Chile’s Entel to acquire Nextel Peru
08 April 2013 | Kavit Majithia
Chilean operator Entel has agreed to acquire NII Holdings subsidiary Nextel Peru after widespread speculation regarding a possible deal.
The deal, worth $400 million, gives Entel access to the Peruvian market, which has considerable lower penetration compared to its home market of Chile.
Entel has been vocal about its lack of growth opportunities in its home market, and the acquisition looks set to be completed at the end of the year.
“Purchasing Nextel Peru is an important step for Entel, it’s a long term investment to position itself as a regional operator in the highly attractive market of Peru,” said Antonio Büchi, CEO at Entel.
Nextel Peru has however suffered in recent years, and serves as the company’s third largest operator.
Entel will be charged with recovering profitable margins in the country for the company. It also operates in the Peruvian enterprise segment through its Americatel subsidiary, which has seen revenue grow by 5% in 2012, and Entel is reportedly planning to also increase its presence in the consumer market.
Chilean bank Banchile Inversiones estimates the company will make approximately $380 million in 2014 from its total operations in the Peruvian market.
Nextel has been in the headlines recently due to its poor position in its domestic and home markets, and further asset sales could be planned in Peru, Chile and Argentina.
Local reports suggest Entel has not finished its investment spree, and is planning to participate in Colombia’s upcoming 4G auction in June.