KKR Invests in Peru, Pledging to Double Broadband Connections

American equity fund KKR acquired a majority stake in Telefonica’s optical fiber business in Peru, pledging to provide over  70% of Peruvian households with access to high-speed internet by the end of 2026.

“Today, barely 35% of households in Peru have access to a high speed broadband network. We are investing an additional US$200 million to more than double the size of the network,” stated the equity fund in a press release.

KKR also changed the name of Telefonica’s Peruvian subsidiary from PangeaCo to On Net Fibra de Perú. The unit will serve as an open-access telecom capacity vendor, meaning that internet service providers across Peru can access its network to sign up more customers for their service.

The Peruvian government is optimistic that KKR’s investment will increase network coverage and lower broadband rates nationwide.

In 2021, KKR similarly acquired the majority ownership in Telefonica’s ventures in Chile and Colombia. Consequently, in only a few months, the number of households with access to its network more than doubled in both countries.

Peru is now one of the costliest countries for broadband services primarily due to a lack of competition among telcos.

Private carriers have often avoided expanding their networks beyond large cities like Lima for years out of concern that they would rack up significant debt. It is because of the rising debt that Telefonica is giving up a controlling interest in the majority of its businesses in the region.