Telefónica sells 60% of fibre subsidiary in Colombia to KKR

Telefónica sells 60% of fiber subsidiary in Colombia to KKR

Telefonica Colombia, the largest telecommunications company in Colombia, has closed the sale of its fibre to the home (FTTH) assets in the country to American venture capital giant KKR for a total of around EUR 175 million after receiving the corresponding regulatory clearance.

 

In a statement to Spain's financial markets regulator Commission National Securities Market (CNMV), Telefonica confirmed that it will receive 40 percent of the shares of a new wholesale venture called InfraCo controlled by KKR and open to all operators.

The operation is carried out within the group's "active portfolio management policy", which is based on divestment in non-strategic assets to reduce leverage, said a statement.

According to local newspaper reports, the implicit valuation of this company derived from the transaction is estimated at 500 million dollars (approximately 400 million euros at the current exchange rate), which represents a multiple of the proforma gross operating profit (Oibda) of approximately 20 times.

Telefónica already announced that this new company will be in charge of starting up “the most ambitious project for the deployment of a neutral fiber optic network “in Colombia, from which all market operators can benefit.

The objective of this company will be to bring the advantages of fiber optics 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 relevant markets. For this purpose, Telefónica will contribute its current fibre optic infrastructure, which has already reached 50 cities and municipalities and which, at the end of the first quarter of 2021.

Colombia had 8.22mn fixed internet accesses in June 2021, 5 million of which through cable modem, 1.6 million via fiber optics, and 1.2 million through xDSL, according to the latest statistics from the ICT ministry. Telefónica Movistar is the third biggest operator in the fixed internet market, with 1.17 million connections, after Claro and UNE EPM.

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