Deutsche Telekom AG

For the first half of 2026, Deutsche Telekom reported 3.9% organic sales growth, 7.4% organic EBITDA-AL growth, and 10.3% adjusted EPS growth. T-Mobile U.S. delivered 8.9% year-on-year service revenue growth and 11.7% core EBITDA growth on a U.S. GAAP basis in Q2, while account growth was 277,000 and ARPA was up 2%. In Germany, total revenues grew 3.7% and adjusted EBITDA grew 2.7% in Q2; mobile service revenues accelerated to 2.4% and broadband revenue growth improved to 1.9% from 1.6% in Q1, though broadband customers declined by 20,000 in the quarter. Free cash flow was up 3% year on year in Q2, adjusted earnings were up almost 13%, and adjusted net profit rose 11%. Net debt increased by roughly EUR 5 billion quarter on quarter, with leverage at 2.68x including leases and 2.3x excluding leases; management said leverage remains below its 2.75x target. Guidance was raised to around EUR 20 billion group free cash flow, with constant-currency group EBITDA-AL guidance reiterated at around 6% to EUR 47.5 billion in 2026, and DT ex-U.S. EBITDA-AL guidance reiterated at EUR 15.4 billion.

Tim Höttges struck a confident, defensive tone, emphasizing that Deutsche Telekom is delivering strong and reliable growth while investing in future profitability and shareholder value. He repeatedly argued that the stock is undervalued versus intrinsic value and peers, which justified the larger buyback, but he also stressed discipline: the company will not sacrifice network leadership, spectrum flexibility, or balance sheet strength for capital returns. He was also forceful on satellite and other competitive threats, saying they are complementary in some use cases but do not create a substitution risk for Deutsche Telekom’s networks.

Christian Illek focused on the financial bridge from operating performance to guidance. He highlighted Q2 service revenue growth of 8.9% at T-Mobile U.S., 3.7% total revenue growth in Germany, 2.7% adjusted EBITDA growth in Germany, 7.5% EBITDA growth in the quarter, free cash flow up 3%, and adjusted net profit up 11%. He said German broadband losses were largely price-related and should normalize by Q4, that broadband revenue growth should accelerate further in the second half, and that leverage remains comfortably below 2.75x even with the expanded buyback.

Analysts pressed management on why Deutsche Telekom is prioritizing buybacks over fiber and other infrastructure, whether the new buyback changes the decision not to sell into the T-Mobile U.S. buyback, and whether any tower or M&A opportunities were being considered. Management said the DT and T-Mobile buyback decisions are independent, confirmed it will not sell into the T-Mobile U.S. buyback this year, and declined to comment on tower or M&A speculation. Questions also centered on satellite risk, U.S. versus European exposure, and CFIUS/dividend concerns; management said satellite is complementary, fixed wireless is superior in most locations, there is no known CFIUS issue around U.S. dividends, and any spectrum/satellite access issues are ultimately political or regulatory rather than evidence of a core business threat.