NBN Co needs a boardroom blitz

If Malcolm Turnbull anoints former Telstra and Optus chief executive Ziggy Switkowski as chairman of NBN Co as expected, he will have addressed only one of the challenges confronting the national broadband rollout.

While there is already some push-back on the notion of Switkowski as NBN Co chairman from with the telco sector, he does tick some of the boxes.

He had almost a decade of senior telco executive experience including the CEO roles at the two major telcos, but has been away from the sector long enough (since 2005) not to have any meaningful conflicts. He has also had significant non-executive experience, including his current chairmanship of Suncorp and directorships of Tabcorp and Oil Search.

He understands the sector, has experience of managing a boardroom and would bring to the role the calm and disciplined intelligence, for which he is noted.

There are those critical of his time at Telstra, which coincided with the dot-com boom and bust and the ongoing privatisation of Telstra. Apart from the extenuating circumstances, if Turnbull defines the role properly, that shouldn’t be the major talking point.

The key perceived problem with the governance of NBN Co has been that, while outgoing chief executive Mike Quigley did bring some relevant experience (and considerable energy and passion) to the role, he came from the vendor side of the industry. There was insufficient experience of building a network as big, expensive and complex as the NBN either within the boardroom or within senior management.

He was asked to set up one of the biggest communications infrastructure rollouts in the world from scratch, negotiate an extraordinarily complex set of arrangement with the dominant fixed line carrier and the competition regulator, deal with an exceptionally interventionist and aggressive minister, create a commercial strategy and implement all these things at the same time.

The sensible approach for Turnbull — and Switkowski if he is appointed chairman — would be to stock the boardroom with a range of relevant experience in building and operating complex infrastructure and ideally telecommunications infrastructure, as well as the financial and legal skills needed to respond to the varied challenges NBN Co faces.

Ideally, NBN Co would have a chief executive (there have been suggestions Switkowski could be appointed executive chairman, which is not necessarily a good idea), who has the skills to renegotiate the agreements with Telstra, the government and the Australian Competition and Consumer Commission that the radical changes to the nature of the NBN would dictate.

He or she would also have to have a good knowledge of digital networks and the digital communications environment for which the NBN will be the future platform, a strong commercial and management background, a good relationship (or at least credibility) with politicians in both major parties and be able to bring the same kind of energy and commitment to the rollout that Quigley displayed.

They’ve also got to be able to work with Telstra. One of the failings of the current NBN from the outset was that Stephen Conroy ensured there was an adversarial element to the relationship by threatening Telstra, even though Catherine Livingstone and David Thodey did their best to defuse the tension, and ultimately to out-negotiate Conroy and Quigley.

The only entity in this country with the expertise to roll-out a network like the NBN, let alone the one that leverages off Telstra’s copper network that Turnbull envisages, is Telstra itself. It was largely shut out of the Conroy NBN but needs to be brought into the Turnbull NBN.

Turnbull has pledged that Telstra will be no worse off under his NBN relative to the $11 billion of net present value it was to gain from Conroy’s NBN. Contracting it to be more heavily involved in the rollout would be one way of helping to deliver the value that would make good on Turnbull’s promise to keep Telstra shareholders ‘’whole.’’

One name that comes to mind is Kim Williams who, before his brief and difficult stint as chief executive of News Corp Australia (publisher of Business Spectator) was the long-time chief executive of Foxtel.

Williams knows Telstra because of its 50 per cent stake in the Foxtel business, understands the digital environment, demonstrated he is a skilful negotiator through the Foxtel/Optus content merger and the negotiations with the ACCC over the digitisation of the Foxtel platform and, as he showed in successfully opposing the Labor Government’s proposed media reforms, understands the political process.

If not Williams, there is a need for someone with a similar range of skills and a similar background at the most senior levels of NBN Co.

There also needs to be an injection of hands-on experience of building complex networks and managing contractors, perhaps at a chief operating officer level.

The current NBN rollout has been characterised by an endless series of delays and blunders at the coalface of the roll-out to the point where only a fraction of the fibre network (relative to what was within NBN Co’s original corporate plan) actually connects to premises.

While the Turnbull NBN ought to be a lot easier, faster and cheap to roll out, there still needs to be an addition of very senior technical and operational management experience to NBN Co.

In other words, Turnbull needs to completely restock the NBN Co board and direct them to overhaul senior management and introduce a number of people with more appropriate experiences and skill-sets for a project that involves very significant technical, intellectual, commercial, political and operational challenges.

One appointment — of a new chair — isn’t sufficient.

The chairman — whether Switkowski, the incumbent Siobahn McKenna or someone else — needs to be given riding instructions by Turnbull to ensure that NBN Co has the appropriate team to respond to the diverse and discrete set of challenges that will arise when it shifts to Turnbull’s vision of a fibre-to-the-node core with competing technologies and potentially competing wholesale-only infrastructure.