On Net Fibra, the subsidiary created in Chile by Telefónica and US fund KKR on the basis of the network built by Telefónica’s subsidiary, has acquired a fibre-to-the-home (FTTH) network from Entel, Telefónica’s main rival in Chile, for some EUR 365 million, according to Expansión newspaper. The transaction, which is pending approval by competition authorities, is an important reinforcement for On Net Fibra’s business in Chile.
The network sold by Entel provides coverage in the country to 1.2 million households (i.e. homes, premises and offices). At the same time, Entel has committed to a long-term contract to use On Net Fibra’s new network, which with the addition of the infrastructure acquired from Entel will now cover a total of 3.9 million real estate units.
On Net Fibra’s network will also continue to expand its coverage with the objective of reaching a total of 4.3 million real estate units by 2024.
On Net Fibra is the result of an agreement, reached in February 2021, whereby Telefónica created a totally independent subsidiary to which it transferred the entire fibre optic network it had in the Andean country, some two million real estate units. Of this subsidiary, it sold 60% of the capital to the US fund KKR in a transaction in which the fibre subsidiary was valued at 1 billion dollars (representing 18.4 green ebitda, well above the valuations of the telecoms operators) and for which Telefónica therefore received around 600 million, which at the February 2021 exchange rate was equivalent to around 500 million euros.
When the agreement was concluded in February 2021, it was established that by the end of this financial year 2022, coverage of around 3.5 million homes would be achieved. Chile is a country of some 18.5 million inhabitants, with around 6.5 million housing units.
