Vodafone has announced a 10-year deal with Microsoft in a bid to scale its generative AI, digital services and cloud platforms to more than 300 million businesses, public sector organizations, and consumers across Europe and Africa.

The British multinational telecommunications company said it plans to invest $1.5 billion in cloud and customer-focused AI services developed in conjunction with the tech giant, giving Microsoft access to Vodafone’s fixed and mobile connectivity services.

In exchange, Microsoft said it intends to become an equity investor in Vodafone’s managed Internet of Things (IoT) connectivity platform, which will become a separate, standalone business by April.

Vodafone reported better top-line growth in July, driven by higher prices in the UK and improvements in Germany, Italy and Spain, which marked a positive start for the new Chief Executive Margherita Della Valle’s turnaround plan.

Della Valle, aiming to return the company to growth, described the partnership as a “bold commitment” to the digital future of Europe and Africa. “This unique strategic partnership with Microsoft will accelerate the digital transformation of our business customers, particularly small and medium-sized companies, and step up the quality of customer experience for consumers,” she continued.

“This new generation of AI will unlock massive new opportunities for every organization and every industry around the world,” said Microsoft CEO Satya Nadella, adding that they were “delighted” by the collaboration.

According to Reuters, Vodafone’s Chief Financial Officer Luka Mucic stated that Microsoft’s expertise in AI, bolstered by its partnership with OpenAI, is set to revolutionize the telecom company’s customer services.

He said, “That’s the part that is really going to catch each and every one of our customers,” adding that a TOBi chatbot, enhanced by Microsoft’s AI technology, will offer more coherent and intelligent responses to inquiries.

Which areas will Microsoft and Vodafone collaborate in?

The companies have pinpointed five primary areas for collaboration, one of which includes using generative AI to enhance customer satisfaction. This will involve leveraging Microsoft Azure OpenAI to provide real-time, personalized experiences for Vodafone customers.

Vodafone also intends to become part of the Azure ecosystem making the IoT platform available to developers and third-party communities using open APIs. Microsoft also hopes to help further scale M-Pesa, which is the telecoms company’s mobile money service in Africa, while enhancing digital literacy.

Aside from cloud transformation, the Berkshire-based company aims to distribute Microsoft services across businesses in Europe.

Featured Image: Mike Mozart / Canva / Vodafone

Suswati Basu

Freelance journalist

Suswati Basu is a multilingual, award-winning editor and the founder of the intersectional literature channel, How To Be Books. She was shortlisted for the Guardian Mary Stott Prize and longlisted for the Guardian International Development Journalism Award. With 18 years of experience in the media industry, Suswati has held significant roles such as head of audience and deputy editor for NationalWorld news, digital editor for Channel 4 News and ITV News. She has also contributed to the Guardian and received training at the BBC As an audience, trends, and SEO specialist, she has participated in panel events alongside Google. Her career also includes a seven-year tenure at the leading AI company Dataminr, where she led the Europe desk and launched the company's first employee resource group for disabilities. Before this, Suswati worked as a journalist in China for four years, investigating censorship and the Great Firewall, and acquired proficiency in several languages. In recent years, Suswati has been nominated for six awards, including the Independent Podcast Awards, International Women's Podcast Awards, and the Anthem Awards for her literary social affairs show. Her areas of speciality span a wide range, including technology, Diversity, Equity, and Inclusion (DEI), social politics, mental health, and nonfiction books.