Telekom 2024: Sales jump to 115.8 billion euros despite risks!

Imagine standing at the intersection of data streams racing around the globe in real time – a digital network that connects and powers the world. This is exactly where Deutsche Telekom AG is positioning itself, in the middle of a telecommunications market that will be characterized by rapid growth and technological dynamics in 2024. The industry is experiencing an unstoppable upward trend, driven by the unbroken demand for fast broadband in both fixed and mobile networks. This hunger for connectivity is reflected in the numbers: fixed-line data traffic in Europe will reach an impressive 1,016 exabytes in 2024, up 13% year-on-year, while mobile data traffic is up 16% at 141 exabytes, the same as the current one Deutsche Telekom annual report shows.

A look at the global forecasts makes it clear that this is just the beginning. Ericsson expects global mobile data traffic to double by 2030, while in regions such as North America and Western Europe, fixed-line spending per user continues to rise. Telecommunications services revenue will grow 2.0% globally in 2024 compared to the previous year, primarily driven by higher investments in data services. But with growth comes competition: the industry is highly competitive, with a large number of providers fighting for customers in the fixed-line and mobile communications markets. At the same time, the focus is on regulatory developments in the EU, such as the Letta and Draghi reports, which call for reforms to strengthen competitiveness, as well as the EU Commission's planned Digital Network Act for 2025.

If you zoom in on the German market, you see a stable picture with a slight upward trend. Total sales in the telecommunications sector will reach 74.3 billion euros in this country in 2024, an increase of 1.8% compared to the previous year. The number of broadband connections climbed to 37.7 million by the end of the first half of the year, while the mobile phone market grew by 1.4% with sales of 19.6 billion euros. This development is supported by the high demand for connectivity, which remains unbroken despite economic stabilization and 2% inflation in the EU. In particular, the convergent customer base in the Fixed Mobile Convergence (FMC) area is becoming increasingly important and continues to drive sales in Europe.

On the other side of the Atlantic, other dynamics dominate. In the USA, T-Mobile US scores with the best 5G availability, covering 54% of the area, and is driving growth in the fixed broadband network through Fixed Wireless Access (FWA). Competitors like AT&T and Verizon are moving to multistate fiber services and modernizing their network architecture by moving to Open RAN. The expansion is supported by the BEAD program, which aims to provide broadband to underserved areas with $42.45 billion. These investments signal how seriously the US market views digital infrastructure as a growth engine.

Technological advances and new business areas also shape the landscape. Streaming services and pay TV offerings are becoming more relevant as innovations in AI, 5G and digital services continue to transform the industry. At the same time, Deutsche Telekom is investing in research and development, albeit with R&D expenditure of 25 million euros in 2023, which is slightly below the previous year's figure of 30 million euros. In addition, 708 million euros flow into capitalizable self-created intangible assets, especially in software, such as Annual report 2023 shows in detail. These investments are crucial to staying technologically ahead in global competition.

Another aspect driving the industry is the focus on fiber as the backbone of the digital future. While billion-dollar programs in the USA are pushing expansion, European markets are also focusing on modernizing their networks. At the same time, convergent offerings are gaining ground as customers increasingly demand fixed-line and mobile services from a single source. These trends indicate that Deutsche Telekom operates in an environment that is characterized by both regional characteristics and global developments and must strategically adapt to them.

Let's navigate the complex landscape of the telecommunications market, where every decision and technological advancement determines a company's position. At the center of this competitive field, Deutsche Telekom AG maintains its position with an impressive market presence, particularly in Germany. With sales of around 116 billion euros in 2024, largely generated by T-Mobile US, and an annual profit of 11.2 billion euros (after 17.8 billion in the previous year), the group remains a heavyweight in the industry. It employs around 200,000 people worldwide, including 75,000 in Germany, and serves 68.6 million customers in the domestic mobile communications market alone, including over 26 million contract customers.

The numbers speak for themselves when it comes to market shares. In the German mobile communications sector, Deutsche Telekom holds the top position with a share of almost 32% in sales, ahead of Telefonica and Vodafone. The situation in the broadband fixed-line market is even more dominant: with over 17 million fixed-line connections and around 15 million broadband connections, the group has a market share of over 40%, well ahead of competitors such as Vodafone, 1&1 and Telefonica. This strong position is supported by data from the Federal Network Agency, as a recent analysis shows Statista shows that documents the development of market shares since 2001.

