Optus’ Singaporean parent company cut its investment in the Optus mobile networks by $237 million last year.
Hence the triple O crisis that killed Australians.
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast site, my own website, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at www.businessacumen.biz.
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 33 in our series for 2025 and today’s date is Friday September 26
First, I’ll be talking to I’ll be talking to Michael Horin, a principal at Clarity Aged Care Advisors about the seismic shift taking place in the Australian aged-care industry – more Australians, especially those with means, will pay more for their aged care. We are an ageing society. We and our families will all have to answer serious questions about issues that will affect all of us
And I’ll be talking to Rabobank economist Teeuwe Mevissen about how the Chinese economy is dealing with Trump’s tariffs, and whether Trump will end up meeting with X Jinping to come to some agreement on trade and tariffs,.
But first let’s talk to Michael Horin.
So what’s happening in the news?
President Donald Trump on Sunday said tech and media giants Larry Ellison, Michael Dell, and Lachlan and Rupert Murdoch will be a part of the group to take over TikTok’s algorithm in the acquisition of the social media platform’s US operations. TikTok’s owner ByteDance will own less than 20%. “You know, they’re very well-known people. And Larry Ellison is one of them. He’s involved. He’s a great guy. Michael Dell is involved. I hate to tell you this, but a man named Lachlan is involved,” Trump said on Fox News’ “Sunday Briefing,” referring to Lachlan Murdoch — the CEO of Fox Corp., which is the parent company of Fox News — and the son of Fox Corp. founder Rupert Murdoch. Trump added that Rupert Murdoch “is probably going to be in the group.” Participating in the TikTok consortium could provide a boost for Fox Corp, which has been making many digital media investments to offset declining areas of business like broadcast television. Dell is the CEO of computer maker Dell Technologies. Trump’s comments are a change from the consortium of investors previously named in the TikTok deal. The Trump administration had said that the group of investors would include Ellison’s company, Oracle, along with Silver Lake and Andreessen Horowitz. White House press secretary Karoline Leavitt told Fox News on Saturday that TikTok will have seven board members, six of whom will be American. The makeup of American investors is required by the bill passed by Congress in April 2024, which required a nationwide ban of TikTok operations in the United States unless the social media app sold about 80% of its assets to American investors.
Inflation rose to its highest rate in a year in August as state government electricity rebates expired, but the increase is unlikely to stop the Reserve Bank of Australia from cutting interest rates again this year. Headline inflation increased to 3% in August from 2.8% in July, the Australian Bureau of Statistics said on Wednesday, on the back of a 24.6% annual lift in household electricity bills. The RBA has been expecting headline inflation to temporarily rise as state and federal government electricity rebates expire and more households start to pay the full price of their energy bills rather than the lower subsidised price. RBA governor Michele Bullock this week said she was focused on underlying measures of inflation rather than those subjected to temporary distortions caused by government bill relief. Trimmed mean inflation, the RBA’s preferred measure of underlying inflation, fell to 2.6% in August from 2.7% in July, the ABS said. The RBA is increasingly comfortable with the outlook for inflation, which now sits within its 2 to 3% target band after several years of rapid price rises. Financial markets expect the RBA to cut the cash rate another two times by mid-2026, with the next move lower fully priced in by the board’s December 8-9 meeting. The RBA views the monthly CPI figures as an unreliable gauge of inflation pressures compared to the quarterly data.
Australian Prime Minister Anthony Albanese has failed to secure a meeting with US president Donald Trump in New York with the White House has all but confirming there will be no one-on-one between Trump and Albanese in New York during the United Nations General Assembly this week. In announcing Mr Trump’s itinerary for his roughly 24 hours in New York, White House Press Secretary Karoline Leavitt has listed his meetings, with no mention of Anthony Albanese. Mr Trump will instead have bilateral meetings with the UN secretary-general and the leaders of Ukraine, Argentina and the European Union. He will also attend a multilateral meeting with Qatar, Saudi Arabia, Indonesia, Türkiye, Pakistan, Egypt, the United Arab Emirates and Jordan. The Australian prime minister will at least have a chance for a handshake and interaction at a “welcome reception” being hosted by Trump for more than 100 world leaders on Tuesday night, New York time. Trump’s campaign rally style speech to the General Assembly ran for over 57 minutes where he said European leaders are destroying their countries and unique ways of life by allowing rampant migration and switching to costly renewable energy to combat climate change, which he calls a scam and “the greatest con job” in the world. Later in the week, the US president will host Turkish President Recep Tayyip Erdoğan at the White House. The outline means Australia’s hopes for a one-on-one meeting this time appear to have been dashed again. The White House has confirmed that Albanese will meet Trump face to face on October 20 at the White House.
