Previous this month, world telecom workforce Telefonica entered into its fourth Latin American fiber-to-the-home (FTTH) three way partnership (JV).
The deal was once sealed in Peru after Telefonica agreed to phrases with funding company KKR and Peruvian telco Entel.
This new fiber-based JV follows previous agreements in Brazil, Chile, and Colombia. Let’s take a better have a look at Telefonica’s technique and read about the scope of the networks in query.
A Strategic Shift
In April 2022, Telefonica printed a weblog put up titled “Alliances to Attach Latin The us: The Long run Lies in Cooperation”—surroundings out its imaginative and prescient to extend fiber protection in Latin The us and take on the virtual divide.
As the gang defined, “Telefonica’s dedication to the take-off of digitalization in Latin The us is progressing often below a brand new type of strategic alliances. This spirit of cooperation is very important to stand the demanding situations of the virtual divide and the deployment of recent networks.”
At that juncture, Telefonica had already closed 3 JVs in South The us, and the method introduced a blueprint for additional tie-ups in Europe and Latin The us.
Brazil
Identify of Fiber JV: FiBrasil
URL: fibrasil.com.br
Deal Agreed: March 2021
Deal Concluded: July 2021
Shareholder Construction
Telefonica Brasil (Vivo, 25%),
Telefonica Infra (25%),
CDPQ (50%)
The Deal
In March 2021, Telefonica Team and Canadian funding company Caisse de depot et placement du Quebec (CDPQ) showed their settlement for the development, construction, and operation of a impartial, unbiased FTTH wholesale community in Brazil with the advent of FiBrasil Infraestrutura e Fibra Otica (FiBrasil).
CDPQ agreed to speculate as much as BRL1.8 billion ($317.8 million) within the three way partnership, comprising each number one and secondary bills.
The deal closed in July 2021. Telefonica and CDPQ each and every cling 50% of FiBrasil below a “co-control governance type.”
Telefonica’s 50% participation is held via Telefonica Brasil (Vivo) and Telefonica Infra—the gang’s infrastructure arm—with each and every trade maintaining a 25% stake.
The Community
Beginning with a portfolio of one.6 million houses handed—by way of infrastructure contributed by way of Vivo—FiBrasil objectives to extend its community to succeed in round 5.5 million houses handed inside of 4 years. (Observe: the networks contributed by way of Vivo represented a small element of Telefonica’s general fiber belongings in Brazil.)
Working as a impartial wholesale corporate, FiBrasil is about to deploy and function fiber-optic networks in decided on mid-sized towns throughout Brazil outdoor the state of São Paulo.
FiBrasil may be poised to provide FTTH wholesale get admission to to all telecom suppliers, enabling them to provide those services and products to their finish customers. It began operations with Vivo as its primary anchor-client and has since signed business agreements with the likes of Sky Brasil and Vero Web.
In August 2021, FiBrasil boosted its community footprint when it introduced—and closed—a takeover for Fiberty 1.
In August 2021, FiBrasil boosted its community footprint when it introduced—and closed—a takeover for Fiberty 1, the Blackstone-backed corporate in the past referred to as Phoenix Fiber do Brasil.
Fiberty 1 presided over a 1,500-kilometer fiber community which handed round 170,000 houses. The deal was once valued at EUR398 million ($470 million).
Via the tip of 2022, FiBrasil boasted protection of three.3 million houses handed in additional than 150 towns.
Chile
Identify of Fiber JV: ON*NET Fibra Chile
Deal Agreed: February 2021
Deal Concluded: July 2021
Shareholder Construction
KKR (60%),
Telefonica Chile (40%)
The Deal
In February 2021, international funding company KKR entered into an settlement with Telefonica to ascertain Chile’s first open get admission to wholesale fiber-optic supplier.
As in line with the settlement, KKR would gain a 60% stake in Telefonica Chile’s current fiber community—apparently the most important within the nation—and make that community open get admission to via a newly established unbiased Chilean corporate with belongings controlled in the community. Telefonica would cling the rest 40% stake within the trade.
The deal gained regulatory approval in June 2021 and closed the next month.
The Community
The newly-formed InfraCo began operations with 2.4 million fiber passings, with an extra 400,000 deployed for the reason that tie-up was once unveiled previous that yr.