But who are the main competitors keeping up the pressure? In Germany, Vodafone and Telefonica are at the forefront, both with aggressive pricing strategies and investments in network expansion. Vodafone relies on a wide range of landline and mobile phone offerings, while Telefonica (O2) scores with attractive tariffs, especially in the mobile phone market. Internationally, especially in the USA, T-Mobile US competes with giants such as AT&T and Verizon, which are strengthening their position through massive fiber investments and innovative network architectures such as Open RAN. These competitors challenge Deutsche Telekom not only in terms of price, but also in terms of technological development.

A decisive advantage of Deutsche Telekom lies in its historically developed infrastructure, which, as a former monopolist, ensures it a nationwide presence in Germany. This basis makes it possible to offer a high quality of service in both fixed and mobile networks, which promotes customer loyalty and brand loyalty. Added to this is the strong brand – the “Pink Giant” in magenta is a synonym for reliability. Internationally, the group benefits from the dynamics of T-Mobile US, which has a competitive advantage over AT&T and Verizon with the best 5G availability in the USA (54% area coverage).

Further strengths arise from the strategic focus on convergent offerings. By bundling fixed-line and mobile services (Fixed Mobile Convergence), it is possible to bind customers to the group in the long term and increase average revenue per user. For 2025, sales of around 19 billion euros are forecast in the fixed network sector, a sign of the continued relevance of this segment. At the same time, despite regulatory requirements resulting from its monopoly position, Deutsche Telekom remains flexible enough to respond to market changes, such as detailed insights Statista clarify.

A look into the future shows that the dominant market position in Germany is likely to remain in place, even if competition remains intense. The ability to quickly integrate technological innovations such as 5G and AI-based services will be crucial to staying ahead. Equally important is the balance between customers' price sensitivity and investments in network quality in order to assert themselves against the attacks of the competition. The path is paved, but the challenges are ever-present as the market continues to evolve.

Let's delve into the financial DNA of Deutsche Telekom AG, where numbers and key figures reveal the group's true strength and challenges. A robust picture emerges in 2024: Group sales rose by 3.4% to 115.77 billion euros, with the second quarter alone recording 28.4 billion euros, an increase of 4.3% compared to the previous year. Service revenues in particular stood out with growth of 4.9% to 24.1 billion euros in Q2, which underlines the ongoing demand for telecommunications services. The main driver of this success remains the US subsidiary T-Mobile, which contributes significantly to the increase in sales.

A closer look at the earnings trend reveals mixed signals. The adjusted consolidated profit in Q2 2024 climbed by an impressive 31.3% to 2.5 billion euros, while the annual net profit was 11.2 billion euros - a decrease compared to 17.8 billion euros in the previous year, due to a positive special effect from the radio tower sale in 2023. The adjusted operating profit (EBITDA AL), on the other hand, increased by 6.2% year-on-year to 43.02 billion euros, in Q2 even increased by 7.8% to 10.8 billion euros. This development reflects solid operational performance, such as the current one Interim report for the second quarter of 2024 shows in detail.

The margins and cash flow metrics underpin the financial stability. Free cash flow AL in Q2 2024 exploded with an increase of 48.5% to 5.2 billion euros, and the forecast for the full year was raised slightly to around 19.0 billion euros (previously 18.9 billion). This indicates a strong liquidity base that enables investments in network expansion and innovation. The EBITDA margin is around 37.2% for the full year, an indicator of efficient cost control despite high capital expenditure. Further profit growth of 4.5% to around 44.9 billion euros is expected for the current year, according to reports Tagesschau.de underline.

From a regional perspective, there are different developments. In the Germany operating segment, sales grew by 3.6% to 6.4 billion euros in Q2, driven by strong customer growth with 311,000 new mobile contract customers and 113,000 additional fiber optic connections. However, business contracted by 0.2% in the fourth quarter due to declining public orders. In the US, T-Mobile reaches over 100 million postpaid customers, with an increase of 1.3 million in Q2, and increased adjusted EBITDA AL by 9.1% to $7.8 billion. Europe is also making progress, with adjusted EBITDA AL of €1.1 billion (+8.9%) and profit growth for the seventh consecutive year.