The federal government will review whether Optus and its Singaporean parent company, Singtel, have underinvested in their networks, as Prime Minister Anthony Albanese questioned whether Optus chief executive Stephen Rue should keep his job. Three people died after being unable to call the emergency phone number due to a failure in Optus’ networks last Thursday. Communications Minister Anika Wells and Australian Communications Media Authority chair Nerida O’Loughlin added more detail to the government’s plans to hold Optus to account at a press conference in Brisbane on Monday morning. The government said new legislation may be necessary to prevent similar emergency call failures in the future. O’Loughlin said on Monday that her investigation into Optus would consider whether its owner, Singtel, had underinvested in the Australian telco network. “We are looking through the investigation [to determine] whether there’s been … enough investment in the network to make sure it’s reliable and accessible for emergency call services,” said O’Loughlin. “But also whether there are systems and processes in place to alert Optus to when things are going wrong because we’re seeing this big gap between when the outage actually occurred and when people were notified.” Wells referred to ongoing reform measures that were suggested – but not yet implemented – after Optus’ last major network outage in 2023, including the start of temporary disaster roaming tests later this year. This would make rival network providers share their infrastructure during disasters. “We are now considering what needs to be done holistically or as part of legislative relief for Australian people, given their confidence has no doubt been shaken by what has happened here,” Wells said. “[Optus has] serious questions to answer now about their own processes, why they weren’t followed, and what went wrong, and the reasons for this will be part of the investigation.” Speaking to ABC News Breakfast from the UN General Assembly in New York, Albanese said he would be “surprised” if Rue was not considering his position after the Triple Zero failure last week. The prime minister pledged a “thorough investigation” of the outage. “Optus’ behaviour is completely unacceptable – we have made that very clear. There’ll be a proper investigation by the authorities, and the government has action at its disposal, but the immediate concern will be that investigation,” he said. Albanese said the government would “await the proper facts” before taking the necessary action. Asked directly if he thought the company’s chief executive should consider his position, he responded, “I’d be surprised if that wasn’t occurring.” “We want to see the investigation take place. What we want is to ensure that something like this shouldn’t happen.” Rue has been running Optus since November 2024, following the resignation of Kelly Bayer Rosmarin in the aftermath of a previous national network outage in 2023. He has held daily press conferences since the Triple Zero outage, in which he has apologised for the network failure and the deaths. He has also expressed determination to stay in his job and implement the findings of an independent review into the incident. Optus network outages last week stopped calls getting through to emergency services in South Australia, Western Australia and the Northern Territory. Optus executives were initially unaware of the failure for hours, despite customers complaining to its call centres. On Sunday, Rue acknowledged that “established processes were not followed” in the firewall upgrade that crippled the Triple Zero network, but said a more detailed explanation would have to wait for the review. Optus said it was introducing a new “compulsory escalation process” for future customer reports of Triple Zero failures.
Optus’ Singaporean parent company cut its investment in the Australian telco’s mobile networks by $237 million last year despite concerns about reliability, putting more pressure on the Singtel chief executive ahead of a visit to Australia next Monday. Analysis of Singtel’s financial reports show it cut the money it spent on Optus’ mobile networks from $850 million in 2024 to $613 million in the 12 months, despite the company being under pressure to improve its reliability after a crippling nationwide outage in 2023. Optus chief Yuen Kuan Moon will arrive in Australia over a week after Optus failed to spot a failure of Triple Zero emergency calls on its networks for 13 hours, during which time three people died after failing to get through. Optus’ Australian board has been meeting every day since it was first informed of the outage, which prevented more than 630 mobile phone calls getting through to emergency services. Optus has blamed the outage on an unspecified problem with a firewall upgrade, but has failed to answer more detailed questions about its procedures and investment. But analysts said the details of its funding cuts are an example of Singtel’s push to cut costs to boost its returns. “Telcos have lost valuable revenues to the digital giants and they are financially struggling to keep up and modernise their networks,” independent telecoms consultant Paul Budde said. He added Singtel has consistently underinvested in Optus. “With financial pressure only increasing going forwards we need to investigate if there is enough investment going into what is a national interest issue. This goes well beyond the commercial interests of the telcos,” Budde said.
And a legal crisis facing Optus is set to deepen in the wake of its fatal triple-0 breakdown, with the telco facing a looming super trial stemming from a disastrous cyber attack along with the possibility of fresh litigation sparked by a botched network upgrade last week. Slater and Gordon class actions practice group leader Ben Hardwick said the law firm is “taking inquiries regarding potential legal action against Optus in relation to the triple-0 incident last week”, although this is not likely to result in a class action unless the number of people bringing claims exceeds seven. Shine Lawyers chief legal officer Lisa Flynn said “there may be the possibility of bringing individual claims against Optus if someone has suffered injury, loss and or damage as a result of the outage”. Slater and Gordon are also representing about 160,000 Optus customers whose Medicare details, passport numbers and even police identification information was leaked — some on the dark web — in a massive cyber attack in 2022. That hack affected about 10 million customers, sparking the Slater and Gordon class action and two regulatory lawsuits. The Australian Communications and Media Authority and Australian Information Commissioner are suing Optus over the cyber attack too. All three cases are now set to come to a head in early 2027, after the Federal Court ordered the three cases be joined in a super trial. A Deloitte report Optus has fought for years to keep secret, despite promising it would be published in the immediate wake of the crisis, will be made public for the first time during the trial.
