Vodafone has struck a billion-pound deal with Google as it looks to deepen its AI and cloud offering to customers.

The British telco today unveiled the 10-year tie-up, which will include using Google Cloud’s gen AI across its TV set top boxes and Google Cloud’s Vertex platform to build machine learning models and AI applications powered by Google’s Gemini models.

The deal will also include the development of a new cloud-native cybersecurity service which will use Google Cloud’s Security Operations platform, as well as offering Google cloud storage options for customers.

The deal represents a strengthening in Vodafone’s partnership with Google, which already provides analytics and marketing services with its Android operating system powering the firm’s set top boxes. It follows a $1.5bn deal signed with Microsoft earlier this year which saw Vodafone give up its own European data centres in favour of using Azure cloud services.

Margherita Della Valle, Vodafone Group chief executive, said: “Together, Vodafone and Google will put new AI-powered content and devices into the hands of millions of more consumers. Using these services, our customers can discover new ways to learn, create and communicate, as well as consume TV, on a scale we haven’t seen before.”

“Our expanded partnership with Vodafone will help bring our most advanced AI products and services, including our Gemini models, to more people across Europe and Africa,” said Sundar Pichai, CEO of Google and Alphabet.

The deal comes after the UK’s competition regulator dealt a blow to Vodafone’s proposed merger with rival Three after the watchdog said it had concerns over the agreement.

The Competition and Markets Authority said it had provisionally concluded that the merger would lead to price increases for tens of millions of mobile customers, or see customers get a reduced service such as smaller data packages in their contracts.

The CMA said it has “particular concerns that higher bills or reduced services would negatively affect those customers least able to afford mobile services as well as those who might have to pay more for improvements in network quality they do not value.”

In a statement, Vodafone and Three said they disagreed with the CMA’s findings, adding the tie-up would ‘fix the country’s dysfunctional mobile market.”

Vodafone CEO Margherita Della Valle cited a recent EU report into competitiveness, which recommended that remedies to mergers should focus on investment commitment “which matches exactly what the focus of this merger is.”

She told UKTN: “It’s really important to act now in Europe and in the UK to avoid further falling behind other European countries, because upgrading networks is no quick fix.

“It takes years to move up in the rankings and the world is moving on, particularly with technologies like AI. Everyone is acutely aware of the need to have good networks with good speeds and low latencies to benefit from technology advancements.”