Vodafone and Microsoft have entered into a new ten-year strategic partnership to scale generative artificial intelligence (AI), digital services and cloud services.

The far-reaching partnership will see the companies collaborate in five identified key areas, namely generative AI, scaling the Internet of Things (IoT), digital acceleration in Africa, enterprise growth and cloud transformation.

“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 enterprises (SMEs), and step up the quality of customer experience for consumers,” explained Vodafone Group CEO Margherita Della Valle.

Microsoft CEO and chairperson Satya Nadella added that the new generation of AI will unlock massive new opportunities for every organisation and every industry worldwide.

“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 partners will leverage their respective strengths to transform Vodafone’s customer experience using Microsoft’s generative AI, hyperscale Vodafone’s managed IoT connectivity platform, develop new digital and financial services for businesses, particularly SMEs across Europe and Africa, and overhaul its global data centre cloud strategy.

According to a statement released by the companies, Vodafone will invest $1.5-billion over the next 10 years in cloud and customer- focused AI services developed in conjunction with Microsoft, while Microsoft will use Vodafone’s fixed and mobile connectivity services.

Microsoft also plans to invest in Vodafone’s managed IoT connectivity platform, which will become a separate, standalone business by April, attracting new partners and customers, driving growth in applications and expanding to connect more devices, vehicles and machines.

The companies will use Microsoft Azure OpenAI to deliver frictionless, real-time, proactive and hyperpersonalised experiences across all Vodafone customer touchpoints, including its digital assistant TOBi.

Vodafone employees will also be able to leverage the AI capabilities of Microsoft Copilot to transform working practices, boost productivity and improve digital efficiency.

Microsoft intends to help further scale M-Pesa by housing it on Azure and enabling the launch of new cloud-native applications.

The companies are also launching a purpose- led programme that seeks to enrich the lives of 100-million consumers and one-million SMEs across Africa, boost financial services innovation and build a community of certified developers, while enhancing digital literacy, skilling and youth outreach programmes, as well as offering digital services to the underserved SME market.

In enterprise growth, Vodafone will extend its commitment to distributing Microsoft services, including Microsoft Azure, security solutions and modern work offerings such as Microsoft Teams Phone Mobile, as part of its strategy to become Europe’s leading platform for business.

This enables business customers to deploy Microsoft’s cloud-based services at pace with low adoption and running costs, as well as support the estimated 24-million SMEs across Europe through the provision of a managed platform that grows with their business.