Vodafone, Microsoft Sign $1.5 Billion, 10-Year Cloud, AI Partnership

Network provider Vodafone and software giant Microsoft have signed a huge, 10-year deal to bring generative AI, digital services and the cloud to more than 300 million businesses across Europe and Africa.

Vodafone will invest $1.5 billion over the next 10 years in cloud and customer-focused AI services developed with Microsoft. Additionally, Microsoft will use Vodafone’s fixed and mobile connectivity services.

Microsoft also intends to invest in Vodafone’s managed internet of things (IoT) connectivity platform, which will become a separate business by April. The company aims to attract new partners and customers, driving growth in applications and expanding the platform to connect more devices, vehicles and machines.

Vodafone, Microsoft Commit to 'Digital Future'

Vodafone said the digital services generated by the new partnership will use generative AI to provide “a highly personalized and differentiated customer experience” across multiple channels. They will be built on “unbiased and ethical privacy and security policies” under Vodafone’s established framework for responsible AI. 

Vodafone's Margherita Della Valle

Margherita Della Valle, Vodafone Group chief executive, described the deal as “a bold commitment to the digital future of Europe and Africa.”

She said the partnership with Microsoft will “accelerate the digital transformation of our business customers, particularly small and medium-size companies, and step up the quality of customer experience for consumers.”

Related:Microsoft Adds Premium Functions to Copilot with Pro Version

Satya Nadella, chairman and CEO, said AI “will unlock massive new opportunities for every organization and every industry around the world.”

Microsoft's Satya Nadella

With Vodafone, Microsoft will “apply the latest cloud and AI technology to enhance the customer experience of hundreds of millions of people and businesses across Africa and Europe.” He said the companies will “build new products and services and accelerate the company’s transition to the cloud.”

The Vodafone-Microsoft Partnership In Detail

To increase customer satisfaction, the companies will use Microsoft Azure OpenAI to deliver “frictionless, real-time, proactive,and hyper-personalised experiences across all Vodafone customer touchpoints.” This includes its digital assistant, TOBi, which is available in 13 countries. Vodafone employees will also be able to use Microsoft Copilot to “transform working practices.”

Microsoft will invest in Vodafone’s new, standalone global IoT-managed connectivity platform, which connects 175 million devices and platforms worldwide. Vodafone will also become part of the Azure ecosystem, making the IoT platform available to developers and third parties using open APIs.

In Africa, Microsoft intends to further scale M-Pesa, the largest financial technology platform on the continent. It will house it on Azure and enable the launch of new cloud-native applications.

The companies are also launching a purpose-led program that seeks to help 100 million consumers and a million SMEs across Africa. The goal is to enhance digital literacy, skilling and youth outreach programs, and offer digital services to the underserved SME market. The partnership aims to boost financial services innovation, building a community of certified developers.

Meanwhile, Vodafone will extend its commitment to distributing Microsoft services. It will also modernize its data centers on Microsoft Azure. Vodafone said it will be able to replace multiple physical data centers with virtual ones across Europe.

Last year Vodafone said it was seeking to drive upward of half of its revenue in North America through partners. A few weeks prior to that, the British firm announced 11,000 layoffs over the next three years to increase “commercial agility and free up resources.”