Put your retention and acquisition spend where it pays back.
AI-enabled operating models for better business performance
Formalus works with independent mobile operators, MVNOs, eSIM providers and mobile challengers across Europe & MENA to improve customer lifetime contribution, retention and acquisition economics. We redesign the commercial decisions behind them, build the investment case, and show where AI and machine learning can add measurable value.
Best fit: 100,000–5 million active subscribers. A guide, not a cut-off. Customer, commercial and operating economics, not network engineering.
Headline measure: incremental retention contribution per £1 of retention spend.
Commercial AI transformation for mobile, retail and membership organisations across Europe & MENA.
Michael Williamson has run this work inside mobile operators, with the P&L on the line.
A better churn prediction does not automatically improve profit.
Commercial AI transformation starts with the money. A churn model tells you who might leave. It does not tell you who is worth keeping, at what cost, or whether an offer changes anything.
The pressure is rising as price alone stops being enough. GSMA Intelligence consumer research found MVNO customers churn more than MNO customers, 19% against 13%, with a cheaper plan the leading reason (GSMA Intelligence, 2026). Winning on price only invites the next cheaper offer; the margin is in knowing whom to keep, and how.
Every customer your model flags falls into one of four groups.
Would have stayed anyway
The offer gives away margin for nothing.
Will leave whatever you offer
The offer is spent and the customer still goes.
Worth keeping, but not at this price
The incentive costs more than the contribution it keeps.
Changed by the offer, and worth it
The only group where retention spend pays back.
That is a decision problem, not a modelling problem. The value comes from changing who gets an offer, which offer, who approves it and how consistently the business acts.
The rules must differ by business model.
Where the value sits, from data to contribution.
- Customer and behavioural dataUsage, billing, tenure, contract and contact history.
- Churn and value modelsWho might leave, and what each customer is worth.
- Commercial decision rulesWho gets an offer, which offer, and the spending limit.
- Intervention economicsWhether the offer changes the outcome, and at what cost.
- Operational workflowsWho acts, through which channel, and how consistently.
- Measured contributionValue kept against a baseline agreed before the change.
Most of the commercial value sits in the gold steps in the middle. That is where Formalus works.
Why Formalus, and not another platform, pilot or consultancy?
Each alternative can be useful. The difference is who decides what should change, and whether the investment is justified before you make it.
Your existing teams and processes
Your customer value management, retention and analytics teams know your base best. Changing the decision rules they work to, across several functions, is hard to do from inside one of them.
A CRM, campaign or AI platform, or another pilot
Platforms run decision rules at scale, and pilots show what a model can do. Neither decides which rules are worth running, or whether the return justifies the spend. Formalus is not a customer value management platform or CRM consultancy; it decides what those tools should do.
A large consultancy
Brings capacity for programmes that span the whole business. Scope and price usually reflect that scale.
Formalus
An independent operator who has run churn scoring and customer value management inside O2 and Vodafone, in prepay and SIM-only businesses. We design the decision changes and build the investment case; your teams and technology partner deliver them. We sell no software, licences or implementation.
Retention and acquisition decisions run across customer care, digital, outbound and finance. Each redesigned workflow is built on trusted customer data, controlled access and clear oversight from the start, not added after the build.
Built on running mobile businesses, not on AI theory.
Michael Williamson has been accountable for the customer economics this page describes.
As General Manager of O2 Pay & Go, he took the business from fourth to first in UK prepay, doubling the customer base, trebling revenue and growing ARPU from £92 to £142. It became the most valuable prepay base in Western Europe, generating £1.1bn of controllable contribution a year and 77% of O2’s total profit across every segment, including postpay consumer, SME and enterprise. Around 60% of its customers were SIM-only: the same easy-to-switch economics that eSIM now extends.
At Vodafone, as Global General Manager for Commercial Growth, he led prepay commercial growth across more than 30 countries and defined the acquisition architecture for prepaid SIM-only across four markets.
At O2, retention ran on predictive churn models and personalised retention offers across 12 million customers, and at Vodafone on churn scoring and customer value management. The lesson that carries into Formalus is practical: a score is only worth something when the business changes what it does with it, and someone is accountable for whether that paid.
£1.1bncontrollable contribution a year
O2 Pay & Go.
