The COVID-19 crisis has revealed weak points in telcos that have not been (sufficiently) addressed for many years now.
Today, telco customers expect providers to offer digital service on the same level to which they have become accustomed from other services and platforms in everyday experience. This is another wake-up call to speed up the digital transformation, which is also indispensable for resilience in times of crisis.
For such reorganization to truly succeed, the internal transformation must encompass more than just IT – while also incorporating different business levels. This also means that CIOs’ understanding of their roles must change. And since digitalization is the boss’s problem, the consequence is that CIOs have a new task, namely, to communicate this understanding to the organization and advance the transformation to composable business.
Digitalize once and then profit permanently? Unfortunately, that is not the way things really work.
On the one hand, technical reorganization must go hand-in-hand with continuous adjustment of organizational structures. On the other hand, it must be possible to measure the digital target architecture and business organization and processes by their flexibility.
After all, a communication service provider (CSP) who wants to be digitally successful also must be flexible all the time: implement new things quickly, adjust, maybe even discard and try something completely new.
Rigid IT structures and cumbersome corporate structures stand in the way of this process and make it more difficult to focus on the customers. That is why the prerequisite for the digital transformation is composable business. It requires a triad of composable architecture (i.e., the IT architecture), composable technologies (the technological solutions) and composable thinking (the right mindset).
Companies will have to be composable, modular and configurable – thus making them flexible and fit for the future.
This means that the framework for composable business must be regarded as a task for the whole company, not just for IT. In addition to developing technology platforms, this also includes business behavior, ways of working, work processes and information usage.
Accordingly, CIOs have a new role: As the people responsible for implementing a composable architecture, they also drive the restructuring into a composable business and become central figures for future business successes.
What are the benefits of composable business?
1. Using lessons from the COVID-19 crisis
Like a Litmus test, COVID-19 revealed existing problems in many areas and the need to eliminate them became acute. CSPs now realize where they need to improve with respect to digitalization to react flexibly to new market requirements in the future, keep their customers and continue to grow.
For CIOs, speeding up a digitalized business basis by developing a composable business has become a critical task.
2. Competitive ability in the future
Market research and consulting company Gartner also predicts that composable business will become increasingly relevant. Gartner predicts:
- that, by 2024, companies with a composable approach will be 80 percent faster than the competition when implementing new offerings and
- that 80 percent of the companies will use iterative, experimental methodologies such as design thinking, lean startup, and agility.
3. New success factors for CIOs
How fast will the CSP be able to grow with the market, confront new challenges and use new technologies? How quickly will CIOs detect such developments and trends? How long will it take until IT can satisfy the resulting internal and external requirements?
In the future, CIOs, their IT, and their teams will be measured by this. Companies can better confront these challenges with a composable business framework.
From composable architecture to composable business
“Composable business” means building an organization from largely autonomous, exchangeable building blocks. Such a modular structure enables a company to adapt quickly to changing external influences, such as a shift in customer values or sudden changes to the supply chain or available materials, and to reorient itself quickly.
Step 1: (Re)design of the business model
The transformation to an agile procedure for developing the business model in order to enable a flexible response to changes.
Step 2: Information as the basis for decision-making
Relying on information as the basis for smart decisions, develop new services and products.
Step 3: Adaptive methods
Use iterative and collaborative work methods and design technologies in interdisciplinary teams.
Step 4: Modularization of the platform
Make the technological platform flexible and adaptable – with a modular structure, the transformation enables quick implementation and the linking of existing, new and future solutions.
The implementation: Innovation through design thinking, lean start-up, and agility
“Design thinking” is an interdisciplinary process that reveals solutions for complex and nearly insoluble problems in a technically feasible, commercially sensible, and emotionally comprehensible manner.
At first glance, this approach may scare people off (because of how time-consuming it is!) but it enables quick, low-threshold, iterative implementation. CIOs do not have to create the “final” solution immediately. Instead, the task is to make sure that IT can adapt dynamically and provide greater flexibility in the future.
