KKR has agreed a deal with Telefónica and Entel to create Perú’s first nationwide open-access wholesale fibre-optics company.

KKR will acquire a majority 54% interest in the existing fibre-optic networks of PangeaCo, Telefónica del Perú and Entel Perú, which will be combined to create ON*NET Fibra de Perú, the largest fibre-optic network in Perú serving more than 2m homes.

The global investment firm added that Telefónica Hispanoamérica will retain a 36% stake, with Entel Perú retaining a 10% holding.

The transaction will combine the existing fibre-optic networks of PangeaCo, Telefónica del Perú, and Entel Perú into an independent company controlled by KKR. The newly formed network will offer open access for all internet service providers for the first time, increasing competition among providers and allowing existing customers to benefit from the scale of the larger network.

KKR plans to invest a further $200m (€183.6m) in ON*NET Fibra de Perú to expand the network to more than 5m homes across 86 provinces by the end of 2026.

Waldemar Szlezak, partner, infrastructure, at KKR said: ”With this investment, we are further committing to our goal of bridging the digital divide across Latin America by helping more families and businesses in Perú achieve their potential by enabling access to high-speed internet. We are pleased to work with Telefónica and Entel to expand access to ultra-fast digital infrastructure across the country through the development of an open-access wholesale network that increases competition and benefits customers.”

A spokesperson for KKR added: “As the controlling shareholder, our intention is to more than double the households reached by ON*NET Fibra de Perú’s fibre-optic network, including reaching municipal areas outside of Lima as well as middle and low-income households.

“This transaction demonstrates continued investor confidence in Peruvian infrastructure and the commitment of the companies to contribute to the sustainable development of digital connectivity in the country.”

ON*NET Fibra de Chile has expanded access from 2.4 million homes to 3.7 million homes since KKR signed the acquisition in February 2021 and ON*NET Fibra de Colombia has increased homes passed from 1.2 million to 2.4 million since signing in July 2021, the investor said.

KKR is making the investment through its KKR Global Infrastructure Investors III fund and plans to provide operational support to ON*NET Fibra de Perú through NEXO LatAm, a digital infrastructure business supporting KKR’s Infrastructure strategy across Latin America.

The transaction is subject to regulatory approvals, including the approval of the Peruvian antitrust agency.

To read the latest edition of the latest IPE Real Assets magazine click here.