IBM is linking up with Vodafone’s business unit in a two-stage deal worth £426 million that will create joint cloud and hosting services, in addition to building artificial intelligence (AI), cloud and Internet of Things (IoT) solutions to help companies prepare for 5G connectivity.

As part of the eight year managed-serviced deal, Vodafone has agreed to pay IBM to provide jointly-delivered enterprise solutions to businesses. It will also enable Vodafone Business customers to access IBM’s cloud offerings.

According to a launch statement, the strategic commercial agreement will offer firms "open, flexible technologies they need to integrate multiple clouds and prepare for the next wave of digital transformation enabled by AI, 5G, edge and Software Defined Networking (SDN)".

The joint venture is aimed at enabling companies to adapt to the digital and technological opportunities presented by superfast 5G internet speeds and cloud data storage without having to completely redesign the networks upon which their systems run.

The deal comes as Vodafone looks to shore up its position as one of the UK’s leading B2B providers of mobile network-run services.

Vodafone chief executive Nick Read explained: “This strategic venture with IBM allows us to focus on our strengths in fixed and mobile technologies, whilst leveraging IBM’s expertise in multicloud, AI and services.

“Through this new venture we’ll accelerate our growth and deepen engagement with our customers while driving radical simplification and efficiency in our business,” he added.

IBM chief executive Ginni Rometty said: “Together, IBM and Vodafone will use the power of the hybrid cloud to securely integrate critical business applications, driving business innovation – from agriculture to next-generation retail.”

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