Vodafone to partner with Microsoft to improve customer service with Generative AI

Vodafone and Microsoft have announced a massive 10-year partnership to transform Vodafone’s customer experience using Microsoft’s AI and cloud services. Vodafone will invest $1.5 billion over 10 years in the strategic collaboration.

The partnership will provide highly personalised customer experiences across Vodafone’s platforms, leveraging generative AI and Microsoft’s Copilot. Vodafone aims to boost productivity and efficiency for employees through Copilot’s AI capabilities.

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Microsoft intends to invest in and partner with Vodafone’s standalone global IoT platform, connecting 175 million devices worldwide. This opens opportunities for third-party developers on Azure through open APIs.

In Africa, Microsoft will help scale M-Pesa, already Africa’s largest fintech platform, and launch new cloud-native apps on Azure. A purpose-led program seeks to enrich 100 million African consumers and 1 million SMEs through digital literacy, skilling, and access to financial services.

For European enterprises, Vodafone will distribute Microsoft’s cloud-based services including Azure, security, and Teams Phone. This supports Vodafone’s goal to become Europe’s top platform for business.

Finally, Vodafone will modernise its data centres on Azure, improving responsiveness and operational efficiency. Virtual data centres will replace physical ones across Europe.

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Despite outlining a raft of measures that should ultimately boost customer retention, investors may be disappointed by the muted reaction in Vodafone shares, which barely budged on Tuesday.

“Vodafone might have been hoping that news of a strategic partnership with Microsoft, involving the market’s hottest theme, AI, would have delivered more of a kicker to a moribund stock this morning,” said AJ Bell’s Russ Mould.

“The company is planning a significant outlay as it looks to use Microsoft’s generative AI technology to build out its ‘Internet of Things’ connectivity plan. It wants to develop new digital and financial services for small and medium sized businesses in Africa and Europe and revamp its data centre cloud strategy.

“As the benefits of the partnership come through, they may help to provide some forward momentum to a business which has been stuck in reverse for years.”

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