The largest fiber broadband company in Latin America in accesses, Spain’s Telefónica continues to grow its network in South America through its fiber JVs with KKR: On Net Fibra Chile and On Net Fibra Colombia.
Recently, the duo also created On Net Fibra Perú.
In Colombia, On Net Fibra just surpassed 3.2mn homes passed with fiber, less than two years after going live in the country, according to reports.
The JV kicked off the business in January 2022 with 1.2mn premises passed, a footprint it “inherited” from its partner and main anchor tenant. On Net Fibra is 60% owned by KKR and 40% by Telefónica. KKR paid US$329mn for its stake.
In an interview with BNamericas soon after the JV launch, On Net CEO Ximena Mora Méndez said the goal was to reach close to 4.3mn homes passed – and covering 90 localities – by the end of 2024.
It currently covers nearly 60 localities.
To achieve that goal, a further 1.1mn homes passed and 30 localities need to be covered by the end of next year.
“Our goal is to grow at the rate of more or less 1.1mn homes passed per year,” Mora Méndez said at the time.
The investment announced when On Net Fibra Colombia launched was 850bn pesos (about US$250mn) in two years.
Colombia ended Q2 with 8.95mn fixed internet subscriptions, up 230,000 compared to end-June 2022, according to regulator stats. Fiber comprised 3mn of those.
As of June, Claro led the market with 3.34mn fixed broadband accesses, followed by Une EPM (1.76mn). Telefónica’s Movistar had 1.41mn clients.
That means that through On Net Fibra, Telefónica has the potential to convert some 1.8mn of homes already passed with fiber into FTTH clients.
In a financial report related to Colombia, Telefónica said that at the end of September this year, it carried out the “conciliation” with On Net Fibra “to validate compliance with conditions agreed for the first year [of operations],” adding that most of the goals set for the JV’s master plan had been met.
On September 27, Telefónica capitalized the operation with a further US$10.6mn, maintaining its 40% stake in the company, it said in the report.
In the first nine months of 2023, On Net Fibra Colombia reported consolidated revenues of 374bn pesos.
CHILE
The Telefónica-KKR JV in Chile was launched in February 2021 with 2.4mn homes passed and the goal of reaching a minimum of 3.5mn by the end of 2023, while providing wholesale services to more than 40,000 businesses.
According to the latest update, the Chilean On Net Fibra operation already exceeded its self-imposed target, with some 4mn homes passed as of September.
Some 60% of the capital for the business was provided by KKR in a transaction that valued On Net Fibra Chile at US$1bn.
In October, Entel decided to sell its fiber optic network to the JV, which in retrospect now seems to be a forerunner of the partnership announced for the JV in Peru, where Entel also operates.
The agreement with Entel is still pending regulatory approval. The deal is expected to incorporate 1.2mn FTTH connections from Entel and involves a wholesale agreement between both companies.
Source: Bnamericas
