In order to provide generative AI, digital, enterprise, and cloud services to over 300 million organisations and consumers throughout its European and African regions, Vodafone (VOD.L) and Microsoft (MSFT.O) have reached a 10-year cooperation agreement.
The British corporation said that it will replace physical data centres with more affordable and scalable Azure cloud services, as well as spend $1.5 billion in customer-focused AI created with Microsoft’s Azure OpenAI and Copilot technologies.
Microsoft will then assist in growing Vodafone’s mobile banking platform in Africa and convert into an equity investor in the managed Internet of Things (IoT) platform when it is spun off as a separate company by April.
Vodafone’s Chief Executive Margherita Della Valle, who is under pressure to return the group to profit growth, has identified an opportunity to help businesses digitise, noting in May that the addressable market was worth 140 billion euros.
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She said the deal, which she signed with Microsoft’s Chairman and CEO Satya Nadella, would “accelerate the digital transformation of our business customers, particularly small and medium-sized companies”.
Vodafone’s Chief Financial Officer Luka Mucic said Microsoft’s leadership in AI, underpinned by its OpenAI partnership, would transform the telco’s customer services.
“That’s the part that is really going to catch each and every one of our customers,” he said on Tuesday, adding that a Microsoft AI-underpinned TOBi chatbot would provide more consistent and intelligent responses to queries.
The technology would help Vodafone’s customer service staff improve productivity and the quality of their conversations, the company said, rather than replacing them with AI.
Microsoft’s Chief Commercial Officer Judson Althoff said Vodafone’s strength in IoT and financial services were strategically important.
“The IoT assets are critical in helping us address the sustainability needs of so many of our customers in hard-to-abate sectors,” he said.
Microsoft deploys “digital twins” to model manufacturing environments so that process improvements can be tested in the cloud.
“Vodafone’s IoT stack allows us to go into those environments, model the environment, create large-scale data stores, and use AI to help customers meet their sustainability goals,” he said.
Vodafone’s M-PESA mobile money platform, which operates in Kenya, Tanzania, South Africa and other African countries, shared the same objectives as Microsoft in the region, such as building digital literacy.
“We are excited to bring generative AI capabilities to help customers make more intelligent financial decisions,” he said.
