The Australian: Quigley must go because NBN is failing

IF NBN Co were a private company, chief executive Mike Quigley would be gone by now.

Last Thursday afternoon, NBN Co put out an announcement confirming what everybody already knew -- it will hopelessly miss its June 30 target for the number of premises to be passed by the fibre network.

In the business world, chief executives who repeatedly miss their targets -- or otherwise fail to deliver results -- do not last very long.

Look at James Warburton, who joined Ten Network as chief executive in January last year; he was gone by early this year after Ten failed to improve in the ratings. Tom Albanese, Rio Tinto's former chief executive, left the company "by mutual consent" in January after major writedowns in the company's aluminium businesses.

The chief executive of listed mining contractor Macmahon Holdings left the company in September last year after an earnings downgrade.

They are not pleasant or easy decisions for boards to take. But chief executives are paid -- very well -- to deliver outcomes for stakeholders: investors, customers, employees and others.

A chief executive is accountable for setting and meeting the company's goals. Investors and other stakeholders rightly judge chief executives on whether the company meets its targets. Skilled chief executives set targets which are demanding, but achievable.

If you commit to a target only to miss it that raises suspicions you may not understand your business as well as you should.

The stated goal of NBN, set up by the Rudd-Gillard Labor government in 2009, is to build and operate the national broadband network.

The Coalition believes that key aspects of the current plan are gravely flawed. For example, the use of fibre to the premises throughout the fixed network.

But the current board and chief executive of NBN have signed up to deliver the current plan.

Mr Quigley has set a number of targets to be met along the way to deliver the plan and consistently failed to deliver on those targets.

According to NBN Co's first corporate plan, released in December 2010, the fibre network was going to pass 317,000 homes by June 30 last year. It achieved less than 40,000.

That same plan set a target of 1.269 million homes by June 30 this year. To avoid missing that target too, NBN Co issued a new plan in August last year, sharply reducing its target for June 30 this year to 341,000 premises.

When NBN Co disclosed early this year that its fibre network passed 72,400 premises as at December 31 last year, it was clear that even the new, reduced, June 30, 2013, target was well out of reach. In the last few days figures posted by Victorian retail service provider DeVoteD, sourced from NBN Co, suggested big problems.

These figures showed that as at March 12 there were 47,511 "brownfields" premises passed by fibre. (The fibre rollout is split into existing homes, called "brownfields", and new developments, called "greenfields".)

NBN Co had earlier reported that as at December 31, last year its network passed 46,100 "brownfields" premises.

This meant that in 10 weeks NBN Co had managed to add only just over 1400 premises -- so the rollout was going much more slowly than it needed to meet the targets.

On Thursday, NBN Co formally admitted what everybody suspected -- saying it now expected to fall well short of the 341,000 target.

NBN Co is receiving very large amounts of taxpayers' money; $2.8 billion by June 30 last year, with another $20bn to be put in over the current four-year period.

Mr Quigley is paid $2 million a year to deliver results.

It is time for the board -- under newly appointed chairwoman Siobhan McKenna -- to face up to the obvious. Just as the Network Ten board, on which she also serves, took a tough decision to replace that company's chief executive, NBN Co needs to take a similarly tough decision.

If this government and this board genuinely think it can deliver on the plan, it needs to change the chief executive of NBN Co and find someone with stronger capabilities in managing network rollouts.

Paul Fletcher is a Liberal MP and former telecommunications executive.