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Telcos flailing against tide to turn into dumb pipes

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(Image: Chris Duckett/ZDNet)

It’s a funny quirk of 21st century economics that public companies can be profitable, but just not profitable enough, and few sectors feel the need to reinvent themselves into super-profit machines more than telecommunications carriers.

In the modern day, it is an exceptional listed company that is happy to function as a data-passing business with a small percentage of profit on top without any of the bells and whistles that promise to be either the next big thing or the savior of the industry.

Thanks to being in Sydney, my primary examples will be Australian-based, but it is symptomatic of trends happening around the world.

A couple of years ago, faced with the prospect of much of its wholesale business disappearing thanks to the National Broadband Network (NBN), Telstra decided it would be moving beyond being a telecommunications company, and would now be a technology firm.

“This sentiment is behind the evolution of Telstra’s brand. Telstra is evolving from a telco to a techco — to be a world-class technology company empowering people to connect,” then-Telstra CMO Joe Pollard said in 2016.

“Our brand needs to reflect this, and demonstrate there are better ways for everyone to thrive in this connected world.”

Telstra was fresh off landing former Nokia CEO Stephen Elop, who was tasked with handling the strategy shift.

Fast forward two years, Elop is no longer at the company and Telstra’s technology plays have been hit and miss.

In the U.S., Verizon aimed to be a media player via the acquisitions of AOL and Yahoo. Those purchases combined to create Oath, but haven’t diversified Verizon’s revenue stream. Verizon will live and die with its wireless business. AT&T acquired Time Warner to break into media, but the wireless business carries the day. Resisting being a dumb pipe company gets expensive.

The most spectacular miss could end up being the AU$220 million contract signed in 2016 to construct and run the Australian National Cancer Screening Register for five years, which an audit committee called out for serious underperformance by Telstra Health and said the government should consider killing the contract or imposing penalties on Telstra.

Also see: What is 5G? Everything you need to know about the new wireless revolution | 5G technology: A business leader’s guide (Tech Pro Research) | All 5G stories | CNET: 5G is almost a reality. Here’s what it’ll really feel like

Being able to build and run IT infrastructure for a government that has a track record of handling IT badly should have been a slam dunk, but it was not to be.

At the same time, Australian telcos have been seeking to boost their offerings by including free data from music and video streaming services, and making moves into sporting rights, but Optus found out what can happen when you undershoot the demand for World Cup games.

To understand why telcos are trying anything that could make money, Telstra detailed the extent to which the NBN is carving out its revenue, at the same time as the previous rivers of gold from SMS and other fees begin to dry up and half a billion dollars annually with them.

“The NBN will have reduced Telstra’s net profit after tax by close to a half when fully rolled out. Not a few percent, half,” chair John Mullen said last week.

“To give some scale to that impact, what we are losing through this policy of half our business is approximately equivalent to a company the size of Qantas.”

Pivoting a company the size of a national telco might sound good on paper, but as reality shows, it is quite the challenge.

It is worth noting that even as these searches for revenue replacement have continued, Australian telcos remain quite good at this bit-passing business.

Also: Ericsson: 5G a ‘commercial reality’ as networks sales rise | Edge Computing: The 2 things tech leaders should know | Verizon launches first commercial 5G network, paving way for smart city growth (TechRepublic) | Trump’s FCC bets big on 5G: Here’s how it will change the US economy forever (TechRepublic) | FCC approves faster and cheaper 5G small cell deployments

The next big thing that telcos are banking on is the coming rollout of 5G, but with the Internet of Things (IoT) touted to be one of the major use cases, the future from a telco perspective looks a lot like the past — shunting bits. The tiny low-powered sensors themselves are not going to need much value-add from a telco on an individual level, just a good signal and some software networking higher up the stack.

Despite the need to create the next telco entertainment corp or telco everything-as-a-service arm, the telcos that will survive the shift and intense competition we are seeing will be the ones that are best at providing good networks at reasonable prices.

Dumb pipes might not be sexy as the Silicon Valley darlings, but they will be fundamental in a connected future.