And this includes making companies aware of the significance of the composable business. The goal is to establish teams that can develop solutions in agile fashion, combine them, build new ones, and make decisions independently – always based on data and with a focus on customer experience.
This also means that CIOs do not absolutely have to decide everything themselves. That is their team’s job. In the interest of agile methods, however, it is important that the CIO is included in regular discussions not just with the team but also with the CEO and corporate management.
CIOs’ role in an organization goes beyond IT management: they are crucial to ensuring the company’s success. With the implementation of composable architecture and composable technologies, they inspire composable thinking – and thus take important steps toward a composable company.
For this approach to function as it should, teams must work in collaborative, cross-functional and, optimally, also business-driven fashion.
For this approach to function as it should, teams must work in collaborative, cross-functional and, optimally, also business-driven fashion.
- The starting point is always the market and its target groups: What are the customers’ problems and needs, and which digital services would be the best response to these?
- The answers are brief, iterative, and agile: A service goes live early on with the most critical functions and can then be tested directly by customers – and based on this, evaluated, and improved.
- Thanks to composable architecture and container infrastructure, expanding the solution is easy: Individual IT services can be enhanced and scaled independently of one another via APIs.
The result: quick time-to-market, high quality and easy expansion of the technological solution.
Composable architecture: Modular, flexible, scalable
Silos and rigid architecture put the brakes on digitalization. However, CSPs have grown monolithically. Data from product catalogs, contract management or payment and credit checks is not linked.
To implement a flexible microservice architecture, it is crucial to break down such silos and integrate legacy systems step-by-step into innovative solutions – normally via APIs and connectors.
The so-called “decoupling” of a customer-oriented front end from the back end layer provides a concrete example of how such an end-to-end digitalization of the process chain can be implemented so that it is TMF-compliant.
- Increasing of essential KPIs: Productivity, efficiency, quality, time-to-market
- Different internal teams ensure greater speed thanks to modular breakdown into individual elements
- Flexible design of customer touchpoints
- Personalized customer experiences
- Freedom to try things out and test them
- More efficient scaling of performance
Conclusion: CIOs must think ahead
A modular, composable structure provides the essential prerequisites for long-term, successful, customer-oriented digital business models for CSPs. If CIOs succeed in transferring this view from the IT environment alone to all processes and to the entire organization, they will give their companies a decisive push toward digitalization – and perhaps also a decisive competitive advantage.
Improving customer retention in telecoms: A digital-first mindset
A survey conducted by Accenture revealed that 77 per cent of telecoms customers are willing to retract their loyalty towards a specific network operator. Lock-in contracts are no longer sufficient to retain a customer base long term. To keep customers satisfied, telecoms companies should do more with what’s already at their fingertips — data.
In the telecoms sector, customer loyalty is by no means assured. Churn rates, the rate at which customers stop doing business with an entity, are a shared concern among MNOs and MVNOs. While difficult to define, annual churn rates for most telcos are thought to be anywhere between ten and 67 percent, making the industry one of the biggest sufferers of customer loss.
For customers, the grass may always seem greener on the other side — especially if it’s being offered for a better price. So how can telcos win more business, and keep it?
Digital-first means customer first
Understanding consumers’ expectations of their service provider plays a crucial role in customer retention, especially in a market with so much choice.
Consumers are becoming more digitalised. As the physical becomes antiquated, customer relationships are being developed through successful in-app or online experiences. Consumers have come to expect always-on and always-accessible services, making it more important than ever that telcos adopt a digital-first approach to meet the changing, digitalised needs of consumers.
Spurred on even more by the pandemic, customers are living and thinking digitally. Areas of their work, recreation and social lives are being increasingly played out in the virtual world — and it’s in this realm where telcos must strike. According to Salesforce, more than 70 percent of customers expect companies to create new ways to access existing products and services, and the most effective way of creating more possibility is to do so online.
