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1. Company Snapshot

1.a. Company Description

Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services.The company operates through five segments: Germany, United States, Europe, Systems Solutions, and Group Development.It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers.


The company also provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators.In addition, it offers internet services; internet-based TV products and services; and information and communication technology systems for multinational corporations and public sector institutions with an infrastructure of data centers and networks under the T-Systems brand, as well as call center services.The company has 242 million mobile customers and 22 million broadband customers, as well as 27 million fixed-network lines.


Deutsche Telekom AG has a collaboration with VMware, Inc.on cloud-based open and intelligent virtual RAN platform to bring agility to radio access networks for existing LTE and future 5G networks; and partnership with Microsoft to deliver high-performance cloud computing experiences.The company was founded in 1995 and is headquartered in Bonn, Germany.

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1.b. Last Insights on DTE

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1.c. Company Highlights

2. Deutsche Telekom's Q3 2025 Earnings: A Strong Performance

Deutsche Telekom delivered a robust financial performance in the third quarter of 2025, with 3.7% organic service revenue growth, 4.4% organic EBITDA growth, and 6.8% growth in free cash flow for the first nine months. The company's adjusted earnings per share grew by 9.5% during the same period, beating analyst estimates of 0.501 with an actual EPS of 0.557. The strong performance was driven by the U.S. segment, which reported 9.1% service revenue growth and 5.6% core EBITDA growth.

Publication Date: Nov -14

📋 Highlights
  • Financial Growth:: 3.7% organic service revenue, 4.4% EBITDA, 6.8% free cash flow, and 9.5% adjusted EPS growth for 9M25.
  • Shareholder Returns:: 11% dividend increase to EUR 1/share and EUR 2 billion share buyback in 2026, totaling EUR 7 billion.
  • U.S. Segment Performance:: 9.1% service revenue growth, 5.6% core EBITDA growth, and raised net add guidance for T-Mobile US.
  • Fiber Expansion:: Record homes passed in Germany, 23% organic revenue growth in T-Systems, and EUR 1 billion AI partnership with NVIDIA.
  • Capital Allocation:: EUR 15 billion surplus available for investments/M&A, EUR 8 billion surplus unallocated, and EUR 200 million annual fiber CapEx increase.

Segmental Performance

The U.S. segment was the standout performer, driven by T-Mobile US's strong customer growth and revenue increase. Europe also reported consistent EBITDA growth, with 2.2% revenue growth, 3.3% service revenue growth, and 4.6% EBITDA growth. Germany's Q3 financials were impacted by prior-year comps and cost phasing, resulting in a 1.8% decline in revenue, but the company expects an EBITDA growth of above 2% in the fourth quarter.

Strategic Progress

Deutsche Telekom made significant progress on its strategic agenda, including successful acquisitions in Germany, a record fiber build, and new collaborations. The company plans to reinvest tax benefits into higher CapEx and step up its fiber build-out without changing its DT ex U.S. free cash flow outlook. As CEO Tim Höttges noted, the company is focused on "network leadership, customer growth, and thoughtful balance of commercial and financial growth."

Valuation and Outlook

Deutsche Telekom's valuation metrics appear reasonable, with a P/E Ratio of 10.65, P/B Ratio of 2.28, and Dividend Yield of 3.28%. The company's commitment to shareholder returns is evident in its proposed 11% dividend increase to EUR 1 per share and plans to buy back EUR 2 billion worth of shares in 2026. With a strong track record of execution and a solid plan in place, Deutsche Telekom is well-positioned to drive growth and create value for shareholders.

Growth Initiatives

The company is capitalizing on the sovereignty discussion in Europe, with a focus on AI implementation. Deutsche Telekom has developed an AI factory with 10,000 GPUs, increasing Germany's GPU capacity by 50%. This is driving credibility and opportunities in the public and business sectors, including defense. Analysts estimate next year's revenue growth at 2.4%, and the company's commitment to its capital market targets is evident in its plans to drive growth through strategic initiatives.

3. NewsRoom

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Deutsche Telekom and Schwarz Group to build AI data centre, German newspaper reports

Nov -30

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Is T-Mobile US Stock Underperforming the Nasdaq?

Nov -26

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Is Deutsche Telekom Still Attractively Priced After Five Year 115% Share Price Surge?

Nov -22

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NVIDIA Announces Financial Results for Third Quarter Fiscal 2026

Nov -19

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Belden Appoints Adel Al-Saleh to Board of Directors

Nov -19

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Cybersecurity group Allurity strengthens its Board of Directors with the appointment of Steffen Roehn

Nov -19

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American Council on Germany Honors Nikesh Arora with the John J. McCloy Award in New York

Nov -17

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Bank of America resets Nvidia stock forecast before earnings

Nov -16

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.98%)

6. Segments

United States

Expected Growth: 4.5%

Deutsche Telekom's US operations, driven by increasing demand for 5G services and IoT solutions, will experience steady growth, supported by strategic investments in network infrastructure and digitalization.