Sky-high levels of energy required to power AI technologies and data centres will put pressure on the renewables rollout, according to the Climate Change Authority, which warns the rapidly growing industry will limit Australia’s emissions reduction ambitions. The warning is part of the CCA’s recommendation that Australia adopt a 62 to 70% reduction in carbon emissions by 2035, which was accepted by the government last week but is lower than the 65 to 75% draft range used by the CCA in its consultation with industry in 2024. According to the CCA, the achievement of Australia’s new 62 to 70% target will rely heavily on the rapid rollout of renewable energy sources such as wind and solar, and the increased electrification of other sectors, including transport and heavy industry. But in its advice to the government published on Thursday, the authority singled out the growth of artificial intelligence and data centres as a key “delivery risk”, informing the lower end of the target range. “The rapid growth of artificial intelligence and data centres is driving significant increases in electricity demand, which in turn is contributing to higher emissions than anticipated, making a more ambitious target harder to meet,” the CCA said. “We have recommended a lower bound that makes allowance for the intrinsic uncertainty of our analysis and transition risks (e.g. strong data centre growth).” In its advice to the government, the CCA said AI could deliver energy and cost efficiencies from automating and optimising operations in sectors such as transport, manufacturing, the built environment and renewable energy integration. However, data centres also use immense amounts of energy to power and cool the massive computer servers required to run artificial intelligence systems like ChatGPT and Gemini. According to forecasts published by the energy market operator in August, Australian data centre power consumption could increase by an average 25% annually in coming decades, and reach up to 12% of the entire grid’s energy demands by 2050. Local data centre operators including NextDC, Airtrunk and CDC have experienced rapid growth in recent years. In June, the International Energy Agency said investment in data centres had increased by 67% in the past two years, which was driving a surge in new fossil fuel investment as operators scrambled to find new electricity sources to meet their huge electricity requirements. While data centre operators had a clear preference for renewables and nuclear power, regulatory and cost uncertainties had led many to turn to “conventional” sources of power such as gas, the IEA said.
Australia’s economy is in a good place, its top central banker said on Monday, while slowing inflation and a resilient labour market mean policymakers have room to ease policy further if needed to deal with shifting risks. Appearing before lawmakers, Reserve Bank of Australia Governor Michele Bullock said the recent rate cuts were expected to support spending by households and businesses, but the global environment was uncertain and unpredictable. “Since the August meeting, domestic data have been broadly in line with our expectations or if anything slightly stronger – the Board will discuss this and other developments at our meeting next week,” Bullock said. “But the economic outlook continues to be clouded by uncertainty…So we need to be alert to the risk that circumstances may change and be prepared to respond if necessary.” When asked about the biggest risks to economic outlook, Bullock highlighted the global environment and the possibility that the recovery in consumption may not pick up as expected. “That might not be good for the labour market, and we will find ourselves in a position where we are perhaps lower on inflation and worse on employment than we would like to be,” she said. The RBA has so far adopted a gradual and cautious approach to policy easing, having cut rates in February, May and August to reach the current 3.6% after assessing inflation data for each quarter. It has said the pace of further policy easing depends on the flow of data. Its forecasts were conditioned on some further modest easing of monetary policy. Investors are wagering the RBA will skip a move in interest rates at its September 29-30 meeting, although a move in November is still about 75% priced in. The central bank indicated this month that it was close to achieving both of its mandates, inflation and employment. Inflation was on track to return to the midpoint of the 2-3% target band, while the labour market was operating close to full employment. The economy also grew at its fastest annual pace in almost two years in the June quarter as consumer spending finally picked up, while monthly inflation unexpectedly spiked higher in July. Bullock said the recovery in household consumption is forecast to sustain as real incomes grow and the economy picks up over the next year. The slowdown in job creation is in line with forecasts, but policymakers do not see a sharp deterioration with the unemployment rate still at a historically low 4.2%. If changes in global trade end up badly affecting China, Australia’s biggest trade partner, Bullock said the central bank has room to ease policy further, adding that the recent Chinese data has not been encouraging. “We are sort of in a good position. We have got pretty strong labour markets still and inflation is back in the band,” she said. “The interest rates are still at 3.6% and therefore we have got room to move if we need to.”
And that’s it for this week.
And next week, I’ll be talking to Dr Tim Currie, the CEO of NOVA, which provides onshore and nearshore IT services, on why Gen Z are turning away from remote work.
And I’ll be talking to RMIT economist Sinclair Davidson on why universities don’t and shouldn’t work as businesses.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
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Looking forward to the next episode of Talking Business next week.
