This collaboration will see the transformation of Vodafone's customer experience through the application of Microsoft's generative AI. It will also involve the expansion of Vodafone's managed IoT connectivity platform, the development of new digital and financial services targeting businesses, especially SMEs in Europe and Africa, and a complete revamp of its global data centre cloud strategy.

Vodafone has committed to investing $1.5 billion over the next decade in cloud and AI services tailored to customers, developed jointly with Microsoft. In turn, Microsoft will utilise Vodafone's fixed and mobile connectivity solutions.

Furthermore, Microsoft plans to invest in Vodafone's managed IoT connectivity platform, which is set to become an independent business by April 2024. This new entity will seek to attract additional partners and customers, fuelling growth in applications and broadening the platform to connect more devices, vehicles, and machines.

The digital services arising from this partnership will leverage cutting-edge generative AI technology to offer a highly personalised and distinct customer experience across various channels. These services will be developed under Vodafone's robust framework for responsible AI, adhering to unbiased, ethical privacy, and security policies.

Margherita Della Valle, Vodafone Group Chief Executive, said: "Today, Vodafone has made 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."

"This new generation of AI will unlock massive new opportunities for every organization and every industry around the world," said Satya Nadella, chairman and CEO, Microsoft. "We are delighted that together with Vodafone we 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, build new products and services, and accelerate the company's transition to the cloud."

The companies have identified five key areas of collaboration: 

• Generative AI - The companies will harness the capabilities of Microsoft Azure OpenAI to enhance customer satisfaction by providing seamless, real-time, proactive, and hyper-personalised experiences across Vodafone's customer touchpoints, including its digital assistant TOBi (available in 13 countries). Vodafone employees will also utilise Microsoft Copilot's AI features to transform work practices, increase productivity, and improve digital efficiency.
• Scaling IoT - Microsoft plans to invest in Vodafone's new, independent global Internet of Things (IoT) managed connectivity platform, which connects 175 million devices and platforms globally. Vodafone aims to join the Azure ecosystem, making its IoT platform accessible to a wide developer and third-party community through open APIs.
• Africa Digital Acceleration - Microsoft will support the expansion of M-Pesa, Africa's largest fintech platform, by integrating it with Azure and enabling new cloud-native applications. Additionally, the companies will launch a program aimed at improving the lives of 100 million consumers and 1 million SMEs in Africa. This program focuses on enhancing digital literacy and skilling, supporting youth outreach, and providing digital services to the underserved SME market. The goal is to spur innovation in financial services and build a community of certified developers.
• Enterprise Growth - Vodafone will increase its distribution of Microsoft services, including Azure, security solutions, and modern work offerings like Microsoft Teams Phone Mobile. This is part of Vodafone's strategy to become Europe's top platform for business, offering low-cost adoption and operation of Microsoft's cloud-based services. This strategy supports the approximately 24 million SMEs across Europe with a managed platform that scales with their growth.
• Cloud Transformation - Vodafone is set to expedite its cloud transformation by modernising its data centres with Microsoft Azure. This move aims to enhance its responsiveness to customers, while streamlining and reducing the operational costs of its IT infrastructure. Consequently, Vodafone will transition from multiple physical data centres to virtual ones across Europe. This shift will not only simplify IT operations but also reduce energy consumption, aligning with Vodafone's sustainable business strategy.

Luc Vidal, Head of M2M/IoT Business and Mobility at BICS, commented: “Vodafone's partnership with Microsoft shows the sustained growth we are seeing for IoT service and will likely only fuel increased attention in ‘connectivity twins’. They’re the missing piece enterprises need to virtually clone IoT devices, including their connectivity components, for a single real-time view of their end-to-end IoT solutions, along with all device and application components. Digital twins turn device-centric information into a business visualization allowing more efficient decisions.

“As the volume of IoT devices continues to ramp up, these connectivity twins will be essential for enterprises to troubleshoot problems faster, better predict downtime and maintenance, facilitate end-to-end security, and improve overall service quality. Without these, businesses deploying IoT will effectively be blind, lacking real control over their systems and devices.”