KKR, a leading global investment firm, has entered into an agreement with international operator Telefónica to establish Chile’s first open access wholesale fibre optics company.
Under the agreement, KKR will acquire a majority stake in Telefónica Chile’s existing fibre optic network, the largest fibre optic network in Chile, and make that network open access through a newly established independent Chilean company with assets managed locally. Telefónica will hold a 40 percent stake in the business.
The newly formed enterprise will serve as Chile’s first wholesale digital infrastructure network, open to all current and future telecom operators in Chile, creating a competitive marketplace which will, according to KKR, benefit consumers and businesses across the country.
Upon approval, the new business plans to expand broadband coverage in Chile from two million households today to a minimum of 3.5 million households by 2023, and to provide wholesale service to more than 40,000 businesses, telecom towers and small cells. More than two-thirds of households covered by the network will be outside high-income urban areas.
The transaction is valued at approximately $1 billion and is expected to close in the first half of 2021, subject to regulatory approvals.
The fibre optic network is built to the highest technical standards, says KKR, with its existing infrastructure having supported reliable service over the past year of Covid-induced disruptions.
The new company will be controlled by KKR and will leverage the firm’s global experience in digital infrastructure and in operating and deploying fibre networks.