Telefonica sells stake in fibre network business in Peru to KKR

Telefonica has sold a 54 percent stake in its fibre optic network in Peru to U.S. private equity fund KKR and 10 percent to Entel’s local business.
Telefonica’s 5G network in SpainThe Spanish telecoms group will retain the remaining 36 percent stake in the new fibre optic network business called ON*NET Fibra de Peru.

Over the past few years, Telefonica has carried out a series of asset sales to reduce debt and to help fund the hefty investment required to build 5G mobile networks.

In many markets, Telefonica has separated the infrastructure into different units to maximise the value of its disposed assets.

The Spanish company did not disclose the value of the transaction. Telefonica said the deal would cut its debt by 200 million euros ($217.8 million).

The transaction valued 100 percent of the unit at about 550 million euros, including debt, according to a banking source close to the deal.

The new company, Pangeaco, will combine the existing fibre optic network in Peru from Telefonica and Entel, KKR said in a separate statement.

The private equity fund added that it planned to invest $200 million to accelerate the expansion of the digital infrastructure to more than double the size of the network to reach at least 5.2 million homes from more than 2 million homes passed today across Peru by the end of 2026.

Telefonica Peru and Entel Peru will be anchor tenants on the expanded open access network, enabling both providers to reach a greater number of customers with ultra-high-speed offerings.

In Peru, approximately 88 percent of households have mobile or fixed internet service, but less than 35 percent have access to high-speed fiber optic networks.

KKR said ON*NET Fibra Chile has expanded access from 2.4 million homes passed to 3.7 million homes passed since KKR signed the acquisition in February 2021.

ON*NET Fibra de Colombia has increased homes passed from 1.2 million to 2.4 million since signing in July 2021. Both companies have attracted multiple internet service providers to utilize their open access networks.

KKR Global Infrastructure Investors III fund plans to provide support to ON*NET Fibra Peru through NEXO LatAm, a digital infrastructure business supporting KKR’s Infrastructure strategy across Latin America.