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    TEF   ES0178430E18

TELEFÓNICA, S.A.

(TEF)
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Telefónica S A : KKR AND TELEFONICA TO CREATE COLOMBIA'S FIRST NATIONWIDE OPEN ACCESS FIBER OPTIC NETWORK

07/19/2021 | 10:29am EDT

BOGOTA - KKR, a leading global investment firm, today announced an agreement with Telefonica Colombia, a subsidiary of the leading Spanish telecom group Telefonica, to establish Colombia's first independent nationwide open access wholesale digital infrastructure company.

On a mission to bring greater broadband access across Colombia, the new company will expand availability of ultra-fast fiber optic internet, benefitting more consumers and businesses across Colombia. As part of the agreement, KKR will acquire a majority stake in Telefonica's existing fiber optic network, the largest in Colombia, and make the network open access through a newly established independent entity, which KKR will control as the majority shareholder. Telefonica will be a minority shareholder in the new company, with a 40% stake.

The company will be run independently by a local team in Colombia but brings together the expertise of both KKR and Telefonica to build and operate Colombia's premier digital infrastructure network. Recently, the companies similarly joined efforts to establish ON NET Fibra as Chile's first open access wholesale fiber optic network.

Upon closing of the transaction, Telefonica's existing fiber optic network will become open access and available for all internet service providers in Colombia to utilize, including Telefonica. With the investment from KKR, the new company plans to expand existing fiber optic coverage from approximately 1.2 million homes today to, at minimum, 4.3 million homes by the end of 2024, covering at least 87 municipal areas in Colombia, with more than half consisting of underserved areas outside of high-income urban areas.

The network will utilize state-of-the art technology to deliver connection speeds up to 1000 times faster than conventional networks currently available to most Colombians, improving both quality and coverage. The investment will help to close the digital gap, facilitate new 5G connectivity, and provide access to telework, telehealth, and virtual education to far more Colombians than have it today.

'We are thrilled to, once again, be working with Telefonica to provide greater broadband access to those who need it, and to be doing so in Colombia, a country we believe is primed for significant growth ahead and which serves as an attractive destination for investors,' said Waldemar Szlezak, senior leader of KKR's infrastructure investment team. 'This new venture in Colombia, along with ON NET Fibra de Chile, demonstrates the potential to invest in innovative financing and growth strategies to promote digital infrastructure in Latin America.'

Maria Fernanda Suarez Londono, a senior advisor to KKR, added, 'More Colombian families and small businesses should have the ability to access ultra-high speed digital services. KKR's investment will help bridge that gap by promoting competition and committing to expand the network in municipalities across Colombia. It also indicates the potential for KKR's continued growth in digital infrastructure in Colombia and in the region.'

Alfonso Gomez Palacio, CEO of Telefonica Spanish-speaking Latin America, explained that 'the agreement with KKR will accelerate the deployment of fiber optic in Colombia at an unprecedented rate, in a market that has shown enormous potential in the last year. In addition, fiber will create opportunities for thousands of homes and businesses that see digitalization as an opportunity for development. This is one more step by our company to lead FTTH services in Latin America.'

The transaction is valued at approximately $500 million and is subject to customary regulatory approvals.

The new company will be controlled by KKR and will leverage the firm's global experience in digital infrastructure and in operating and deploying fiber networks, including its existing fiber optic investments in ON NET Fibra in Chile, FiberCop in Italy, HyperOptic in the UK, and Open Dutch Fiber in the Netherlands.

KKR is making the investment through its global infrastructure fund. KKR first established its global infrastructure team and strategy in 2008 and has since been one of the most active infrastructure investors around the world with a team of more than 50 dedicated investment professionals. The firm currently oversees approximately $28 billion in infrastructure assets and has made over 45 infrastructure investments across a range of sub-sectors and geographies.

About KKR

KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life, and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries.

About Telefonica Colombia

Telefonica is one of the biggest drivers of the digital economy in the country, with revenues of 5.36 trillion pesos in 2020. The activity of the company, which operates under the trademark Movistar, is mainly focused on the businesses of mobile communications and connectivity, broadband services, fiber optics to the home, paid television, fixed line communications and a complete range of digital solutions for small, medium, and large companies and corporations.

Telefonica is present in 50 cities and municipalities in the country with fiber optics, 210 with fixed broadband and 965 with 4G LTE mobile connectivity. Telefonica closed 1Q21 with a customer base of 19.9 million nationwide: 16.7 million mobile lines, 1.2 million broadband customers -366,000 with fiber-, 527 thousand pay TV and 1.4 million fixed lines in service.

Contact:

Mariajose Diaz

Tel: +57 316 758 5298

Email: mariajosediaz@dattis.com

(C) 2021 Electronic News Publishing, source ENP Newswire

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Financials
Sales 2021 39 316 M 46 071 M 46 071 M
Net income 2021 9 852 M 11 545 M 11 545 M
Net Debt 2021 34 303 M 40 197 M 40 197 M
P/E ratio 2021 2,44x
Yield 2021 7,32%
Capitalization 22 950 M 26 874 M 26 893 M
EV / Sales 2021 1,46x
EV / Sales 2022 1,46x
Nbr of Employees 111 490
Free-Float 89,3%
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Number of Analysts 30
Last Close Price 4,10 €
Average target price 4,68 €
Spread / Average Target 14,1%
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Managers and Directors
José María Álvarez-Pallete López Executive Chairman & Chief Executive Officer
Laura Abasolo García de Baquedano Chief Financial & Control Officer
Alejandro Ramos Chief Information Security Officer
Ángel Vilá Vilá Boix Chief Operating Officer & Director
Peter Erskine Independent Non-Executive Director
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