LONDON (Reuters) - Vodafone Group Plc (L:VOD) is scaling back the fibre network it is building in Spain with France's Orange (PA:ORAN), after the completion of its deal to buy cable company Ono.
Vodafone and Orange agreed to work together in March 2013 to reach an initial 3 million properties next year, and eventually some 6 million by 2017, for a total investment of 1 billion euros (790 million pounds).
The British company said on Wednesday it would continue to build a network with Orange to serve 2 million homes, and it would offer the Ono network on a wholesale basis to Orange for a further 1 million properties.
Shares in broadband telecoms provider Jazztel (MC:JAZ) slipped on the news as it is often seen as a possible takeover candidate for the French company.
Vodafone said the joint deployment had already reached 800,000 premises across 12 Spanish cities, and the network would be extended to reach a further 1.2 million premises in areas where the Ono high-speed network was not present.
One year after signing the agreement with Orange, Vodafone agreed to buy Ono, Spain's largest cable operator, for 7.2 billion euros, in a deal that will enable it to better compete with Spanish telecoms market leader Telefonica (MC:TEF).
The deal, which received European Commission approval earlier this month, closed on Wednesday.
(Reporting by Paul Sandle; editing by Kate Holton)