ZDNet’s Monday Morning Opener

The Monday Morning Opener is our opening salvo for the week in tech. Since we run a global site, this editorial publishes on Monday at 8:00am AEST in Sydney, Australia, which is 6:00pm Eastern Time on Sunday in the US. It is written by a member of ZDNet’s global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and North America.

Previously on Monday Morning Opener:

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This Brand Makes The Worst Android Phones, According To 27% Of People We Polled

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Most respondents who participated in our poll seem to earnestly believe that Xiaomi makes the worst Android phones out there. More than 27% of the polled users think Xiaomi deserves this particular crown. On the face of it, the poll results seem grossly unfair towards Xiaomi, given that the company doesn’t even sell its phones to U.S. consumers. There is no denying, however, that Xiaomi needs to do a lot to change its brand perception in the U.S. if they ever plan on releasing smartphones in North America (again, that is).

With more than 21% of the votes, a virtually unknown smartphone brand for U.S. consumers comes in second place. The brand in question here is Realme — a sub-brand owned by OPPO. Realme is a very popular smartphone brand in Asia and is known mainly for its value-for-money devices that usually compete against similarly priced alternatives from Xiaomi.

Another smartphone brand that is in desperate need of a brand overhaul is Google. More than 18% of polled people thought Google makes the worst Android phones. That’s a lot of brickbats for a company behind the software that powers Android phones. The less favorable opinion seems to stem from a long list of issues that troubled the Google Pixel lineup.

Samsung and OnePlus find themselves in the last two places on this list with 17.23% and 15.54% of the votes, respectively. It could be that the other brands are simply less popular in the minds of U.S. citizens, or it could be that Samsung and OnePlus really and truly make the best Android phones — what do you think?

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Lincoln Model L100 Concept Is Hyper-Luxury Electrification With Wild Doors And A Disco Floor

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Certainly, the exterior of the Model L100 Concept is memorable. Lincoln describes it as “the tension between exuberant elegance and subtle restraint,” and it’s clear that aerodynamics have played a big role in deciding the overall silhouette. We’ve seen how that chase for slipperiness through the air can lead to electric cars looking like relatively amorphous blobs, though that’s something Lincoln manages to avoid.

Instead, it plays with light, glass, and scale. The Model L100 Concept hunkers low to the ground, with a glass panoramic roof and reverse-hinged doors to add drama as well as make entering and exiting more straightforward. Sensors track the owner’s approach, meanwhile, with the promise of a curated light show both outside and inside. Then, the doors — which extend all the way back to the rear bumper — gape outward, while the entire glass roof section lifts up.

The concept is finished with a satin digital ceramic tricot metallic paint, shifting between cool blue and soft white. Instead of the traditional chrome, frosted acrylic has been used as a more sustainable alternative. The whole floor of the cabin, meanwhile, is one big digital panel capable of showing shifting graphics, colors, and patterns. 

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Here’s How Drones Could Change The Medical Industry

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UKRI’s program also has major implications for the medical industry in particular, both in terms of its future sustainability as well as efficiency. University Hospitals of Morecambe Bay NHS Foundation Trust (UHMBT) Director Phil Woodford told BBC the Future Flight Challenge could help reduce traffic, pollution, and transport sensitive medical supplies, all at the same time. The project’s first phase will start with drones traveling between the Royal Lancaster Infirmary, Wesmorland, and Furness General Hospitals in Cumbria, using a dedicated 250ft airspace. Based on routes in Google Maps, the average driving distance of such trips more or less range from 20 to 40 miles.

The thing is, current means of delivering medical samples in Lancashire involves traveling to different hospitals several times a day using vans, taxis and motorcycles. Compared to such rudimentary means of travel, which Woodford said takes an hour or more depending on traffic, using medical drones are said to shorten the overall trip to just 15 minutes. Woodford argued that medical drone deliveries can make the process faster, safer, and doesn’t put unnecessary load on drivers and the environment. While drones have proven to be quite handy in space, properly integrating them on Earth’s busier air space is another story. Fortunately, the project is building a roadmap to tackle just that.

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