Like their customers, telcos must also become digital-first. In fact, digitally mature companies are found to be 23 percent more profitable than less mature peers, and 64 per cent more likely to achieve business goals. A digital-first mindset involves making decisions based on the customer’s wants and needs and measuring newly developed features and touchpoints against these metrics.
Digital-first telcos have an advantage over traditional telcos in understanding the drivers of churn. By adding further dimensions of data, available only via digital channels, and combined with predictive analytics Digital-first telcos can have a far deeper understanding of the drivers of churn and when customers might terminate their contract. These enhanced insights allow telcos to foster better customer relationships, implement effective retention programmes, and upsell tailored products and services before a customer becomes a risk of churning.
Data analytics can show operators customer profiles, device information, network data, customer usage patterns, location data and more. Customised service and product recommendations can be upsold so that customers feel like their needs are being met, offering a more personalised service.
Mobilise’s M-Connect is a fully customizable, modular platform that assists telcos in meeting the demands of their digital-savvy customers. Our user centric design approach helps telcos to provide digital ‘self-care’ experiences that actually meet customer expectations. Coupled with our data analytics tools, the telco can build advanced behavioral insights models to predict what customer intentions will be.
The Data Analytics Dashboard feature of M-Connect provides operators with a user-friendly graphical representation of insights like app analytics, location information, traffic volumes, network usage and device types. Additionally, the CRM tool enables customer service staff to manage all aspects of the customer lifecycle. From initial contact to post sales and financial management, it improves the customer experience by enabling high quality, consistent omni channel customer service.
No matter their size or maturity, retaining customers will always be a challenge for telcos. However, there’s a lot to learn from the changing behaviors of the consumer and MNOs and MVNOs alike must make the digital switch. In an industry that — fundamentally — facilitates connections between people, using digital tools to better connect with customers’ needs to be at the top of any telco’s agenda.
The 19th century called, it wants its phone system back
The future of telephony lies in VoIP
Recent Ofcom data found that if business landline numbers continue to drop at their current rate, they will be all but extinct within just six years. But would this be a bad thing? The landline has enabled connectivity from 1876, so is it time for an upgrade? Here, Douglas Mulvihill, UK marketing manager at business phone system provider Ringover, explains why businesses should move on from the landline.
Landlines have been an office staple for decades, enabling communication, customer service and collaboration. However, as technology has evolved, more efficient tools have been created that help businesses to do everything that the landline offers, but in a more streamlined way.
The decline of the landline
The landline’s lifespan has been cut short by the announcement of the Public Switched Telephone Network (PSTN) switch off. The PSTN has formed a large part of the UK’s telephony infrastructure since its creation, but the rise in popularity of digital solutions has led BT to the decision to permanently switch it off from December 2025.
This means the businesses need to start thinking about what the future of their telephony system is going to look like, and Voice over Internet Protocol (VoIP), is taking centre stage as the landline’s successor. VoIP phone systems have all the features of traditional landlines with the addition of some modern upgrades.
VoIP telephony transmits calls over the Internet, rather than phone lines, for almost instantaneous connectivity. By using the internet, it completely removes the reliance on the soon-to-be obsolete PSTN. But why is VoIP the future of business communications?
Ready for anything
VoIP phone systems don’t require any additional physical components beside the device, meaning the entire system is accessible from a mobile or browser application. No time is wasted on infrastructure installation and businesses can deploy their system rapidly, such as when onboarding new employees.
A survey from the British Chambers of Commerce revealed that 66 percent of UK businesses are looking to retain some element of remote working in the aftermath of the pandemic. So, an employee’s communication setup needs to be flexible to enable remote task completion without any limitations.
In this progressive working model, a landline is not a viable option for remote work. Employees need to be able to take calls from wherever they are working. Yes, the IT department could provision and reallocate numbers and install physical phonelines in employees’ homes, but when there is an entirely digital option, this is unnecessarily complex.
Globetrotting… from your desk
A common challenge for companies with a global footprint is how to make calls cost-effectively. Making international calls from a landline typically results in astronomical charges, but VoIP offers the capability at a fraction of the price.