The balance sheet figures shed light on the financial structure. Net financial liabilities amount to 135.1 billion euros, a high value that reflects the aggressive investment strategy in network infrastructure and 5G. Nevertheless, the debt ratio to EBITDA remains within a manageable range, which indicates sustainable financing. Order intake in the systems business increases by 28.3% to 957 million euros, while sales in this area grow by 2.1% to 981 million euros, which underlines the diversification of income sources.

Another highlight is the record dividend of 90 cents per share (previously 77 cents), which will be paid out after the general meeting in April 2025. This signals confidence in sustainable profitability and is intended to reward shareholders. At the same time, the focus remains on customer growth: In Germany, mobile phone customers increased by 3.0% to 65.2 million, while broadband connections increased by 1.6% to 15.1 million. In the USA, the customer base grew by 18.0% to 125.9 million, while in Europe broadband customers rose by 9.8% to 7.1 million. This dynamic suggests that the financial basis for further expansion and innovation is in place, while the challenges of high debt and regional disparities remain.

Let's travel back through the highs and lows of the stock market charts to take a closer look at the price development of Deutsche Telekom AG. Since its privatization in 1995, the stock has had an eventful history, marked by the dot-com bubble, financial crises and the rapid rise of the telecommunications industry. A look at the long-term data shows that the stock has undergone a remarkable, albeit volatile, development since December 31, 1999. While the starting value of a hypothetical portfolio was 10,000, the value within the boerse.de Megatrend shares reached a high of 4,235,959.53 on November 30, 2021, before falling back to 3,727,156.17 by December 29, 2023, according to data from boerse.de clarify.

A detailed look at the last few years shows a steady recovery after the low points of the pandemic. In 2020, the share price was temporarily below 12 euros, driven by uncertainties in the global market and high investment costs for 5G expansion. However, the price has since stabilized and will be in a range between 20 and 24 euros in 2024, indicating growing investor confidence in the group's operational strength and dividend policy. The record dividend of 90 cents per share in 2024 has further supported this upward trend, even if short-term fluctuations due to macroeconomic factors such as inflation and interest rate policy are inevitable.

The volatility of the stock remains a key issue for investors. Looking over the last five years, there has been a moderate level of fluctuation compared to technology stocks, which are subject to greater fluctuations. Deutsche Telekom's annualized volatility is around 20-25%, indicating some stability supported by its strong market position and constant demand for telecommunications services. However, external shocks, such as regulatory changes in the EU or competitive pressure in the USA, can trigger short-term price declines. Historical data collected via platforms such as onvista.de Available as a CSV download, they provide detailed insights into these fluctuations and enable precise analysis over any time period.

Compared to the DAX index, Deutsche Telekom shows a mixed performance. While the DAX benefited from the strong development of technology and industrial companies over the last ten years, Telekom shares lagged behind in phases of high investment pressure. Between 2015 and 2020, it underperformed the index by around 10-15%, due to high costs for network expansion and acquisitions such as the takeover of Sprint by T-Mobile US. Since 2021, however, this picture has changed: the share has been able to keep up with the DAX and even outperform it in some quarters, driven by strong growth in the USA and the increasing dividend yield, which is around 4-5% and is above the DAX average of 3%.

Another point of comparison is the Nasdaq 100, which serves as a benchmark for technology companies. While the Nasdaq 100 has risen from 10,000 to 40,680.20 since 1999 (as of December 29, 2023), Deutsche Telekom has shown a less explosive but still solid performance. The focus on stable cash flows and dividends makes the stock less vulnerable to the extreme fluctuations that characterize tech indices like the Nasdaq. This positions it as an attractive choice for conservative investors looking for a balance of growth and stability.

The price development of the last few months suggests that the moderate upward trend will continue as long as no major macroeconomic disruptions occur. However, volatility could increase due to geopolitical tensions or regulatory intervention in Europe, requiring close monitoring of market conditions. At the same time, comparison with indices such as the DAX and Nasdaq 100 remains an important indicator to assess the relative attractiveness of the stock in the broader market, while historical data continues to provide valuable clues to potential future moves.

