Telecommunications company Telefonica, whose operations in Latin America are branded as ‘Movistar’, has officially announced this last Friday, July 16th, a new partnership agreement with the Kohlberg Kravis Roberts (KKR) investment fund to create a new company, which will be in charge to deploying FTTH in Colombia. According to the officially reported information, the aim of the new business will be to bring FTTH to about 90 cities in the country in the next three years, and reach 4.3 million HPs with this technology.
The agreement establishes KKR as the owner of 60% of the new company, while the remaining 40% will belong to Movistar Colombia. In turn, the Colombian company confirmed that it will provide the new company with its current FTTH infrastructure -which, as reported, already reaches 50 cities and municipalities in the country, and will reach 1.2 million HPs by the end of Q2 2021 -. As a result of the transaction, valued at USD 500 million, Movistar Colombia will get USD 200 million, and will be able to access a consideration of up to an additional USD 100 million.
According to the company, the 4.3 million HPs that are expected to be covered with FTTH will contribute to the Colombian Government’s purpose of reaching 70% of connected homes and improving the speed of connectivity in the country. In turn, Movistar Colombia already has more than 380 thousand customers on its fiber offer, with symmetric speeds of up to 500 MB.
‘The agreement with KKR will speed up the fiber optic deployment in Colombia at an unprecedented rate, in a market that has shown great potential in the last year. Added to this are the opportunities that fiber will bring for thousands of homes and companies that see digitization as an opportunity for development. It is one more step for our company to lead FTTH connections in Latin America’, reported Alfonso Gomez Palacio, CEO at Telefonica Hispanoamerica.
The partnership between Movistar Colombia and KKR adds to the start of operations of ON * NET Fibra in Chile. It is a new wholesaler that will offer an open and neutral FTTH service and will promote access to broadband services. The company comes up as a result of the acquisition by the KKR investment fund of 60% of InfraCO, a subsidiary of Telefonica Chile, in order to implement the first free access FTTH network in the country.