Lately, the Chilean iteration of ON*NET presides over 23,000 kilometers of fiber—connecting 180 municipalities in 15 areas—passing greater than 3 million houses.
In October 2022, Chilean telecom workforce Entel agreed to promote its fiber infrastructure department to ON*NET Fibra, in a deal price $358 million. The belongings slated for inclusion come with a community that passes 1.2 million houses. The deal stays below regulatory evaluate.
Colombia
Identify of Fiber JV: ON*NET Fibra
URL: onnetfibra.co
Deal Agreed: July 2021
Deal Concluded: January 2022
Shareholder Construction
KKR (60%),
Telefonica Colombia (40%)
The Deal
A question of weeks after the 2 events closed their Chilean settlement, Telefonica and KKR introduced a brand new tie-up in Colombia.
As in Chile, the brand new corporate could be 60% owned by way of KKR and 40% by way of Telefonica Colombia. Telefonica agreed to give a contribution its current FTTH infrastructure, which already handed 1.2 million houses.
The full transaction valued the brand new corporate at $500 million. Telefonica gained a cost of $200 million, together with the potential for an extra, performance-based attention of as much as $100 million. The transaction closed in January 2022.
The Community
With greater than 2.7 million houses handed with fiber, ON*NET Fibra’s Colombian unit now has a presence in 47 towns. The operator’s purpose is to succeed in 4.3 million houses handed in 90 towns by way of 2024.
Peru
Identify of Fiber JV: ON*NET Fibra de Peru
URL: TBC
Deal Agreed: July 2023
Deal Concluded: TBC
Shareholder Construction
KKR (54%),
Telefonica Hispanoamerica (36%),
Entel Peru (10%)
The Deal
In July 2023, KKR signed agreements to procure fiber belongings from each Telefonica Hispanoamerica and Entel, in hopes of setting up Peru’s first national open get admission to wholesale fiber corporate.
The proposal seeks to mix the present fiber networks of PangeaCo (a unit established by way of Telefonica in 2020 to boost up fiber development), Telefonica del Peru (TdP), and Entel Peru into an unbiased corporate managed by way of KKR.
The brand new entity, ON*NET Fibra de Peru, shall be 54%-owned by way of KKR, whilst Telefonica Hispanoamerica and Entel will cling stakes of 36% and 10%, respectively.
Whilst TdP and Entel shall be anchor tenants at the community, the ON*NET infrastructure shall be open to make use of by way of all ISPs.
The price of the transaction has now not been disclosed, and the settlement is matter to regulatory approval.
The Community
PangeaCo was once created in March 2020, and formally introduced in November that yr.
In step with TdP’s Q1 2023 profits file, as of March 31, 2023, its FTTH networks handed a complete of two.232 million houses. Of this determine, 1.417 million houses are handed by way of TdP’s infrastructure, whilst the rest 815,000 houses are handed by way of Pangea networks. For its section, Entel’s fiber community passes round 1.2 million houses.
Publish-transaction, KKR plans to speculate an additional $200 million to extend the brand new corporate’s fiber footprint to succeed in 5.2 million houses throughout 86 provinces by way of the tip of 2026.
Long run Offers?
Out of doors of Latin The us, Telefonica has entered into a variety of fiber-optic JVs, specifically: Bluevia in Spain, along Vauban Infrastructure Companions and Credit score Agricole Assurances; Unsere Grüne Glasfaser in Germany, with Allianz Capital Companions; and UK-based nexfibre, in affiliation with InfraVia Capital Companions.
In Latin The us, the gang’s choices are extra restricted.
In Latin The us, then again, the gang’s choices are extra restricted, and Telefonica Argentina (Movistar) is the one working unit with a considerable fiber footprint which may be leveraged within the near-future.
In February this yr, the Argentinian telco published that its FTTH community had handed the 1,000,000 subscriptions milestone. At that date, the telco’s FTTH networks handed 3.8 million houses—a determine which is anticipated to succeed in 4 million by way of end-2023.
Movistar introduced business FTTH services and products in Argentina in early 2016, to begin with masking decided on portions of Buenos Aires.
