SGX-listed Singapore Telecommunications, or Singtel (SG:Z74), today announced the resignation of the CEO, Kelly Bayer Rosmarin, of its Australian subsidiary, Optus. The news came just days after a widespread network outage in Australia that left millions of customers without phone or internet services for 12 hours. This is considered to be one of the largest data breaches in the country’s history. Singtel stated that Michael Venter, the CFO, will assume the role of interim CEO while the company initiates a worldwide search for a new leader.
Rosmarin took the decision after a parliamentary hearing on Friday, during which Optus acknowledged the absence of a contingency plan for an outage of such magnitude. She stated, “I have come to the decision that my resignation is in the best interest of Optus moving forward.”
The Singtel share price has been trading down by 0.43% at the time of writing today. Year-to-date, the stock has been trading down by over 9%.
Singtel is a leading telecommunications service provider in Singapore that offers a diverse range of services to its customers, including fixed-line, mobile, internet, data, TV, and more. Singtel Optus Pty Limited operates a fully-owned subsidiary of Singtel and is the second-largest telecom company in Australia.
Poor Crisis Management
Rosmarin, who took over the role in April 2020, led Optus through two national scandals that significantly impacted the company’s reputation. The most recent outage faced earlier this month sparked anger and frustration among customers, raising broader concerns about the telecommunications infrastructure.
The resignation of the CEO in the aftermath of a national crisis only appears to be a temporary fix. The challenges faced by Optus are closely tied to its operational model and the lack of a conventional board of directors based in Australia to provide oversight for its management. Despite Optus asserting the existence of such systems, the recent outage highlights a substantial lapse in disaster planning, signaling a significant failure in risk management.
The company is urgently in need of well-structured governance that holds clear accountability for its local operations, particularly concerning risk management.
What is Singtel’s Share Price Target?
According to TipRanks, Z74 stock has been rated as Strong Buy backed by unanimous Buy recommendations from nine analysts. The Singtel share price target is S$3.02, which is almost 30% higher than the current price level.
