Orange and Vodafone are bringing fibre networks to nearly 800,000 homes in 12 cities across Spain, including Madrid, Barcelona and Seville.
The joint initiative by the mobile operators should start working commercially by the end of the year.
The two companies say fibre networks should be available in 50 cities and over six million homes by 2017.
Investment is expected to rise from an initial €200 million for the first phase to €1,000 million in the next four years.
Vodafone and Orange have assigned projects to different companies in each city.
The deployment is based on a network sharing agreement signed by Orange and Vodafone with Telefónica in July. This sees Orange and Vodafone connect their horizontal network to vertical installations owned by Telefónica inside buildings. Where there is no Telefónica coverage, Vodafone and Orange are developing their own vertical infrastructure, which they can then share with Telefónica.
The fibre networks will be installed in the cities of Madrid, Barcelona, Seville, Malaga, Valencia, Alicante, Zaragoza, Cordoba, Valladolid, Alcorcon, Badalona and Hospitalet de Llobregat.