📋 Tender Overview
The purpose of the decision is to avoid barriers that impede the entry or expansion of current or potential competitors and to guarantee competition. The Indecopi Commission for the Defense of Free Competition approved, with conditions, a business concentration in the wholesale market for fiber optic access networks to the home. This is the transaction in which the investment fund Kohlberg Kravis Roberts (KKR) participates, through its subsidiary Pangea LuxCo S.a.r.l. (Pangea Luxco); Telefonica Hispanoamerica, S.A. (Telefonica) and Entel Peru S.A. (Entel).
In this regard, the Commission authorized the joint venture through which Pangea LuxCo will obtain 54% of the shares of Pangeaco S.A.C. (Pangeaco); Telefonica Hispanoamerica, 36%; and Entel, 10%. In turn, Pangeaco will buy certain fiber optic assets from Entel and, between Pangeaco and Entel, a contract will be signed for the provision of fiber optic access network services.
The Commission applied the conditions after verifying that the aforementioned transaction included contractual provisions between Pangeaco and Entel that could create barriers that prevent the entry or expansion of current or potential competitors in said market. For example, one of the conditions imposed is that the time of the wholesale non-competition clause be reduced from 15 to 3 years; the obligation of exclusive purchase from 15 to 5 years and the clauses of first offer right, right to match and retail non-competition were eliminated.
Additionally, the Commission prohibited the insertion of the aforementioned modified or eliminated clauses in the contracts. Likewise, if Pangeaco signs new contracts with exclusivity conditions with telecommunications operators for the analyzed wholesale service, these must be promptly submitted to the Commission.
Compliance with these conditions will be reported to Indecopi by a compliance officer.
It should be noted that fiber optic access networks to the home are an important input for retail telecommunications operators to provide fixed services to homes. According to Osiptel, as of June 2024, internet operating companies registered 2.5 million fiber optic connections and represent 65.45% of the total fixed internet connections nationwide.
This is the third operation that is approved with conditions in the second phase, according to the prior control regime for business concentration operations in force since June 2021.
The public version of Resolution 187-2024/CLC-INDECOPI will be published on the institutional website within the period provided for in Law 31692 and once the confidentiality requests of the parties have been resolved.
