Vodafone and Microsoft sign 10-year Strategic Partnership Focused on Generative AI, Digital Services, and the Cloud

Author photo: Chantal Polsonetti
ByChantal Polsonetti
Category:
Acquisition or Partnership

Mobile telecom provider Vodafone and Microsoft announced a new, far-reaching 10-year strategic partnership designed to transform Vodafone’s customer experience using Microsoft’s generative AI; hyperscale Vodafone’s leading managed IoT Generative AIconnectivity platform; develop new digital and financial services for businesses, particularly SMEs across Europe and Africa; and overhaul its global data center cloud strategy.

Vodafone will invest $1.5 billion over the next 10 years in cloud and customer-focused AI services developed in conjunction with Microsoft while Microsoft will use Vodafone’s fixed and mobile connectivity services.  Microsoft also intends to invest in Vodafone’s managed IoT connectivity platform, which will become a separate, standalone business by April 2024.

The digital services generated by the new partnership will use the latest generative AI technology to provide a highly personalized and differentiated customer experience across multiple channels.

The companies have identified five key areas of collaboration:

  • Generative AI: To increase customer satisfaction, the companies will apply the power of Microsoft Azure OpenAI to deliver frictionless, real-time, proactive and hyperpersonalized experiences across all Vodafone customer touchpoints, including its digital assistant TOBi (available in 13 countries). Vodafone employees will also be able to leverage the AI capabilities of Microsoft Copilot to transform working practices, boost productivity and improve digital efficiency.

  • Scaling IoT: Microsoft intends to invest in Vodafone’s new, standalone global Internet of Things (IoT)-managed connectivity platform, which connects 175 million devices and platforms worldwide. Vodafone also plans to become part of the Azure ecosystem making the IoT platform available to a vast developer and third-party community using open APIs.

  • Africa digital acceleration: Microsoft intends to help further scale M-Pesa, already the largest financial technology platform in Africa, by housing it on Azure and enabling the launch of new cloud-native applications. The companies are also launching a purpose-led program that seeks to enrich the lives of 100 million consumers and 1 million SMEs across the African continent. The goal is to enhance digital literacy, skilling, and youth outreach programs, as well as offer digital services to the underserved SME market. The partnership aims to boost financial services innovation, building a community of certified developers.

  • Enterprise growth: Vodafone will extend its commitment to distributing Microsoft services, including Microsoft Azure, security solutions, and modern work offerings, such as Microsoft Teams Phone Mobile, as part of its strategy to become Europe’s leading platform for business. This enables business customers to deploy Microsoft’s cloud-based services at pace with low adoption and running costs, as well as support the estimated 24 million SMEs across Europe through the provision of a managed platform that grows with their business.

  • Cloud transformation: Vodafone will accelerate its cloud transformation by modernizing its data centers on Microsoft Azure. This will improve its responsiveness to customers, while simplifying and reducing the operational costs of its IT estate. As a result, Vodafone will be able to replace multiple physical data centers with virtual ones across Europe, simplifying and reducing the operational costs of its IT estate, as well as reducing energy requirements and helping deliver against its sustainable business strategy.

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