Germany

Expected Growth: 2.1%

Deutsche Telekom AG's Germany operations are expected to grow driven by increasing demand for 5G services, fiber-optic network expansion and growth in the digital business segment.

Europe

Expected Growth: 4.2%

Deutsche Telekom AG's European operations will benefit from increasing demand for high-speed internet and mobile connectivity, driven by the adoption of 5G and IoT technologies.

Systems Solutions

Expected Growth: 5.5%

Deutsche Telekom’s Systems Solutions segment will be driven by increasing demand for digital transformation, cloud migration, and cybersecurity services, as well as the need for efficient network management and 5G deployment.

Group Headquarters & Group Services

Expected Growth: 4.5%

Deutsche Telekom's growth is driven by its robust 5G network, increasing demand for data services, and its strong market position in Europe. The company's efforts to expand its IoT and cloud services will further boost growth.

Group Development

Expected Growth: 3.5%

Deutsche Telekom’s Group Development segment is driven by increasing demand for IoT and 5G solutions, alongside growth in the European digital infrastructure market, expected to drive revenue growth.

Reconciliation

Expected Growth: 4.2%

Deutsche Telekom's growth is driven by its 5G network expansion, increased demand for cloud services, and strategic investments in digital transformation, positioning the company for sustained growth in the European telecom market.

7. Detailed Products

Mobile Communications

Deutsche Telekom offers a range of mobile communication services including voice, data, and messaging services to individuals and businesses.

Fixed Network

Deutsche Telekom provides fixed-line telecommunications services including broadband internet, voice, and data services to households and businesses.

Internet of Things (IoT)

Deutsche Telekom offers IoT solutions and services that enable businesses to connect and manage devices, machines, and sensors.

Cloud Services

Deutsche Telekom provides a range of cloud services including infrastructure, platform, and software as a service (IaaS, PaaS, SaaS) to businesses.

Cybersecurity

Deutsche Telekom offers a range of cybersecurity solutions and services to protect businesses from cyber threats and attacks.

Digital Solutions

Deutsche Telekom provides digital solutions and services including digital transformation consulting, software development, and data analytics.

IT Services

Deutsche Telekom offers a range of IT services including IT consulting, system integration, and managed services to businesses.

8. Deutsche Telekom AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Deutsche Telekom AG faces moderate threat from substitutes, as customers have limited alternatives for fixed-line and mobile telecommunications services. However, the increasing popularity of over-the-top (OTT) services and voice-over-internet protocol (VoIP) technology poses a threat to the company's traditional voice and messaging services.

Bargaining Power Of Customers

Deutsche Telekom AG has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's diversified product offerings and strong brand reputation limit customers' ability to negotiate prices or demand customized services.

Bargaining Power Of Suppliers

Deutsche Telekom AG relies on a few large suppliers for network equipment and services. While the company has some bargaining power due to its size and scale, suppliers like Nokia and Ericsson have significant market power, which can impact Deutsche Telekom's negotiating position.

Threat Of New Entrants

The telecommunications industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for extensive network infrastructure. These barriers limit the threat of new entrants and provide Deutsche Telekom AG with a relatively stable competitive environment.

Intensity Of Rivalry

The German telecommunications market is highly competitive, with several established players like Vodafone, Telefónica, and Drillisch. Deutsche Telekom AG faces intense competition in terms of pricing, network quality, and service offerings, which can impact its market share and revenue growth.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.40%
Debt Cost 6.15%
Equity Weight 34.60%
Equity Cost 7.02%
WACC 6.45%
Leverage 189.03%

11. Quality Control: Deutsche Telekom AG passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Orange

A-Score: 7.2/10

Value: 6.3

Growth: 3.9

Quality: 4.4

Yield: 9.4

Momentum: 9.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
AT&T

A-Score: 7.0/10

Value: 7.1

Growth: 2.6

Quality: 5.7

Yield: 9.0

Momentum: 8.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Deutsche Telekom

A-Score: 6.7/10

Value: 7.5

Growth: 6.2

Quality: 5.6

Yield: 5.6

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Telefónica

A-Score: 6.3/10

Value: 8.6

Growth: 1.8

Quality: 4.2

Yield: 9.4

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Vodafone

A-Score: 6.1/10

Value: 9.4

Growth: 1.2

Quality: 2.0

Yield: 8.8

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Swisscom

A-Score: 6.1/10

Value: 5.0

Growth: 2.8

Quality: 6.4

Yield: 6.9

Momentum: 5.5

Volatility: 10.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.56$

Current Price

27.56$

Potential

-0.00%

Expected Cash-Flows