Chile's National Economic Prosecutor's Office (Fiscalia Nacional Economica, FNE) has decided to extend the period of its analysis of OnNet Fibra's proposed acquisition of the fiber infrastructure assets of Entel, the wholesale fiber infrastructure provider spun off from Movistar, now a telecommunications company and KKR. The agency began investigating the potential impact of the transaction on competition in the wholesale fiber access service and retail fixed broadband service markets on January 31, 2023, and found that the acquisition "could significantly reduce competition. As a result, FNE has extended its investigation to a maximum of 90 days to allow time to gather additional information, assess possible risks and analyze the ultimate efficiencies and other possible trade-offs that could result from the concentration in the marketplace that would allow FNE to confirm or eliminate the risks it detects.
FNE noted that the risks stemmed from an increase in OnNet's market share, which could allow it to raise prices or reduce the quality of its services. The agency said it also identified the potential for Movistar's competitors in the retail space to increase costs by raising prices or preventing access to critical inputs for service delivery.
As CommsUpdate previously reported, Entel agreed to sell its fiber infrastructure unit to OnNet Fibra for about $358 million. The combined fiber assets of the two companies will provide coverage to about 3.9 million homes, rising to 4.3 million by the end of 2024.
