Telefónica and Huawei are setting up working groups to explore the possibility of technology including 4G/5G networks, the connected home and virtualisation.
The two companies signed a collaboration agreement which it was aimed at exploring innovation that would lead to the "transformation of the digital environment".
The agreement has three strands, with the first focusing on the transformation of the Spanish operator's new generation networks. Both companies will analyse the development and roll-out of 4G/5G networks, 400G, FTTX, SDN IP/optical networks and the connected home.
The second will look at developing IT solutions to improve Telefónica's internal processes and improve customer experience. The companies said they will also collaborate on finding out new ways to efficiently use both fixed and mobile networks.
The third builds upon Telefónica's Unica virtualisation strategy, with both companies exploring how to virtualise certain network functions. They will also produce new services based on an open digital platform that will be targeted at its business and consumer customers.
The working groups will see both companies share information about trends, case studies from their own business and new technology they are working on. Huawei said: "[This project has] the aim of reinforcing Telefónica's competitiveness and productivity in its process of transformation into a digital telco."
In June, both companies held a proof of concept of NFV solutions and deployments. The trial centralised the management of data centres by using a single virtual data centre.
Earlier this year, the companies completed a joint test of SDN-based IP and optical synergy.