Liberty Latin America ups ante in Peru with Wow fiber investment

Liberty Latin America is upping its ante in Peru, a market that has not previously been core to its operations, with an investment in local fiber broadband provider Wow.

In partnership with Wow, Liberty said it has been deploying fiber-to-the-home at least since 2021, focusing on provinces outside capital Lima.  

“With 34mn people and 10mn homes in total, Peru presents a large market opportunity. It is more than six times the size of our largest consolidated market,” CEO Balan Nair told investors in an earnings call.

Liberty, which owns 50% of Wow, sees Peruvian fixed broadband as an addressable market worth US$3.5bn. Outside Lima, competition is lower and connectivity opportunities are greater.

According to the executive, Liberty allocated approximately US$100mn in equity for its stake in Wow.

"We're very excited about that investment and the future prospects in Peru," said Nair.

With 19.8% of the market, Wow is the third largest broadband player in Peru after Telefónica Movistar and Win, but is the only constantly increasing its market share.

It has approximately 3mn homes passed with fiber. In the year to June, Grupo Win lost 2.8 percentage points of its market share, whereas Wow gained 3.6 points, closing the gap on its rival.

Wow's footprint. Darker areas with denser fiber deployments. Credit: LLA

Liberty is not alone in seeing Peru as an opportunity, as it is increasingly attracting investors to its underpenetrated fiber segment. During Q3, Latin America-focused private equity firm Linzor Capital Partners completed its previously disclosed acquisition of Win. 

That was Linzor’s second acquisition in the sector following its investment in Chilean fiber company Mundo. Mundo was sold to US fund DigitalBridge in 2022.

Submarine cable footprint

Beyond Peru, the company is also upbeat about the extension of its regional submarine cable footprint, following the addition of new partners to the now-called Manta project. 

This pan-American system is a joint project with Gold Data and Telecom Italia’s Sparkle and is due to go into operation in 2H27. 

Liberty said it anticipates demand for that cable from hyperscaler datacenter expansion and connectivity across the region.

The company’s Q3 also saw the October completion of América Móvil’s ClaroVTR acquisition, the JV operated with the Mexican group in Chile, and the September completion of its own acquisition of Echostar mobile spectrum and subscribers in Puerto Rico and the US Virgin Islands.

In terms of performance, the firm's total revenues declined 3% year-on-year on a reported basis, slipping to US$1.08bn, and were down 1% to US$3.3bn in January-September.

The group ended the quarter with 1.96mn unique customers, with 18,900 net losses in the period. Mobile accesses grew by 9,400 in the quarter to 7.98mn, while fixed service accesses declined by 11,300 to 3.98mn.

Accesses are different to unique customers, as one client my have more than one service contracted with the company.

The company reported losses attributable to shareholders of US$436mn in Q3, versus a net profit of US$60mn in the same period of last year.

“Turning to the fourth quarter, we plan to deliver a strong performance driven by B2B growth and further progress in the recovery of our Puerto Rican operations, and we aim to produce our strongest quarter in cash flow generation this year,” Nair said in the financial statement.

Geographies

In Q3, the group’s sole operation to grow was Liberty Costa Rica, at 8% year-on-year, whereas C&W Panama (-1%), Liberty Networks (-2%) and Liberty Puerto Rico (-12%) all saw declines. C&W Caribbean was flat for the period. 

Liberty said that mobile revenue growth in the Caribbean was offset by drops in fixed and B2B, due to negative impacts from Hurricane Beryl in the quarter.

In Panama, performance was affected mainly by the B2B operation, where sales declined 13% due to lower revenue from government-related projects, some of which the company anticipates being executed in the current quarter.

Meanwhile, fixed residential revenue in Panama was up 5%, boosted by FTTH deployments that drove up broadband additions, said the company. Liberty claims that over 95% of its network in the country is now full-fiber or hybrid fiber coaxial (HFC). 

Mobile in Panama grew by 9%, driven partly by improved prepaid ARPU, as well as increased handset sales, Liberty said. In October, Liberty started commercial sales of 5G in Panama, being the first local telco to do so. 

In addition to Panama, the group also has 5G up and running in Puerto Rico, Costa Rica and the Cayman Islands.

The wholesale, data-focused unit Liberty Networks, for its part, was affected by lower network revenue and by certain financial impacts. Both effects were partly offset by higher enterprise revenue, due primarily to “continued growth in managed services and B2B connectivity.”

As for Puerto Rico and the US Virgin Islands, the impact of credits issued to fixed service customers following Hurricane Ernesto in August continued to play a role, the company said. 

There was also a reduction in mobile subscribers in Puerto Rico impacted by “disruption related to the migration of clients” to its mobile network, and lower equipment sales due to the reduced customer base and higher volumes related to the iPhone 15 launch in 2023, as compared to the iPhone 16 launch in 2024.