Let's look through the prism of macroeconomic conditions and internal strategies to decipher the factors influencing Deutsche Telekom AG. A central aspect that shapes the Group's financing costs and investment plans is the development of interest rates. The building interest rates for ten-year loans are currently 3.6% (as of November 5th, 2025), and over 80% of experts expect stable interest rates in the short term, supported by a robust internal market situation in the EU and an inflation rate close to the ECB's 2% target. In the medium term, however, 60% of experts predict an increase to around 4%, due to geopolitical tensions, new tariffs and high national debt, as analyzes show Interhyp show. For Deutsche Telekom, with net financial liabilities of 135.1 billion euros, a rise in interest rates could increase refinancing costs and limit the scope for investments in 5G and fiber optics.

Another factor that indirectly affects operating costs is raw material prices. Although the telecommunications industry is not directly raw material intensive, rising prices for metals such as copper and aluminum, which are required for network infrastructure and hardware, influence the cost structure. In 2024, copper prices have increased by about 10%, driven by global demand and supply chain bottlenecks. This development could put pressure on margins for large expansion projects, especially in regions such as the USA, where T-Mobile US is investing heavily in network expansions. At the same time, energy prices, which remain volatile despite stabilization in Europe, are driving up the operating costs for data centers and network infrastructure.

On the demand side, the momentum remains unbroken. Fixed network data traffic in Europe will reach 1,016 exabytes (+13% year-on-year) in 2024, while mobile data traffic will reach 141 exabytes (+16%), underlining the demand for fast broadband connections and 5G services. In Germany, the number of broadband connections grew to 15.1 million (+1.6%), and in the USA, T-Mobile's customer base rose to 125.9 million (+18%). These trends indicate continued revenue growth, particularly through fixed mobile convergence and streaming services. Ericsson's forecast that global mobile data traffic will double by 2030 reinforces expectations that demand will remain a key driver for Deutsche Telekom.

The management under the leadership of Timotheus Höttges, who has been CEO since 2014, is crucial to implementing these opportunities. The strategic focus on international expansion, especially through T-Mobile US, increased consolidated sales to 115.77 billion euros (+3.4%) in 2024, with the US subsidiary contributing the lion's share. Höttges' focus on cost efficiency is reflected in adjusted EBITDA AL of 43.02 billion euros (+6.2%), while investments in innovations such as AI and 5G are intended to secure technological leadership. The decision to pay a record dividend of 90 cents per share also shows management's confidence in sustainable profitability, even if this requires a balance in an environment of rising interest rates and raw material costs.

Management is faced with the challenge of balancing high levels of debt with strategic investments. The free cash flow AL of 5.2 billion euros in Q2 2024 (+48.5%) offers scope, but a possible increase in interest rates could put a strain on the financing costs for net financial liabilities. At the same time, management must respond to geopolitical risks that could affect commodity prices and interest rates, while continuing to use demand for digital services as a growth driver. Another focus is on optimizing operating costs in order to maintain margins despite external pressures.

The interactions between interest rate developments, raw material prices and demand paint a complex picture for the coming years. While stable interest rates offer short-term planning security, medium-term increases could influence the investment strategy. At the same time, management's ability to respond to rising costs and global uncertainties remains a crucial factor in further expanding Deutsche Telekom's strong market position and converting high demand into growth.

Let's embark on a journey through the stormy waters of global politics and trade tensions, which also pose challenges for Deutsche Telekom AG. At the center of the current uncertainties are the trade conflicts, in particular Donald Trump's announcement on May 23, 2025 that he would impose punitive tariffs of 50% on all goods from the EU from June 1, 2025. This is justified by a trade deficit of over USD 250 million annually and the accusation that the EU is exploiting the USA in trade. These measures could indirectly increase Deutsche Telekom's operating costs, particularly through rising prices for hardware and technology imports purchased through global supply chains, according to recent reports stock3.com clarify.

Trump's threats go beyond pure trade tariffs and also affect security policy aspects. Linking economic issues with the reliability of NATO - on the condition that European states increase their defense spending - creates additional pressure on Germany. As a country that relies heavily on the USA as a sales market and on alliance guarantees, Germany is confronted with uncertainties in the economy and foreign policy. For Deutsche Telekom, this could mean that strategic investments in the USA, for example by T-Mobile US, are subject to stricter political and economic conditions, which could affect its expansion plans.

Sanctions and trade restrictions further increase these risks. While the direct impact of punitive tariffs on the telecommunications industry appears limited, secondary effects such as an economic slowdown in Europe or rising costs for suppliers could weigh on margins. Supply chains for network equipment and technology, which often run through international markets, would be particularly affected. Analysts also warn of a possible relocation of production abroad in order to avoid tariffs, which could weaken Germany as a location in the long term, according to a detailed analysis justtrade.com shows.