77%of O2’s total profit
Across every segment, including postpay and enterprise.
2×customer base
With revenue trebled, at O2 Pay & Go.
60%SIM-only
Share of O2 Pay & Go customers.
“Michael is a strong, seasoned leader with excellent customer vision – and able to turn that into tangible commercial plans. Transformed Vodafone’s thinking about prepay mobile in a very short timeframe. Made a major impact across Vodafone’s operations across EMEA. One of the very best.”
These results come from executive roles held before Formalus was founded. They are not Formalus client results, and none is attributed to machine learning.
The same churn flag does not justify the same offer for every customer.
A simplified example. The figures are illustrative; your own data decides the real answer.
Three customers, one churn flag, one £120 offer.
| Customer | Offer cost | Contribution kept* | Net |
|---|---|---|---|
| High value, likely to stay | £120 | £40 | −£80 |
| High value, likely to leave | £120 | £420 | +£300 |
| Low value, likely to leave | £120 | £60 | −£60 |
Same flag, same offer, three different answers. One customer justifies the spend.
*Additional future contribution retained because of the offer, compared with making no offer, after service costs.
To size it for your business: take the difference between the best and worst answer, and multiply it by the number of customers you flag each month.
The same question, asked earlier.
Two acquisition routes can bring in the same number of customers at the same cost and still produce very different results. The questions a business case would test:
- What does each channel and proposition cost per customer, including incentives?
- What lifetime contribution does each cohort actually produce after service costs?
- How long does each cohort take to pay back?
- Which growth is worth buying, and which is not?
A framework for the analysis, not a result. No figures are implied.
What a Value Map produces.
Two exhibits from the Value Map, shown with illustrative examples, not client results. The heatmap shows where the money is; the data-gap register shows what the business cannot yet see. Every unanswerable question becomes a requirement.
| Value question | Answerable today? | Why not | Becomes a requirement |
|---|---|---|---|
| What share of new customers are spinners? | No | New SIMs are not matched to previously churned customers | Match new activations to churned customers |
| How many customers churn in month two? | Partly | Churn is reported monthly, not by tenure | Report churn by tenure cohort |
| What does each save offer cost against the contribution it keeps? | Partly | Offer cost is tracked; contribution kept is not | Measure incremental contribution against holdout groups |
See the measures we use
- ARPU
- Average revenue per user.
- MPU
- Margin per user, after the direct costs of serving them.
- SAC
- Subscriber acquisition cost: incentives, commissions and marketing per new customer.
- SRC
- Subscriber retention cost: what it costs to keep a customer, offers included.
- Controllable contribution
- The contribution the commercial team can actually influence, after the costs it controls.
- CLV
- Customer lifetime value: total contribution over the life of the relationship.
- Customer churn
- Customers lost in a period.
- Early-life churn
- Customers lost within their first 90 days.
- Nursery programme
- The treatment that carries new customers safely beyond 90 days.
- Spinners
- Customers who churn off one SIM only to come back on another, costing SAC twice for the same person.
- Activation rate
- The share of SIM-only customers who actually top up or use the SIM on first use.
- Reactivation rate
- Dormant pay-as-you-go customers brought back with a top-up.
Keep the customers worth keeping. Win the customers worth winning.
Two executive-sponsored programmes, both delivered through the same Formalus Value Architecture. Your teams keep running retention and acquisition day to day. Established operators usually start with retention; for newer operators and fast-growing markets, including parts of MENA, acquisition economics may come first.
Mobile Customer Value & Retention
Headline measure: incremental retention contribution per £1 of retention spend.
Operators can spend heavily keeping customers who would have stayed, or on incentives that cost more than the contribution they protect. The aim is not the lowest churn rate. It is a more profitable customer base. For MVNOs and eSIM providers, where wholesale costs and low switching effort narrow the margin for error, getting each retention decision right matters even more.
Decisions that may need redesign
- Next-best-action and suppression rules: who gets which offer, at what value against SRC, and who gets none
- Different rules for contract, prepay, SIM-only and eSIM customers
- Value-added services and bundles that lift ARPU without discounting
- Reactivation offers for dormant pay-as-you-go customers
What Formalus helps establish
- Where intervention genuinely changes the outcome
- The redesigned decision rules, roles and controls
- The investment case, baseline and benefit measures
A typical first paid engagement is a Phase 1 Value Focus day, £2,500, credited in full against a Value Map. Typical Value Map scope: one market, one customer base and one high-value or high-churn cohort.
