Singtel has again denied that its Australian operation Optus is up for sale, after a report claimed that stake sale talks with Canada's Brookfield have reached a dead end.

Nick Wood

April 3, 2024

3 Min Read

According to sources cited by The Australian, Brookfield was interested in acquiring up to 20% of Optus. However, it was not interested in paying Singtel's asking price, understood to be between A$3 billion and A$3.2 billion ($1.95 billion-$2.09 billion).

Rumours that Singtel was negotiating a deal with Brookfield first emerged in mid-March. While the Singapore-based telco group issued a denial at the time, it said it wasn't going to offload Optus "for the said sum," which suggested that it might do for the right price.

This time round, there is no such ambiguity in Singtel's denial.

"The group has previously said it regularly conducts strategic reviews of our portfolio including Optus to optimise the value of our assets and businesses and will explore all options to maximise shareholder value," it said in a stock exchange filing. "The group would like to reiterate that there is no impending deal to divest Optus which remains a strategic and integral part of the Singtel Group."

Integral it may be, but Optus hasn't exactly been the jewel in Singtel's crown lately, thanks to network outages, a data breach, and a leadership vacuum.

CEO Kelly Bayer Rosmarin resigned last November, carrying the can for a nationwide network outage – one that affected access to emergency services for millions of customers – that happened on her watch. Her departure was followed last month by that of Optus' managing director of networks, Lambo Kanagaratnam.

Peter Malinauskas, leader of South Australia's government – which is a customer of Optus – was particularly scathing in his assessment of the operator. He told local news outlets "they [Optus] have let their customers down throughout the state, including the government," adding that he was considering switching providers.

"If Optus want to seek government as a customer, they need to be a reliable service in this modern age," he said.

Almost exactly 12 months before the outage, Optus was hit with a similarly gargantuan crisis that inflicted no small degree of reputational damage, including to its now-former CEO.

In October 2022, Optus revealed it suffered a data breach that exposed the personal information of 9.8 million current and former customers. Of that total, 2.1 million had at least one part of an identity document accessed.

Fortunately for Optus, the hacker responsible seemingly grew a conscience, and chose not to sell the ill-gotten data.

That didn't stop Bayer Rosmarin being hauled over the coals by the federal government. The incident also cost Optus an estimated A$140 million, and it lost around 10,000 customers as marketing efforts were postponed while it dealt with the fallout.

Following Bayer Rosmarin's departure last November, CFO Michael Venter was appointed her successor on an interim basis, and Singtel launched a search for a permanent replacement.

More than four months on, and with seemingly no one in the frame, some people are getting twitchy.

According to a report by The Australian last month, James Perkins, national assistant secretary of the Communication Workers Union (CWU), said "the lack of stability in the company is clearly impacting its ability to deliver."

His comments were made after Optus suffered another outage, albeit a minor one limited to phone numbers hosted on an exchange in Victoria. Normally that wouldn't attract much attention, but such is the degree of scrutiny surrounding Optus, every minor mistake serves up fresh fodder for critics.

Whoever steps into the CEO role on a permanent basis will have their work cut out trying to repair Optus' reputation.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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