Vodafone, Microsoft ink mammoth $1.5 billion deal to bring AI, IoT to small businesses across Africa, Europe

Vodafone and Microsoft have entered into a groundbreaking 10-year partnership aimed at providing generative AI, digital, enterprise, and cloud services to over 300 million businesses and consumers spanning Vodafone’s European and African markets, as per a Reuters report.

As part of the collaboration, the British telecommunications giant will invest $1.5 billion in customer-centric AI technologies developed using Microsoft’s Azure OpenAI and Copilot capabilities.

Additionally, Vodafone plans to transition from physical data centres to the more cost-effective and scalable Azure cloud services for its services in Africa and some parts of the European market.

To reciprocate, Microsoft will become an equity investor in Vodafone’s IoT (Internet of Things) platform, which is slated to become a standalone business by April 2024, as reported by Reuters. The tech giant will also play a role in expanding Vodafone’s mobile financial platform in Africa.

Luka Mucic, Vodafone’s Chief Financial Officer, highlighted Microsoft’s leadership in AI, particularly through its OpenAI partnership, which is expected to revolutionize the telco’s customer services. Said, Mucic, “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.”

Judson Althoff, Microsoft’s Chief Commercial Officer, underscored the strategic importance of Vodafone’s strengths in IoT and financial services.

He emphasized that Vodafone’s IoT assets would play a crucial role in addressing sustainability challenges in various sectors by leveraging Microsoft’s digital twin technology. “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.

Althoff also commended Vodafone’s M-PESA mobile money platform, operating in several African countries, for sharing common objectives with Microsoft in the region, such as promoting digital literacy. The partnership aims to bring generative AI capabilities to enhance customers’ financial decision-making processes.

The alliance signifies a significant step towards advancing digital and AI-driven solutions in the telecommunications and technology sectors, promising to deliver innovative services to businesses and consumers alike across Europe and Africa.

(With inputs from agencies)