Political stability remains another critical factor. In Europe, uncertainty about future US trade policy is causing increased volatility in the markets, which is affecting share prices and the willingness to invest. While domestically focused companies such as Deutsche Telekom are less directly affected by export tariffs, indirect effects such as a weakened economy or a decline in confidence in European markets could influence demand for telecommunications services. In the US, however, Trump's aggressive trade policies could tighten the playing field for T-Mobile US, especially if technology companies like Apple face additional import taxes and this puts a strain on the entire industry.

However, there are also potential opportunities in this environment. Deutsche Telekom could benefit from its strong domestic orientation in Europe, as it is less susceptible to direct trade conflicts compared to export-dependent industries such as the automotive industry. In addition, increased defense spending and infrastructure investments in Europe could indirectly increase demand for digital services and secure networks, which will benefit the group. Analysts see companies like Deutsche Telekom as a stable haven in uncertain times because their business models are less dependent on global trade shifts.

The coming months will show how political tensions and trade conflicts continue to develop and what specific effects they have on Deutsche Telekom's strategy. While the direct risks from punitive tariffs appear limited, the indirect consequences - from rising costs to geopolitical uncertainty - could influence long-term planning. At the same time, political instability offers scope for strategic adjustments in order to further consolidate the market position in Europe and the USA.

Let's take a deeper look into the operational foundations of Deutsche Telekom AG by analyzing the mechanisms behind order backlog, supply chains and capacities. There is positive momentum in the systems business, an important segment of the group: incoming orders rose by 28.3% to 957 million euros in Q2 2024, while sales in this area grew by 2.1% to 981 million euros. These figures indicate robust demand for IT and telecommunications solutions, particularly in the areas of digital infrastructure and cloud services. This compares to the overall decline in Germany's manufacturing order backlog, which fell 0.2% month-on-month and 6.2% year-on-year in June 2024, according to data from the Federal Statistical Office destatis.de show. However, Deutsche Telekom appears to be less affected by this general economic weakness as its focus is on services and digital solutions.

The scope of the order backlog in Deutsche Telekom's systems business remains an indicator of short-term sales security. While the average range in the manufacturing sector is 7.2 months, the group benefits from long-term contracts in the IT and network sectors, which enable more stable planning. There is a solid basis, particularly in the area of ​​public contracts and corporate solutions, even if business in Germany shrank by 0.2% in the fourth quarter of 2024 due to a decline in public tenders. Nevertheless, the order backlog remains a strong foundation to cushion short-term fluctuations in demand and support continued growth.

A critical point in the operational chain is supply bottlenecks, which continue to challenge the entire technology industry. Global supply chain disruptions, particularly in semiconductors and networking equipment, have impacted the availability of hardware for network expansion in recent years. For Deutsche Telekom, this means potential delays in the expansion of 5G and fiber optic networks, especially in Europe and the USA. In 2024, prices for copper and aluminum, essential for cables and infrastructure, have increased by about 10%, further increasing the cost of projects. Although the group has mitigated some risks through strategic partnerships and long-term supply contracts, dependence on international suppliers remains a latent problem that could delay the implementation of large projects.

Deutsche Telekom's production capacities relate less to traditional manufacturing and more to the ability to provide network infrastructure and digital services. The expansion of fiber optic connections in Germany is progressing at a rapid pace: 113,000 new connections were added in Q2 2024, significantly expanding the capacity for broadband services. In the US, T-Mobile US is advancing 5G coverage, which already covers 54% of the area, and is relying on Fixed Wireless Access (FWA) to drive growth in the fixed network. These expansions show that there is sufficient capacity to meet increasing demand - with data traffic growth of 13% in fixed networks and 16% in mobile networks in Europe - although external hardware bottlenecks may affect the speed of expansion.

Another aspect is the ability to adapt capacities to demand. With forecasts expecting global mobile data traffic to double by 2030, Deutsche Telekom is faced with the task of continually scaling its networks. Investments in Open RAN technologies, such as those used by competitors such as AT&T and Verizon in the US, could help increase flexibility and efficiency in deployment. At the same time, the focus on software solutions and cloud services remains an advantage as they rely less on physical supply chains and can be scaled more quickly to meet the needs of enterprise customers.

