Together, the companies will invest up to €1 billion in a fibre-optic network which is expected to provide high-speed internet to over six million homes.
The decision follows recent concerns that the country is lacking in broadband speeds and services.
"The fibre-optic market in Spain is very deficient in terms of competition and could end up a monopolised market if this is not corrected," said Jean-Marc Vignolles, chief executive at Orange Spain.
Under the terms of the agreement, Vodafone and Orange will deploy street-level fibre in complimentary geographies and although the fibre will be owned independently, it will share the same technical specifications to ensure it is compatible as a single network.
Additionally, the companies will each deploy their own in-building fibre to guarantee access to one another, and will request access to any third-party vertical infrastructure together.
“This agreement demonstrates Vodafone’s commitment to provide high-speed unified communications services to our customers, coupled with our willingness to invest when there are positive returns,” said Paolo Bertoluzzo, chief executive for the southern Europe region at Vodafone.
Services are expected to be running on the infrastructure by January 2014 with over 800,000 premises connected by March 2014.
When complete, Vodafone and Orange hope the fibre-optic network to cover 50 major Spanish cities.
The roll-out looks to strengthen Vodafone’s position in the Spanish market following the decline in revenue, and consequent job cuts, it reported in February this year.
