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Vodafone to Shift Data Processing & Storage to Google Cloud

Vodafone Group Plc VOD recently inked an agreement with Alphabet Inc. GOOGL for an undisclosed amount to shift its data processing and storage facilities to Google Cloud. The deal is likely to facilitate the digital transformation of the company and enhance its service capabilities for superior customer experience.

In order to amass the vast ocean of data from 625 million customers and networks spanning 24 countries, Vodafone has launched an internal platform dubbed “Neuron”. This Big-Data analytics platform allows the company to utilize real-time data to gain critical insights for network planning, optimization and personalized services.

Vodafone presently aims to bring Neuron within Google Cloud to enable it to host data analytics, business intelligence and machine learning capabilities. This, in turn, is likely to help bring multiple data sources into a standardized format and make its existing software cloud-compatible, thereby enhancing operations.

Reportedly Microsoft Corporation MSFT and Amazon.com, Inc. AMZN were the other contenders of the Vodafone deal. The agreement seems to be the call of the hour as telecom carriers are facing data deluge with wide proliferating of smartphones and superfast networks. Most telecom service providers are either restructuring their aging data centers with updated infrastructure or outsourcing it to huge server firms with technology prowess and cloud backup facilities. Vodafone has chosen the second alternative as it is much more cost effective.

Notably, Vodafone is increasing focusing on rolling out superfast 5G technology throughout the United Kingdom. Last week, it inked an agreement with Openreach, the digital networking business unit of BT Group Plc, to extend its broadband coverage in the country. The deal would enable Vodafone to offer its Gigafast Broadband service to three new cities in the United Kingdom, namely Birmingham, Bristol and Liverpool by spring 2020 through Openreach’s Fiber-to-the-Premises (FTTP) network.

The FTTP network of Openreach is one of the most extensive broadband networks in the United Kingdom, covering more than 1.9 million premises. Consequently, it is expected to provide Vodafone an unrivalled coverage to promote its services and thereby augment subscriber base. Openreach aims to expand its connectivity to 500,000 premises in the three cities by mid-2021 under phase one of its strategic agreement with Vodafone.

Riding on such growth drivers, the stock has gained 2.8% year to date while the industry declined 9.4%.


 

Vodafone currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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