The challenges posed by delivery bottlenecks and the need to secure production capacities for network expansion will shape Deutsche Telekom's strategic planning in the coming years. While the current order backlog provides a solid basis, dependence on global suppliers remains a risk that must be minimized through diversification and technological innovation. The ability to respond to these dynamics will be crucial to further expand its strong market position and meet increasing demand for digital services.

Let's explore the driving forces behind Deutsche Telekom AG's ability to innovate, where technological breakthroughs and visionary developments shape the future. At the center of this dynamic is the expansion of 5G, a mobile communications standard that has been introduced across the board since 2020 and enables data rates in the gigabit range on frequencies such as 3.6 GHz and 2.1 GHz. This technology combines landline and mobile communications, supports the Internet of Things (IoT) and creates the basis for applications such as mobile virtual reality or online gaming that require low latency. In the USA, T-Mobile US already covers 54% of the area with 5G, while in Germany the continuous expansion forms the basis for further growth.

In addition to 5G, other groundbreaking technologies are coming into focus. Artificial intelligence (AI) is playing an increasingly central role, especially generative AI (GenAI), which can create content such as text, images or videos. Such solutions could revolutionize the customer experience, for example through personalized offers or automated support systems. Spatial computing is also gaining in importance, opening up new dimensions of user interaction through XR (Extended Reality) technologies. These advances, detailed in the current Deutsche Telekom’s 2024 annual report, position the group at the forefront of digital transformation.

A crucial building block for this innovative strength is research and development expenditure (R&D). In 2023, the group invested 25 million euros in R&D, a slight decrease compared to the 30 million euros in the previous year. In addition, 708 million euros flowed into capitalizable self-created intangible assets, mainly software, which underlines the importance of digital solutions. These investments focus on pioneering areas such as AI, 5G and cloud technologies to secure competitive advantages. Although the R&D effort appears moderate compared to tech giants, the targeted focus on application-related developments enables high efficiency in the implementation of new technologies.

Patents form another pillar of the innovation strategy. Deutsche Telekom holds an extensive portfolio of intellectual property, particularly in the areas of network technologies and digital services. These patents not only protect existing technologies such as 5G solutions, but also secure the basis for future developments, for example in the area of ​​IoT or low latency for real-time applications. By securing its innovations, the group can generate license income and at the same time make it more difficult for competitors to access key technologies, which strengthens its market position.

A central player in Deutsche Telekom's research landscape is T-Labs, founded in 2004 as a public-private partnership with the Technical University of Berlin. This institution focuses on future-oriented topics and cooperates with renowned universities such as the TU Dresden, the CODE University in Berlin, the Eötvös Loránd University in Budapest and the Ben-Gurion University in Israel. The collaboration extends to endowed professorships and international research collaborations, as shown on the website T Labs described. These networks promote knowledge transfer and accelerate the development of new technologies, which flow directly into the Group's business strategy.

Technological advances and the focus on R&D lay the foundation for Deutsche Telekom's long-term competitiveness. While 5G already serves as the backbone of the digital infrastructure, AI and spatial computing could open up new business areas, for example in the areas of smart cities or immersive entertainment. The strategic focus of R&D spending and protection through patents provide a solid basis for responding to the increasing demand for data-intensive applications. At the same time, the challenge remains to find the balance between investments in innovation and operational efficiency in order to continue to take the lead in global competition.

Let's look beyond the horizon and outline Deutsche Telekom AG's prospects for the next three to five years in order to identify the course for future growth. The forecasts for 2025 paint a picture of moderate but solid expansion: Sales are expected to increase slightly, adjusted EBITDA is expected to be around 45.0 billion euros (2024: 43.0 billion euros), and free cash flow is expected to climb to around 20.0 billion euros (2024: 19.2 billion euros), based on constant exchange rates (1 euro = 1.08 USD). These figures, as shown on Deutsche Telekom's investor relations page telekom.com shown, signal a stable financial basis for further investments and shareholder remuneration.

Network expansion remains a key growth driver, particularly in the areas of 5G and fiber optics. In Germany, the group plans to supply an additional 2.5 million households with fiber optic (FTTH) by 2025, while 5G network coverage is expected to reach 98% by the end of 2024. These infrastructure investments strengthen market leadership in the private and business customer sectors. In the USA, T-Mobile US is relying on continued customer growth and the realization of synergies from the Sprint takeover, which will further increase its share of sales. Europe is benefiting from increasing demand for mobile data, broadband and pay TV, supporting positive trends in traditional communications markets.

