Deutsche Telekom AG

Deutsche Telekom said first-half organic sales revenue increased 3.9%, organic EBITDA-AL increased 7.4%, and adjusted EPS increased 10.3%. On the reported financials, Christian Illek said second-quarter EBITDA growth was 7.5%, adjusted earnings were almost 13% higher, free cash flow rose 3% year over year, and adjusted net profit was up 11% year over year. In the U.S., T-Mobile’s service revenue grew 8.9% year over year, core EBITDA grew 11.7%, and account growth was 277,000 in the quarter. In Germany, total revenue grew 3.7%, adjusted EBITDA grew 2.7%, mobile service revenue growth was 2.4%, broadband customer net adds were down 20,000, and fiber net adds were 161,000. Guidance was raised: group free cash flow is now expected at around 20 billion, constant-currency group EBITDA-AL is still guided to around 6% growth and 47.5 billion in 2026, and DT ex-U.S. EBITDA-AL guidance remains 15.4 billion. Management also said the additional buyback lifts total shareholder remuneration in 2026 to almost EUR 10 billion if fully utilized.

Tim Höttges framed the quarter as evidence of broad-based, reliable growth across the group and emphasized that the company is investing in future profitability while returning more capital to shareholders. He repeatedly argued that Deutsche Telekom’s stock is undervalued, citing share-price volatility, strong free cash flow yield, and EPS accretion as reasons to expand buybacks instead of overinvesting into lower-return opportunities. His tone was confident and defensive: he stressed network leadership, spectrum flexibility, and disciplined capital allocation, and pushed back on concerns around satellite and speculative M&A.

Christian Illek focused on the numbers and the phasing. He highlighted T-Mobile’s 8.9% service revenue growth, 11.7% core EBITDA growth, and Germany’s 3.7% revenue growth and 2.7% adjusted EBITDA growth, while noting that Q3 German EBITDA growth should come in below the 2.5% to 2.7% range and Q4 above it. He said free cash flow was up 3% year over year, net debt rose roughly EUR 5 billion quarter over quarter mainly because of shareholder remuneration, and leverage remained at 2.3x without leases and 2.68x including leases, still below the 2.75x target. He also said the expanded buyback does not compromise planned investment, including spectrum auctions and fiber.

Analysts pressed on why Deutsche Telekom is prioritizing buybacks instead of more fiber spending, and management responded that fiber investment has already been reallocated by EUR 400 million annually and that marginal fiber build costs rise sharply. Questions also focused on satellite competition, with management saying satellite is complementary in rural or hard-to-cover areas, but terrestrial networks still have clear advantages in capacity, indoor coverage, latency, and cost per gigabyte. The team also said the T-Mobile and Deutsche Telekom buyback decisions are separate, that they are not selling into T-Mobile’s buyback this year, and that they have no comment on tower, CFIUS, or other M&A speculation.