The wholesale division of BT Group is to provide and manage links between Vodafone's UK base stations and its core national network for the next five years.
The two groups said BT's Ethernet service from its 21st Century Network infrastructure would be used, enabling Vodafone to manage the predicted growth in traffic and bandwidth requirements arising from web browsing and video streaming.
It will also enable Vodafone to benefit from BT Wholesale's reach while avoiding capital investment risk.
In his first interview with the BBC, Vodafone's CEO Arun Sarin today said that despite global financial worries, he was upbeat about the coming year. In addition to the BT contract, Vodafone recently sacked 450 people at its global HQ in Newbury, England.