Social Infrastructure Financing of the Year: Internet Para Todos

SPONSOR: Telefonica, Facebook, IDB Invest, CAF
LOCATION: Peru
FINANCING TYPE & SIZE: JV
LAW FIRMS: Estudio Echecopar, Hogan Lovells, Rebaza, Alcázar & De las Casas, Clifford Chance, Garrigues, DLA Piper Peru

Due to its innovative concept and business model, which will enable a far-reaching impact in Peru’s underserved communities, the Internet para Todos program has been awarded LatinFinance’s Social Infrastructure of the Year award.

Telefónica del Peru and Facebook have teamed with development banks IDB Invest and CAF to provide internet access to rural populations in Peru.

The composition of the Internet para Todos joint venture is unique in that it constitutes the first time a telecom player like Telefónica has paired with a company from the digital industry such as Facebook, according to Aitor Ezcurra, IDB Invest corporate division chief.

“Facebook brings the technical expertise of managing data and the commitment to increase connectivity in the region. Telefónica brings the knowledge of the telecom industry in Peru. The development banks bring a long-term view and a deep connection to the public sector,” Ezcurra says.

Internet para Todos will rely on existing infrastructure owned by Telefónica and invest in upgrading existing voice services and building new towers, fiber optic cables and antennas to deliver fast mobile internet coverage in a wholesale Network as a Service (NaaS) model, Ezcurra says. Additional infrastructure will take roughly a year and a half to complete.

He says the joint venture plans to avoid any leverage and fund all capital expenditures through equity contributions.

Telefónica subsidiary Movistar is the first Mobile Network Operator to have signed on, but the JV expects several client agreements in the coming months.

Currently, 8 million people don’t have access to internet in the Andean country. The main regions that Internet para Todos plans to serve include Cusco, Huanuco, Junin, Amazonas, Ancash, Arequipa, Lambayeque, Loreto, among others, according to Ezcurra.

The concept behind the “Internet for All” could easily be replicated in other parts of Latin America, especially in Argentina, Bolivia, Brazil and Colombia, Ezcurra adds. Currently, 100 million people don’t have adequate access to mobile broadband in the region.