Telefónica Sells Chilean Unit: Movistar Changes & What It Means for Customers

Spanish telecommunications giant Telefónica has completed the sale of its Chilean subsidiary to a consortium of NJJ Holding and Millicom Spain for $1.2 billion, marking the end of a 35-year presence in the country. The deal, finalized on February 17, 2026, is part of a broader strategic shift by Telefónica to reduce its exposure to Latin American markets.

The transaction consists of an initial payment of $50 million, with a potential for an additional $150 million contingent upon the achievement of certain value-creation milestones. Telefónica will also provide further financial resources to ensure a smooth transition for the Chilean operation, according to a company statement.

Continuity of Service Expected for Movistar Customers

Telefónica anticipates a seamless continuation of services under the new ownership. Alfonso Gómez, CEO of Telefónica Hispam, stated that the company is leaving behind a “robust operation, a modern infrastructure and a platform prepared for the new shareholder to continue promoting the country’s digital development on solid foundations.” This suggests a focus on minimizing disruption for Chilean consumers.

Crucially, customers of Movistar, Telefónica’s brand in Chile, are not expected to experience immediate changes to their plans or contracts. Existing contracts, mobile plans, and home services – including fiber optic and television – will maintain their current terms and pricing, at least in the short to medium term. The Movistar brand itself is expected to continue operating as before, as the deal is structured as an acquisition rather than a merger.

Strategic Shift for Telefónica

The sale of the Chilean unit is the latest in a series of divestments by Telefónica in Latin America, including previous exits from Colombia, Argentina, Peru, Costa Rica, and Guatemala. This reflects a strategic recalibration by the company, prioritizing investment in its core markets of Britain, Germany, Spain, and Brazil. The move comes as Telefónica navigates a significant debt burden, having reported a net loss of 1.08 billion euros ($1.3 billion) between January and September 2025, partly attributed to losses from Latin American asset sales.

The decision to exit Chile also highlights a broader trend of European telecommunications companies reassessing their investments in the region. The changing economic landscape and increased competition in Latin American markets appear to be driving this shift.

Financial Details and Transition Support

Beyond the initial $50 million payment, the potential for an additional $150 million is tied to the achievement of specific performance targets within the Chilean operation. This structure incentivizes the new owners, NJJ Holding and Millicom, to continue investing in and developing the business. Telefónica’s commitment to providing additional financial support during the transition further underscores its desire to ensure a stable handover.

Telefónica Chile’s debt stood at 479 million euros at the end of last year, a factor likely considered in the structuring of the deal and the provision of transition support.

New Ownership and Market Dynamics

The acquisition by NJJ Holding and Millicom introduces new international capital into the Chilean telecommunications market. While the immediate impact on consumers is expected to be minimal, the change in ownership could lead to new investment strategies and competitive dynamics in the long term. The introduction of these new players signals a potential shift in the Chilean telecommunications landscape.

The transaction isn’t expected to cause immediate operational changes for the millions of customers currently served by Movistar. However, the long-term implications of the new ownership structure remain to be seen, as NJJ Holding and Millicom begin to implement their own strategies for the Chilean market.

Latham & Watkins LLP advised Telefónica on the sale, providing legal counsel throughout the transaction.