VoIP enables businesses to use virtual phone numbers, which, unlike traditional phone numbers, aren’t tied to a physical device. Businesses can give the appearance of being locally present in several countries from one system without actually having a base in any of them.
For businesses working across multiple time zones, automated smart routing ensures calls are diverted to employees working at the time of the call, in the relevant language and with the skillset to handle the query.
Giving the appearance of a local presence is also beneficial to business growth. When sales prospecting, using a local number suggests a degree of proximity, improving pickup rates and, by extension, sales leads.
Work-life balance enabler
How do landline-based employees answer calls when away from their desk? They may be able to set a voicemail to direct people to their mobile, but does this approach promote a healthy work-life balance? The Chartered Institute of Personnel and Development’s Good Work Index 2021 revealed that 56 percent of workers struggle to separate work from home life, so surely there’s a better solution?
While VoIP systems are accessible from an employee’s own device, they use a different phone number, creating a physical distinction between professional and personal life. However, this doesn’t mean that calls should go unanswered if one person is out of office.
VoIP enables group routing, where incoming calls are directed to relevant employees if the recipient is not available. It is possible to create groups according to expertise, working hours or language competencies. Calls are cascaded down these groups until an available employee answers, maintaining high-quality service without putting employees under pressure to be available 24/7.
The landline has served us well, but with dramatic changes to working practices and the looming PSTN switch off, it’s time for an upgrade. With a VoIP phone system, employees benefit from all the features of the landline, but with a modern zing, facilitating international, balanced work for the future. 19th century? You can have your landline back.
Almost 4 Billion Smartphone Users, $90.7 Billion in Mobile Game Revenues, and much more
The mobile ecosystem is changing. Mobile developers build much of their success on data-driven insight, enabled through smart tracking and targeting of users. Stringent (privacy-based) policies from Apple, Google, and regulators have created new challenges for developers, publishers, ad tech companies, and marketers. Despite these challenges, the mobile market—and the games market within it—is more extensive, lucrative, and diverse than ever before.
The total number of smartphone users will reach 3.9 billion worldwide in 2021, representing modest year-on-year growth of +6.1 percent.
Meanwhile, global mobile game revenues via consumer spending will grow to $90.7 billion, a year- on-year growth of +4.4 percent. While growth will continue, mobile companies have been forced to shift their strategies amid the changing market (due to tightening privacy measures across the board).
During this crossroads of the mobile ecosystem, we and our partner Apptopia are proud to publicly launch our 2021 Global Mobile Market Report. A key throughline of this year’s report is contextualizing and analyzing the impact of the market’s disruptive changes.
This article will present some high-level findings from the report, including:
- An overview of the global mobile market by smartphone users and mobile game revenues (via consumer spending, excluding ad revenues).
- A look at some of our revenue and user forecasts towards 2024.
- A concise analysis of the privacy and app store changes rocking the market (and what they mean for mobile’s future).
Smartphone User Numbers Are on the Rise Across the Globe
The number of smartphone users worldwide is fast approaching the four-billion mark. As you can see below, the Asia-Pacific region accounts for over half of 2021’s smartphone users, primarily thanks to highly populated countries like China and India:
Due to growth regions like Central Southern Asia, Sub-Saharan Africa, Latin America, and Southeast Asia, the number of smartphone users worldwide will reach 4.5 billion by the end of 2024, a +6.1 percent CAGR (2019-2024). As always, this growth of users—and the mobile gamers among them—will trickle into game revenues.
Which App Store Accounts for the Most Mobile Game Revenues?
One of the most significant changes in this year’s Global Mobile Market Report is our revamped app- store-revenue model, which breaks down mobile game revenues per app store. Of 2021’s $90.7 billion global mobile game revenues:
- $41.1 billion will come from the iOS platform (45.3 percent of the global number).
- $28.2 billion from Google Play (31.1 percent).
- $21.3 billion from third-party Android app stores (23.5 percent)—mainly via China, where Google Play is banned.
