LatAm to reach over 100mn homes passed with fiber by end-2022

Latin America’s fiber-to-the-home (FTTH) market is set to end 2022 with approximately 105mn homes passed with fiber, which would be an increase of 36%, or 28mn new premises, compared with the end of 2021, according to Eduardo Jedruch, regulations director at the Fiber Broadband Association (FBA) LatAm.

The region is also expected to gain 12mn new FTTH customers this year, reaching around 45mn, which would be growth of 40% over the year.

This represents an activation rate (homes passed with fiber turned into fiber broadband subscriptions) of 41%, compared with roughly 40% in 2021. According to FBA, Latin America now has a fiber penetration rate of nearly 61%.

“Latin America maintains its momentum in FTTH network adoption, driven mostly by the demand of residential customers, but also by new applications that require new levels of connectivity,” Jedruch said at a Tuesday FBA webinar focused on the role of neutral fiber firms in the region’s FTTH expansion.

According to Jedruch, the estimates for the number of homes passed and FTTH are still preliminary and could be updated before the end of the year. FBA is holding its next face-to-face event in Bogotá on November 8-9.

The official added that the fiber expansion is being fueled not only by incumbent carriers, but increasingly by wholesale and neutral fiber optics players, companies that lease their structure for telcos and internet services providers to use.

Speaking at the webinar, Leonardo Guzmán, director of commercial strategy at Ufinet, said that the company's main clients include players such as América Móvil and Telefónica, but that more and more regional carriers and ISPs are relying on the neutral network to reduce costs and avoid overlapping networks.

Ufinet was formed after a spin-off of power group Enel's fiber network and it operates solely in the carrier-of-carriers business.

In July, Tigo Colombia announced it was entering Bogota’s fixed broadband market using fiber optics deployed by Ufinet, as well as by ETB. The agreement for Bogotá is key since it represents an increase of more than 20% in Tigo Colombia's coverage in terms of residential services, in addition to giving it a greater footprint in the country’s biggest city.

Ufinet's network in Bogotá covers some 250,000 homes and businesses and is expected to reach 320,000 by the end of this year. Meanwhile, ETB has about 1.5mn homes passed with fiber optics, which will be added to Tigo's offer.

ETB and Ufinet previously signed an agreement to merge their FTTH networks into a new company offering wholesale services, but Colombia's trade and industry authority SIC blocked the deal.

ON NET CHILE

José Miguel Torres Toral, general manager of On Net Chile, the local neutral fiber JV between Telefónica and US fund KKR, said in the webinar that the company has now surpassed 3.5mn homes passed in Chile. 

In a March interview with BNamericas, Torres Toral said that On Net expected to reach 4mn homes passed by year-end, with US$100mn in investments.

The Chilean KKR-Telefónica deal was closed last year and was valued at approximately US$1bn. Under the terms of the agreement, Telefónica holds a 40% stake in the business.

In the webinar, Torres insisted that Telefónica has no contractual or commercial advantage for the use of the network despite being an anchor customer and a business partner.

Soon after Chile, the two companies brokered a similar deal for Colombia, creating On Net Fibra Colombia. Given the already-high penetration levels of FTTH in Chile compared with Colombia and the larger addressable residential market in Colombia, Torres Toral said he sees more FTTH opportunities for On Net in Colombia than in Chile in the long term.

On Net Fibra Colombia CEO Ximena Mora Méndez told BNamericas in April that the company expected to reach 2.3mn homes passed with fiber by the end of this year, up from 1.2mn when it launched operations in January.

In June, On Net said its fiber network was already present in 37 municipalities in Colombia, including Bogotá (315,000 homes passed), Cali (170,000), Bucaramanga (160,000), Barranquilla (155,000) and Cartagena (110,000).