Another driver for growth is international expansion, particularly through T-Mobile US, which already had over 100 million contract customers in 2024. The strong market position in the US, combined with a focus on innovative services such as Fixed Wireless Access (FWA), is expected to result in a further 15-20% increase in subscriber base by 2028. At the same time, the systems business is driving forward the transformation with the aim of becoming the preferred provider for IT services. Efficiency programs and the expansion of growth topics such as cloud solutions could increase sales in this segment by 5-7% annually until 2027.

Shareholder compensation remains an attractive factor. A dividend of EUR 0.90 per share was distributed for 2024 (+16.9% compared to 2023), and a dividend of approximately EUR 2.00 per share is expected for 2025. In addition, share buybacks of up to 2 billion euros are planned by the end of 2025, which increases the attractiveness for investors. Analyst forecasts, as on squarevest.ag documented, see a price target of an average of 36.90 euros for 2025 (range: 31.00 to 43.00 euros) and even 56.57 euros by 2030, driven by an average annual price increase of 7.1% since 2015.

Taking different scenarios into account, different development paths can be identified. In the base scenario, moderate growth continues, supported by network expansion and international expansion. Annual sales growth of 3-4% is expected until 2028, with adjusted EBITDA that could rise to 50 billion euros if macroeconomic conditions remain stable. In the optimist scenario, with accelerated 5G deployment and successful monetization of AI and IoT services, revenue growth could reach 5-6% annually, with a share price exceeding the maximum target of 46.90 euros by 2026, as reported by J.P. Morgan predicts. In the pessimistic scenario, geopolitical tensions, rising interest rates (projected to rise to 4%) and supply chain problems could dampen growth to 1-2%, with a potential price decline to 31.00 euros by 2025.

Growth drivers such as network expansion, international presence and technological innovations offer Deutsche Telekom a solid basis for expansion in the coming years. Nevertheless, success depends on external factors such as interest rate policy, competitive pressure and global uncertainties, which have different effects in different scenarios. Strategic focus on digital transformation and customer growth will be critical to capitalize on opportunities and minimize risks as the Group further consolidates its position as a market leader.

Let's focus on the immediate future and draw a picture of Deutsche Telekom AG for the next 6 to 12 months in order to make the short-term developments and expectations tangible. The latest results for 2024 provide a solid starting point: sales rose to 115.8 billion euros (+3.4%), slightly above the forecast of 115.6 billion euros, while adjusted EBITDA was 43.0 billion euros (+6.2%), but below consensus. Net profit reached 9.4 billion euros, above expectations of 9.16 billion euros. For 2025, the group forecasts adjusted EBITDA of 44.9 billion euros, which is below the expert forecast of 46 billion euros, according to a recent analysis lynxbroker.de shows. These numbers suggest moderate, but not overly optimistic, growth in the coming year.

Deutsche Telekom is setting clear goals for the coming quarters to ensure operational strength. In the first quarter of 2025, sales growth of around 1-2% is targeted compared to Q1 2024, driven by continued customer growth in Germany and the USA. Adjusted EBITDA is expected to be around 11.0 billion euros in Q1 2025, an increase of around 2-3% compared to the same quarter last year, supported by cost efficiency and increasing service revenue. A similar trend is expected for the second quarter of 2025, with a focus on further expanding 5G coverage in Germany (target: 98% by the end of 2024) and additional fiber optic connections (approx. 600,000 new households in the first half of 2025). These goals reflect the strategic priority of using the network infrastructure as a basis for growth.

Another focus is on customer acquisition and monetization of digital services. In the USA, T-Mobile US plans to add around 2-2.5 million new contract customers in the first half of 2025, following strong growth of 1.3 million in Q2 2024. In Europe, a 3-4% increase in broadband and pay-TV connections is targeted compared to the previous year in order to continue the positive momentum in traditional markets. These quarterly targets are crucial in order to achieve the sales forecast for 2025 (slight increase compared to 2024) and to raise free cash flow to the targeted level of 20.0 billion euros.

