Telefónica is reportedly considering the sale of its Peruvian subsidiary in the coming months, in what could be one of the most significant decisions the company has made in South America in recent decades.
According to multiple sources, meetings have been held in Peru since late last year to expedite the plans. However, it remains to be seen whether the arrival of Marc Murtra as Telefónica’s new chairman will influence the company’s strategy, potentially delaying the sale. The operation had been under discussion during the current leadership.
In recent days, there have been discussions in Lima to advance negotiations. Sources indicate that talks with potential investors interested in acquiring Telefónica’s business in Peru have intensified, in a country that has long been a burden on the company’s financial performance.
Financial Challenges
Telefónica’s Peruvian division has faced continual losses and ongoing legal disputes with the Peruvian government, key factors driving the company to reconsider its strategy in the region. News: Telefonica weighs up options in latam
Telefónica del Perú is projected to face a challenging financial situation in 2025, with cumulative losses potentially exceeding €2 billion. In an effort to mitigate the situation, the company has implemented various financial mechanisms aimed at reducing its losses. Among these measures is the utilisation of a $2 billion share premium, along with a capital reduction, to help offset the losses. Additionally, Telefónica Hispanoamérica has provided financial support to the Peruvian subsidiary in an attempt to stabilise the situation.
Cancelation of fibre joint venture in Peru
In February 2025, Telefónica Peru cancelled its planned fibre joint venture with Chile’s Entel and U.S. private equity firm KKR, another setback for the struggling business. The deal, proposed in July 2023, would have created ON*NET Fibra Peru, with KKR holding 54%, Telefónica Hispanoamérica 36%, and Entel 10%. The cancellation stems from disagreements over closing conditions, leaving the venture’s future uncertain and marking another blow to Telefónica’s local operations.
Legal uncertainty
Legal uncertainty in Peru is another factor contributing to the company’s potential exit. In October, Telefónica filed a claim for €1.1 billion in damages related to historical tax assessments and unpaid tax provisions in the country. These disputes stem from two decades ago, when a Peruvian congressional commission issued a special report investigating the privatisation of public companies, including Compañía Peruana de Teléfonos (CPT) and Entel Perú. Telefónica acquired both companies in deals worth over €1 billion each.
Further legal challenges have also arisen. In 2021, Peru’s tax authority, Sunat, launched an investigation into Telefónica’s supplier relations, particularly scrutinising its centralised purchasing system in Germany. The investigation explored whether this setup was designed solely for tax optimisation, as the company benefits from tax credits in Germany that lower its effective tax rate below 15%.
Search for a CEO
Sources suggest that Telefónica is seeking a CEO experienced in sales, acquisitions, and liquidations to manage this historic operation. The company has reportedly reached out to several U.S.-based consultancy firms to identify a suitable candidate for the role of CEO, which Peruvian law allows to be filled by a legal entity.
Telefónica’s plan involves offloading assets held by the Peruvian subsidiary to reduce the final sale price and take advantage of Peruvian legislation, which facilitates the sale of companies after three consecutive years of losses, allowing for the declaration of insolvency or the initiation of restructuring proceedings.
Negotiations stalled
Although Telefónica has been in talks with potential buyers in recent months, negotiations appear to have stalled. Sources indicate that Telefónica’s management has met on several occasions with Carlos Torres and Eduardo Barriga, former owners of the Peruvian fibre-optic company Win. Both investors are considered the frontrunners to acquire Telefónica’s Peruvian business. The company’s large fixed-line customer base, which dominates the local market, has attracted significant interest from the business community.
Negotiations took place several months ago, though talks have recently slowed due to disagreements over pricing. Sources describe the situation as "the prelude to a potential handshake," suggesting that the parties may still reach an agreement. Abasolo’s recent trip to Peru may have been prompted by the stalled discussions, though some sources speculate that Marc Murtra’s arrival could alter the course charted by Álvarez-Pallete.
Potential exit from Argentina
Telefónica’s potential exit from Peru coincides with discussions of a similar divestment in Argentina. Bloomberg reported last week that the company is considering leaving the South American country, with a deal in Argentina mirroring the one being negotiated in Lima. In recent months, Telefónica has received preliminary interest from both Argentine and foreign investors regarding its Argentine unit. Sources told La Nación that "the operation is progressing smoothly, but no candidate has yet emerged as the frontrunner."