Optional Value Blueprint workstreams, added only when the Value Map shows the value: Margin & Revenue Assurance; Fraud & Digital Trust.
Possible measures
Customer churn · economically avoidable churn · ARPU · MPU · SRC · CLV · controllable contribution · reactivation rate · incremental retention contribution
Relevant experience: predictive churn models and personalised retention offers across 12 million O2 customers, in a business generating £1.1bn of controllable contribution a year.
Mobile Acquisition & Growth Economics
Subscriber growth is not the same as profitable growth. Channels, propositions, incentives and customer cohorts can produce very different lifetime contribution once acquisition and service costs are counted.
Decisions that may need redesign
- Where acquisition budget goes, by channel and proposition, judged on SAC and contribution, not gross additions
- Activation: getting SIM-only customers to top up on first use
- Early life: the first 90 days and the nursery programme that carries customers beyond them
- Spinners: not paying acquisition cost twice for the same customer on a new SIM
Possible measures
SAC · activation rate · early-life churn · retention beyond 90 days · spinner rate · cohort CLV · payback period · incremental growth contribution
Typical Value Map scope: early customer life and the first 90 days.
Relevant experience: taking O2 Pay & Go from fourth to first in UK prepay, and defining Vodafone’s prepaid SIM-only acquisition architecture.
One method. You decide whether to take each next step.
Both mobile programmes run through the Formalus Value Architecture. The first step is a Free AI Opportunity Assessment; the typical first paid step is a Phase 1 Value Focus day, £2,500, credited against a Value Map.
- Free Value Signal Free AI Opportunity Assessment Is there enough commercial value to investigate? Free Get Your Free Assessment Sponsor agrees a Value Focus day
- Phase 1 Value Focus Executive Sizing Day How much is at stake, and is a Value Map worth it? £2,500 · one day, credited See Value Focus Sponsor signs the Value Map charter
- Phase 2 Value Map Discovery & Audit Where is value being won and lost? From £15,000 See Value Map Leadership prioritises the workstreams
- Phase 3 Value Blueprint Requirements, Specification & Redesign What must change, and is the investment justified? From £25,000 See Value Blueprint Board approval; baseline locked
- Phase 4 Value Assurance Support through the build Is the build preserving the value case, and are people working the new way? From £5,000 a month See Value Assurance Alongside: your technology partner builds Go-live; assurance complete
- Phase 5 Value Ledger Value Realisation & Optimisation Is the investment delivering attributable value? From £5,000 a month See Value Ledger The next justified Value Map
Your leadership owns the result. We design the change. Your technology partner builds it.
Operator leadership
- Owns the commercial outcome
- Approves the investment case
- Sponsors the changes
Formalus
- Assesses the opportunity
- Designs the commercial decision changes
- Develops the business case
- Provides Value Assurance and the Value Ledger, as commissioned
Commercial and operational teams
- Provide data and process knowledge
- Validate the design
- Run the changed processes day to day
Your technology partner
- Detailed technical design
- Build and integration
- Deployment and operation
Every number is labelled: illustrative (an example, like the table above), modelled (from your data and stated assumptions), measured (against a baseline agreed before the change) or operator evidence (previous executive roles at O2 and Vodafone, not Formalus client work).
Formalus is independent of software, licence and implementation sales, so the recommendation follows the business case: the technology you need, when you need it. Any referral or delivery-related interest is disclosed before you decide.
Churn is still expensive, despite the retention activity already in place.
Early-life churn and spinners are eating acquisition spend.
A CRM, customer value management or AI investment is on the table.
Existing churn or value models produce insight, but decisions have not changed.
Where are you losing more value: churn, under-monetised customers or cost to serve?
Start with a Free AI Opportunity Assessment with Michael Williamson: a free 60-minute executive discussion, followed by a concise written assessment. We look at the result you want to improve, the decisions behind it and whether there is an opportunity worth investigating.
An initial conversation, not a business case. You leave with an initial view of the opportunity and an honest recommendation, including whether to proceed at all.
Get Your Free Assessment