered a communications outage now linked to the deaths of three Australians.
Normal calls were largely unaffected, but the outage blocked about 600 111 calls from connecting to emergency services.
The breakdown hit South Australia, Western Australia, the Northern Territory and NSW.
In the fallout, Prime Minister Anthony Albanese has suggested Optus chief executive Stephen Rue should consider resigning, Communications Minister Anika Wells has flagged “significant” new penalties and the Greens are pushing for “direct regulation” of the telecommunications sector.
Here’s how it all unfolded.
Optus launched a firewall upgrade in South Australia early in the morning on Thursday, September 18.
It sparks an outage that will last for 13 hours, with state and federal authorities left in the dark about the event until later in the afternoon. It also appears the company itself was not aware of the magnitude of the breakdown until about 1.30pm when a customer contacted Optus directly.
South Australian Premier Peter Malinauskas said his Government had alerted Optus to an outage in the afternoon.
“On Thursday lunchtime or thereabouts, the South Australian ambulance service noticed a drop off in the number of call coming through from triple-0,” he said on the following Monday.
“They then contacted South Australian Police and police reported a similar observation, and then Optus was contacted by us.”
At least five Australians dialled into Optus’ offshore call centres on Thursday morning to warn the company of the outage, but workers at the centre failed to escalate the warnings.
Three deaths are linked to the event: a 49-year-old Perth man, a 74-year-old Perth man and a 68-year-old Adelaide woman.
The outage was initially thought to be linked to the death of an 8-week-old baby in SA, but South Australian Police have since stated the outage was “unlikely” to have contributed to the baby’s death.
The story breaks out into public view on Friday afternoon.
Rue fronts the cameras at 5.45pm and apologises, acknowledging the widespread failure and promising a full investigation.
The company and state and federal governments scramble to understand what has happened.
Optus immediately begins taking fire from an outraged public and furious government leaders over the breakdown itself but also how the company responded and notified key stakeholders.
Malinauskas, speaking at 7pm, said he learned about the 000-linked deaths from the Optus press conference.
“I have not witnessed such incompetence from an Australian corporation in respect to communications,” he said that Friday night.
“Worse than this, it is somewhat extraordinary to me and senior members of the South Australian government that Optus have seen it fit to make this announcement during the course of a press conference, and then only after the commencement of that press conference, to advise senior members of the South Australian government of this occurrence.”
The Australian Communications and Media Authority (ACMA), which regulates the telecommunications sector, was notified of the problem only after it had been resolved.
ACMA boss Nerida O’Loughlin launches an investigation into the event.
Communications Minister Anika Wells says Optus will be “held accountable for the failure.
Rue said a preliminary internal investigation indicated that human error had caused the meltdown.
“On the first night of the upgrade, the steps taken on past successful upgrades of a similar nature were not followed,” he said.
“This issue occurred because there was a deviation from established processes.”
He said the first step, diverting calls away from the core part of the network, was not completed, confirming “it was a result of human error” rather than a technical failure.
Optus promises an independent investigation, headed by former NBN director Kerry Schott.
The review will examine the causes of the outage, the management of triple-0 calls across the Optus network, adherence to operational policies and legislative requirements, and the company’s response to the incident.
Rue batted away suggestions that the outage was linked to cost-cutting or overseas operations.
“Regardless of where a process is conducted, the issue was that a process was not followed. And to be very clear, the accountability for that rests with Optus,” he said.
Optus has about 3600 overseas call centre workers across India and the Philippines and about 250 centre operators within Australia.
Yuen Kuan Moon, the chief executive of Singaporean telecommunications conglomerate SingTel, is expected to fly into the country on Monday.
SingTel owns Optus and investment decisions into the Optus network flow from SingTel’s leadership.
Wells said she had sought a meeting with SingTel to discuss the outage and she expected to meet with the company next week.
“While we have to let the investigation play out and we have to be considered in a government response to the results of those investigations, meeting with SingTel, I think, is an important step for us and also for us to give Australian taxpayers confidence in our triple-0 system, particularly before the summer disaster season,” she said.
SingTel is listed on the Singapore Stock Exchange and boasts a market capitalisation of about AU$82 billion ($93b).
Wells warns that Optus could “expect more” penalties from the failure.
“I don’t think Optus would be surprised to hear me say to you this morning that I think they can – subject to the facts – expect more significant fines,” she said.
“But that is for ACMA to determine. They’re in charge of penalties in respect to telecommunications failures.”
The triple-0 breakdown is just the latest in a string of high-profile scandals for the troubled company.
In 2023, it suffered a triple-0 outage that affected 2145 people.
It received a $12m penalty for that event and implemented 18 Government recommendations to prevent any future outages.
And this week, Optus copped a $100m fine from the Federal Court for “appalling and predatory” sales tactics targeting vulnerable Australians from 2019 to 2023.
Optus will likely suffer an “erosion of brand value”, according to UQ Business School associate professor of marketing Ravi Pappu, but it can still recover.
“Brands pursue several strategies. First, brands apologise. For example, when Toyota identified a fault in their braking system in the 2010s, their CEO apologised.
“Brands improve marketing efforts. Toyota recalled millions of faulty vehicles, fixed them at no cost to the customers, improved their quality systems, started a 24/7 helpline, increased warranties and put in a host of other measures all of which saw Toyota regain lost ground.
“That is, Toyota worked hard toward earning favourable brand associations, for example, reliable, high quality, safety.
“Brands take corrective actions. Optus may install a new back-up system that ensures there are no failures in the future and inform customers about how the actions taken are likely to ensure the incidents are unlikely to occur in future.”
In crisis scenarios, Pappu also said brands tended to employ “reduction of offensiveness strategies”.
“That is, the brand informs consumers that the consequences of the incident are not that bad,” he said.
“This is unlikely to be useful or effective in the present case since there was loss of life.”
Marketing guru Dr Anna Hartman from the ANU Research School of Management said Mr Rue’s position was “precarious”.
“While the average consumer might not know his name, those consumers affected and others who follow the company will have high expectations for his leadership,” she told NewsWire.
“I can already see how some of his communication practices were judged negatively, and therefore have dented his own credibility and that of his comms team.”
She said the event was a “major blow” to Optus’ “already damaged reputation”.
“The fact that it stems from a human error with such tragic human consequences, rather than a cyber-attack, does ring differently and explains the high emotion in public opinion,” she said.
“This is a crisis that strikes at the core of the brand’s credibility as a reliable service provider.”
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