WOM Colombia is 'saved' after US and UK investors step in

WOM Colombia “has been saved,” ICT minister Mauricio Lizcano said, thanks to an agreement with investors from the United States and the United Kingdom.

"The arrival of new investors is great news because it shows the confidence that they continue to have in the country, to invest new and fresh resources in Colombia, managing to maintain a competitive market, with several players, which benefits users and customers," Lizcano said in a press release.

WOM filed for bankruptcy protection with the local regulator in April 2024, following WOM Chile, which started a chapter 11 bankruptcy protection process in the US.

The deal in Colombia came after WOM Chile reached an agreement with an ad hoc group of noteholders that includes a capital injection of up to US$500mn. 

In Colombia, an investors group named SUR Holdings will acquire WOM’s operation after having invested in December to strengthen the mobile operator’s commercial and operational capabilities, the company said in a press release, but details of the deal were not disclosed. 

“With this milestone, our future is bright. We are committed to closing the digital divide across the country and are excited to continue strengthening our position in the market. This acquisition allows us to successfully navigate the opportunities and challenges ahead,” WOM Colombia CEO Ramiro Lafarga said in a statement. 

The investment will help WOM to expand and improve coverage for more than 7mn mobile clients. 

WOM must also invest in its 5G network after acquiring spectrum in the 3.5GHz band for 318bn pesos (US$73.9mn) in 2023. The company also committed to connect 318 schools and establish 24 base stations with 4G along primary and secondary roads.

Meanwhile, the bankruptcy process continues. The government granted the company a three-year grace period for paying for the use of low-band spectrum, but these payments will resume in 2029.

About 45% of WOM’s debt relates to unpaid spectrum fees to the government.

Competition

The acquisition of WOM will also allow to maintain three-player market competition after Movistar and Tigo announced their integration.

According to data from the ICT ministry, WOM had 6.9mn mobile accesses in June 2024. Claro led with 40.2mn, followed by Movistar (21mn) and Tigo (15.1mn).

WOM Colombia has invested more than US$1bn in the country's telecoms sector. The company has deployed more than 5,100 antennas and opened 475 stores nationwide.