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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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How To Earn Microsoft Reward Points While Playing Your Xbox Series X|S

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If you have an Xbox Series X or S, that means you already have a Microsoft account, and, presumably, you’ve linked the account to your console. If you haven’t, you’ll need to sign into the Microsoft account you want to use for earning rewards, so that when you play games and make purchases, the points go toward that particular email address. You can check out the points you’ve already earned, as well as various ways to earn more points, by heading over to the Microsoft Rewards user portal on the Bing website. You can also use the Microsoft Rewards app on Xbox.

If you want to grow your points by playing Xbox games, you’ll need to sign up for the Xbox Game Pass subscription, which provides customers with a large library of games they can play, as well as some other perks. Points are earned by completing quests in games that are available in the Game Pass library. Microsoft says you can view these quests in the Rewards app under the Xbox Games Pass section. If you haven’t yet downloaded the app, you can get a snapshot look at how the rewards process works on the Xbox Games Pass Quests web page.

According to Microsoft, it adds new quests to this section of the Rewards app on a daily basis. Keep in mind that you’ll need to manually head over to that part of the app when you finish a quest in order to redeem the points. Once those points have been applied to your account, however, you’ll be able to redeem them for rewards within the same app.

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The 1993 Aston Martin Concept Car Perfect For Any James Bond Villain

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Cream leather, chrome, white dials, and a thin-rimmed steering wheel tell the story of an Art Deco cabin modernized for the mid-1990s. The dashboard, pedals, and wheel featured extensive nickel plating, says David Dowsey, while the dashboard was made from a single piece of laminated beech wood.

According to a Discovery documentary about Lagonda — and in what must have felt thoroughly futuristic at the time — the concept featured an integrated satellite navigation system and built-in laptop computers for rear passengers (or Bond villains) to work on. A final flourish saw the car’s steering wheel move out of the way when the driver’s door was opened.

Although it would surely have been toned down for a production version, the concept’s retro interior details are reminiscent of the Jaguar S-Type that arrived in 1999. At the time, both Jaguar and Aston Martin (as well as Land Rover, Lincoln, and Volvo) were part of the Ford-owned Premier Automotive Group.

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Netflix And GM Have Teamed-Up For A New Super Bowl 2023 Ad Featuring Will Ferrell

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According to a press release from General Motors, the auto giant teamed up with Netflix during past championship games to show off its then-brand-new Ultium EV platform. This year, the ads feature former “Saturday Night Live” and “Talladega Nights: The Ballad of Ricky Bobby” star Will Ferrell driving around a new GMC Sierra EV in the Netflix original “Army of the Dead.” An ad also features Will Ferrell in the back of a Chevy Blazer EV in the “Squid Game” universe.

Netflix says that it’s already committed to putting as many EVs in its original programming as it can. As such, a Chevy Bolt will be present in an upcoming season of “Love is Blind,” a Bolt EUV will appear in “The Brothers Sun,” a GMC Hummer will star in “Queer Eye,” and Rob Lowe will drive around a Cadillac Lyriq in “Unstable.” 

Blatant product placement can be hit or miss, especially when it comes to a huge financial decision like a car. However, stuffing shows full of EVs with the help of GM is certainly one way to get people talking about electric cars.

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