British telecommunications giant Vodafone has inked a $1.5 billion 10-year deal with Microsoft to use the tech giant’s generative AI, digital, enterprise, and cloud-based services.
With the partnership, Vodafone aims to bring Microsoft-backed services to more than 300 million businesses and consumers across its European and African markets.
Microsoft and Vodafone
Microsoft and Vodafone Partner to Boost AI, Cloud, and IoT Services in Africa.
As part of the deal, the telecom giant will invest in customer-focused AI underpinned by Microsoft’s Azure, OpenAI, and Copilot technologies. That being said, Vodafone will also replace its physical data centers with the more affordable and scalable cloud services provided by Azure.
Meanwhile, Microsoft, over the next 10 years, will make use of Vodafone’s connectivity services and intends to become an equity investor in the company’s Internet of Things (IoT) platform, which is set to become a standalone business by April 2024.
Last year, Vodafone CEO Margherita Delle Valle identified that there lies a big opportunity in helping businesses digitize, noting that the addressable market was worth $140 billion.
In a statement, she noted that the deal signed with Microsoft chairman and CEO Satya Nadella would “accelerate” the digital transformation of Vodafone’s business clients, “particularly small and medium-sized companies”.
Microsoft to Build Ethical and Unbiased AI Solutions Based on Vodafone’s Framework
Microsoft promised that the AI services Vodafone leverages would be built on the unbiased and ethical privacy and security policies that were already highlighted by the telecom company’s framework for responsible AI development.
The framework prioritizes transparency and ethics when it comes to developing AI-related technologies. Vodafone said it will notify customers whenever they are interacting with an AI algorithm or chatbot.
The London-based telecommunications giant’s approach to AI focuses on human oversight where it ensures the algorithm does not “inadvertently” guide the firm in making decisions “that may affect any group or individual” unfairly.
As part of the deal, Vodafone will help market Microsoft’s suite of services like the Teams Phone Mobile, to its enterprise clients across Europe. Whereas, in Africa, Microsoft will help Vodafone scale its mobile fintech platform M-Pesa which operates in Kenya, Tanzania, and South Africa.
Luka Mucic, the chief financial officer of Vodafone, said Microsoft’s leadership in the AI sector, underpinned by its partnership with OpenAI, would transform telecom customer services.
He also teased a Vodafone AI chatbot powered by Microsoft and OpenAI, called TOBi, that would provide more consistent and intelligent responses to user queries. The chatbot would aid Vodafone’s customer service staff to improve their productivity and the quality of their conversations, rather than entirely replace the workforce.
Microsoft’s chief commercial officer Judson Althoff admitted that Vodafone’s strength in IoT and financial services was an important factor in deciding to venture into the $1.5 billion partnership.
He added that Vodafone’s IoT stack would allow Microsoft to create large-scale data stores and use AI to help customers meet their sustainability goals. The Seattle-based tech giant aims to collaborate with Vodafone to build digital literacy in Africa.
Microsoft Surpasses Apple to Become World’s Most Valuable Company
In a statement, Microsoft CEO Satya Nadella said the company will apply its latest cloud and AI technology to enhance customer experiences of “hundreds of millions of people and businesses” across Africa and Europe and build new products and services while accelerating Vodafone’s transition to the cloud.
On Tuesday, Microsoft’s shares hit a new 52-week high of $394.03. With a market cap of $2.9 trillion, the company displaced Apple, valued at $2.8 trillion, to become the world’s most valuable publicly traded company.