Former Telstra CEO Switkowski to Run Australia’s Fiber Network

Telstra Corp. (TLS)’s former Chief Executive Officer Ziggy Switkowski will act as executive chairman of NBN Co., the Australian government-owned company building a national fiber broadband network in the country.

Switkowski, the chairman of Suncorp Group Ltd. (SUN) and Chancellor of the RMIT University, will start in the role immediately, Communications Minister Malcolm Turnbull said at a press conference today. Former NBN Co. Chief Executive Mike Quigley announced his retirement in July.

Turnbull, who took over as minister after Australia’s former Labor government lost the Sept. 7 election, has criticized NBN Co. for missed targets and cost overruns. On Sept. 24, Turnbull said the company’s target for the number of buildings with fiber broadband connections by the end of June 2014 had been revised down by almost half from the company’s projections four months earlier.

“Labor’s made shocking mistakes, there’s billions of dollars that Labor has wasted that we will never be able to recover,” he said. “We are determined to see a national broadband network completed cheaper and sooner for consumers.”

Kerry Schott and Alison Lansley, two members of the former seven-person board, will remain as part of a three-person board. Other members had already tendered their resignations to allow the government to change NBN Co.’s strategy, Turnbull said Sept. 24. Siobhan McKenna stepped down from the role of chairman after assuming the job March 15.

The previous government’s plan would have run fiber direct to almost every home and workplace in the country and had a cost of A$44 billion ($41 billion) in its most recent corporate plan.

Copper Network

Turnbull and Prime Minister Tony Abbott have promised to instead connect all households to high-speed Internet by 2016 for A$30 billion, saving money by running the fiber only as far as junction boxes as much as a kilometer from homes and covering the remaining distance using existing copper wires.

Switkowski, who led Telstra between 1999 and 2005, when it was still majority-owned by Australia’s government, is “one of the most experienced telecom executives in Australia,” Turnbull said.

Switkowski will become a non-executive chairman once a new chief executive is appointed, Turnbull said. The choice of chief executive will be made by the board and the government together and will be completed “as soon as possible,” he said.

At NBN Co., Switkowski will be responsible for leading a switchover which will disburse about A$11 billion in payments to his former employer as Telstra moves from being Australia’s biggest seller of wholesale phone services to its biggest consumer.

He’s also a former chief executive of Optus Communications Pty., the country’s second-ranked phone company that’s now owned by Singapore Telecommunications Ltd.

Strategic Review

Turnbull also said an internal strategic review of NBN Co. to work out how to deliver the network quicker and more cheaply would start today. Construction work on the network will continue while a planned 60-day review of the project is carried out, and companies building the infrastructure will continue work “well into 2014,” Turnbull said Sept. 24.

The revised target for rollout, which will give less than 1 million homes and businesses access to the network in June 2014, compares to a 2.7 million forecast in NBN Co.’s 2011 corporate plan. The original plan called for 12 million fiber connections by the project’s completion in 2021.

About 33,600 homes and businesses were using the fiber network at the end of June, with 207,500 premises connected to the cables, compared to a target of more than 2 million connections in NBN Co.’s earlier 2011 corporate plan.

The network now being proposed would give households download speeds of 25 megabits per second by 2016, according to the government. A 512-megabyte movie would take around four minutes to download at 20 megabits per second and two minutes at 50 megabits per second, according to Thinkbroadband.com.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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