As you can see in the image below, the global mobile games market will generate $116.4 billion in 2024, representing significant growth from 2019:
In the future, we expect Google Play and third-party-store game revenues to outgrow those on iOS. After all, Android’s popularity is continuing to flourish across the globe. And users in Android- first growth markets are enjoying more disposable income, which some will spend on mobile games on their Android devices.
We believe that Apple’s and Google’s privacy changes will have a limited impact on consumer spending across app stores. Newzoo will keep monitoring the impacts and update the forecasts when necessary—as we always do.
Apple vs. Epic and Its Potential Impact on Mobile (Game) Payments
Last year, Epic chose to leverage its strong position in the games market to pressure Apple and Google (especially the former) into loosening app store restrictions. Epic sued both companies for monopolistic behavior.
The U.S. court unveiled the results for the Apple vs. Epic lawsuit earlier this month. The judge ultimately ruled in Apple’s favor on nine-out-of-ten counts, penalizing Apple (via an injunction) for its anti-steering App Store policies for in-app purchases.
These anti-steering policies, which Google also recently implemented, prohibit app sellers from advertising alternate payment systems outside the platform holder’s ecosystem. But what does this mean for the mobile (games) market?
The likely scenario is that developers will be allowed to charge less in external payment options for in-app purchases in the United States if Apple doesn’t appeal to the injunction:
- Developers would not need to pay Apple’s 30 percent cut in this scenario, giving the developers the fuller share of revenues (if they have external payment options in place).
- As developers would bypass the App Store, they may try to pass on savings to consumers, incentivizing them to use third-party payments (rather than Apple’s).
- Apple could therefore lose a significant amount of its App Store revenues if external payments options don’t cause too much friction for consumers.
- Still, it is costly for companies to build, maintain, and support a payment system that is safe and stable. Currently, only large developers can afford to build such systems in-house—or acquire the necessary tech via mergers and acquisitions.
- Payments companies such as Stripe and PayPal, which can provide payment systems for small and mid-sized developers, could benefit here.
While you can learn the potential ripple effect of the judge’s ruling in the full report, we believe that Apple will be forced to open its mobile payment ecosystem across the globe, rather than juggling various policies across different markets.
To offset the potential revenue loss, Apple will continue diversifying its business, especially towards its advertising network. On that note, the mobile advertising ecosystem is also facing significant disruptions, and Apple is again at the center.
Privacy Changes Are Also Poised to Change the Mobile Market, But What Do They Mean for Gaming?
This year, Apple’s App Tracking Transparency (ATT), which requires users to opt in to be tracked, has been another major disruption to the mobile market.
ATT is part of iOS’s 14.5 update, which is significant as our Mobile Device Data shows that 85 percent of iOS users updated to iOS 14.5. And most users are not opting in to be tracked. According to Fyber, opt- in rates for ATT were just 17 percent globally as of mid-September.
To retain some of the tracking ability they had, mobile companies are turning into content fortresses, and companies—including Apple itself—are doubling down on internal ad networks.
Mobile game developers were already adopting hybrid monetization and IP-based-game strategies, and mobile privacy changes are only accelerating these shifts. Understanding the impact of these changes—and how consumers might react to them—means exploring mobile gamers’ motivations, attitudes around in-game ads, and IP preferences.
To help clarify the situation, we went straight to source to spotlight consumer sentiment across these topics, surveying 5,400 mobile gamers across China, the U.S., Germany, and Japan.
In the end, these challenges mean mobile developers and publishers must continue to adapt to offset potential revenue loss. Luckily, the market boasts some of the savviest and most innovative minds in gaming, tech, and indeed the world.
Mobile companies are already rising to the challenge of the new age of mobile, and we’re confident that their successes will continue into 2022 and beyond. We hope you’ll join us for the journey as we navigate the shifting waters of the mobile market together.
This article has been written by Amsterdam-based games and esports data company Newzoo, outlining the state of the global mobile market during 2021, and beyond.
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