KKR, Telefonica Colombia create wholesale newco

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Investment firm KKR has entered into an agreement with Telefónica to create an open access wholesale company in Colombia. 

Under the agreement, KKR will acquire a majority (60 per cent) stake in Telefónica Colombia’s existing fibre optic network, which reaches 50 cities and municipalities in the region, and make that network open access through the newly established independent company.

The new company will be in charge of launching an ambitious project for the deployment of a neutral FTTH network in Colombia, from which all market operators can benefit. The objective will be to bring the advantages of fibre to about 90 cities in the country in the next three years, with a network that will cover 4.3 million past real estate units (UIPs), including all the relevant markets.

Currently, Telefónica in Colombia has more than 380,000 customers for its fibre service with symmetric speeds of up to 500Mb/s. The 4.3 million UIPs will contribute to the Colombian government's goal of reaching 70 per cent of connected homes and to improving the speed of connectivity in the country. 

For Laura Abasolo, general director of finance, control and corporate development of Telefónica SA and head of Telefónica Hispanoamérica said: ‘This announcement is one more step on the path that the company has set out in the region to guarantee profitable growth, crystallising the value of its infrastructure and implementing innovative and agile business models that improve profitability on invested capital.’

Alfonso Gómez Palacio, CEO of Telefónica Hispanoamérica explained: ‘The agreement with KKR will accelerate the deployment of fibre optics in Colombia at an unprecedented rate, in a market that has shown enormous potential in the last year. Added to this are the opportunities that fibre will generate for thousands of homes and companies that see digitisation as an opportunity for development. It is one more step for our company to lead FTTH connections in Latin America.’

This is a similar business model to that used by Telefonica in Chile, with KKR also having entered into a $1bn agreement with the firm to create an open access wholesale company in the region.

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