KKR, Telefónica Hispanoamérica and Entel announced agreements under which KKR will acquire a majority interest in PangeaCo and the existing fiber optic networks of Telefónica del Perú and Entel Perú to build Perú’s first nationwide open-access wholesale fiber optics company with the mission to bring greater access to fiber optics connectivity across the country.

The transaction will combine the existing fiber optic networks of PangeaCo, Telefónica del Perú and Entel Perú into an independent company controlled by KKR. The newly formed network will be open access, allowing usage to all internet service providers for the first time. KKR plans to make approximately US$200 million of additional investment to more than double the ultra-fast fiber network from more than 2 million homes passed today to reach 5.2 million homes passed across 86 provinces by the end of 2026.

Telefonica did not disclose the value of the transaction but said the deal would cut its debt by $217.8 million (200 million euros).  According to a banking source close to the deal, the transaction valued 100% of the unit at about 550 million euros, including debt.

Under the terms of the agreement, KKR will acquire a controlling interest in PangeaCo, which will subsequently acquire the existing fiber optic networks of Telefónica del Perú and Entel Perú. Through the combination of these networks, KKR will establish ON NET Fibra de Perú as the new name for the platform, which will independently build and operate the nation’s largest fiber optic network. KKR will own a 54% interest in ON NET Fibra de Perú alongside Telefónica Hispanoamérica, which will own 36%, and Entel Perú, which will own 10%.

The entire ON NET Fibra de Perú fiber optic network will be open to use by all internet service providers, increasing competition in the wholesale market. Telefónica del Perú and Entel Perú will be anchor tenants on the expanded open-access network, enabling both providers to reach a greater number of customers with ultra-high-speed offerings.

The transaction does not impact the services provided by existing customers of PangeaCo, Telefónica del Perú or Entel Perú. Upon closing of the transaction, customers will benefit from the scale of the larger network.