Analysts' opinions paint a predominantly positive picture for short-term developments. Of 25 analysts, 23 recommend buying the stock, one recommends holding and one recommends selling. The average price target by 2026 is 38.76 euros, which means a price potential of 45.39% compared to the current price. The range goes from a lowest target of 33.33 euros (+25.02%) to a highest target of 44.10 euros (+65.42%), according to data shares.guide clarify. Despite a recent share price decline of 3.26% following the 2024 results, the majority of experts remain optimistic, supported by the strong market position and dividend policy (planned 2024 dividend: 0.90 euros, below the expectation of 1.00 euros).

The short-term challenges lie in achieving the EBITDA forecast for 2025, which is below expectations, as well as managing external risks such as rising interest rates or geopolitical tensions. The current price/earnings value of 17.5 at the annual high and an expected single-digit profit growth could also dampen the price momentum, with possible support at 33.22 euros, below which there is a risk of a stronger correction. Nevertheless, the quarterly targets and continued customer growth provide a solid basis to ensure short-term stability and lay the foundation for further growth.

The next 6 to 12 months will be crucial for Deutsche Telekom to achieve its goals and confirm the confidence of analysts. While operational progress in network expansion and customer acquisition provides positive momentum, the ability to respond to macroeconomic uncertainties remains a critical factor. The experts' predominantly positive assessment suggests that the group is well positioned to overcome short-term challenges and further consolidate its market position.

Let's navigate the uncertain waters that line Deutsche Telekom AG's path and illuminate the risks and potential that could shape its future. A central aspect is the market risks that arise from an intensely competitive environment. Declining profitability in voice and data services due to price reductions and strong price competition in new customer business are putting a strain on margins. In Germany in particular, the risk significance of the market environment was increased from “low” to “medium” due to tense competitive conditions and geopolitical challenges such as trade tariffs. In the USA, the market risk remains “very high” (≥ 1.0 billion euros), which indicates tough competition and dependence on a few capable suppliers, such as the current one Interim report Q1 2025 Deutsche Telekom shows.

Macroeconomic uncertainties compound these challenges. Economic downturns could limit purchasing power and access to capital markets, while high interest rates - with a possible rise to 4% - could dampen economic growth in the US and Europe in 2024. In Germany, a possible recession is seen as a risk that would weigh on business investment and household income. Geopolitical conflicts, such as in Ukraine or the Middle East, as well as currency fluctuations could also drive up energy and raw material prices, increasing Deutsche Telekom's operating costs and reducing profitability.

Regulatory hurdles represent a further barrier. The risk significance in this category is classified as “medium” (≥ 200 million euros), but remains unchanged. In the EU, stricter requirements, such as the planned Digital Network Act 2025, could entail additional requirements for data protection and network security, which increases investments and operating costs. Legal and antitrust proceedings are also a burden: a lawsuit by Vodafone Germany against Telekom Deutschland due to excessive fees for cable duct systems demands around 980 million euros plus interest for the period from January 2012 to December 2024. Such proceedings could cause financial and reputational damage, even if there are currently no risks threatening the company's existence.

Operational risks, particularly in the supply chain, are becoming increasingly important. The risk category “Purchasing and Suppliers” was raised from “medium” to “high” (≥ 500 million euros) due to geopolitical tensions, cyber attacks and the dependence on a few suppliers, especially for devices for T-Mobile US. Import tariffs from the new US government could further increase costs and be passed on to the company. In addition, “data protection and data security” remains a “very high” risk (≥ 1.0 billion euros), as violations of data protection regulations could result in high penalties and reputational damage.

Despite these risks, Deutsche Telekom has significant expansion potential. In the US, higher-value tariffs and the development of new customer segments could drive growth, particularly by T-Mobile US, which already had over 100 million postpaid customers in 2024. 5G technology opens up new business models, for example in the digitalization of industries or in the area of ​​smart cities, which opens up additional sources of revenue. In Europe, increasing demand for mobile data, broadband and pay-TV connections could increase sales by 3-4% annually, while in Germany the expansion of 2.5 million fiber optic connections by 2025 is strengthening the market position.

The balance between market risks and regulatory hurdles on the one hand and the expansion potential on the other will shape Deutsche Telekom's strategic direction in the coming years. While macroeconomic and geopolitical uncertainties make planning difficult, technological innovations and new customer segments offer opportunities to mitigate the risks. The ability to respond to these dynamic challenges will be critical to maintaining strong market positions and ensuring long-term growth.