Vodafone, Microsoft R28bn deal to boost AI

Vodafone Group has struck an agreement with Microsoft Corp to invest $1.5 billion (about R28 billion) over the next decade to develop a range of businesses including artificial intelligence, digital payments and the Internet of Things.

As part of the agreement, Vodafone will use OpenAI technology running on Azure to enhance customer service operations including its consumer chatbot, and Vodafone employees will have access to Microsoft Copilot, the companies said in a statement yesterday.

For Vodafone, the deal helps CEO Margherita Della Valle streamline company operations and enhance its offers for the enterprise division, which she’s prioritised. It will also allow Vodafone to sell more Microsoft services to business clients, including Azure and Teams, and allow the telecom operator to move away from using its own data centres and onto Azure.

“Generative AI is really changing the game in the opportunities that we can build new services and new capabilities,” chief technology officer Scott Petty said in an interview.

Microsoft also intends to invest an undisclosed amount in Vodafone’s internet-of-things division, which the UK-based telecommunications carrier plans to carve out by April.

For a brief time after the dotcom bubble burst, Vodafone was valued at about as much as Microsoft. But in the last two decades, the companies’ fortunes have strayed as the telecommunications industry has struggled to make revenues that keep pace with its regular heavy investments in network infrastructure.

Vodafone will run its popular mobile money service M-Pesa on Azure, which Vodafone said will let it launch new cloud-based apps. M-Pesa is one of the world’s biggest mobile-based financial services, boasting more than 51 million customers across seven countries in Africa, according to Vodafone’s website.