- Telefónica has struck a fibre transaction in Chile that alters its local footprint and balance sheet
- The deal may reduce competition concerns around a potential takeover of Movistar Chile
What happened: Fibre first, control later
In January 2026, Telefónica agreed a fibre infrastructure deal in Chile that will see part of its fixed network transferred into a standalone vehicle, according to reporting by Telecoms.com. The transaction centres on Telefónica Chile’s fibre-to-the-home assets, which have been bundled into a separate company and sold to a financial partner, while the operator retains a minority stake and wholesale access to the network.
The move follows a familiar pattern for Telefónica. Over the past few years, the group has used fibre carve-outs in markets such as Brazil, Spain and Germany to cut debt, attract long-term investors and sharpen its strategic focus. In Chile, the timing is particularly sensitive. Telefónica has been exploring options to exit or consolidate the market after years of intense price competition and declining margins.
According to the original report, the fibre deal may help smooth the path for a possible takeover of Telefónica Chile by a local rival, most notably América Móvil’s Claro. By separating the passive network assets from the retail business, Telefónica reduces the risk that any future acquisition would trigger heavy remedies from Chile’s competition authority.
Telefónica, founded in Spain and one of Europe’s largest telecoms groups, has struggled to generate returns in Chile. Movistar Chile, its local unit, faces strong competition from Entel, WOM and Claro, while capital expenditure demands have remained high due to rapid fibre roll-out and 5G deployment.
Also Read: Telefónica Tech unveils self-sovereign identity tool to anticipate EU Digital ID rules
Also Read: Telefónica chief warns Europe on cyber autonomy at Davos
Why it’s important
The Chile fibre deal illustrates how infrastructure separation has become a financial and regulatory tool, not just an operational one. From a competition perspective, a buyer acquiring Movistar’s retail operations without owning the underlying fibre network looks less threatening to market structure.
There is also a balance-sheet angle. Telefónica continues to prioritise debt reduction, and fibre monetisation offers upfront cash without a full market exit. For investors, this incremental de-risking can make an eventual sale more palatable, even if valuations remain modest.
Regionally, the move fits a broader Latin American trend where operators retreat from smaller or lower-growth markets while financial investors deepen their role in digital infrastructure. According to Chile’s telecoms regulator Subtel, fibre connections have overtaken copper nationwide, making passive networks increasingly attractive to pension funds and infrastructure specialists.
If a takeover does follow, this deal may be remembered as the quiet structural step that made it politically and economically possible.
