Deutsche Telekom Cuts 5G Energy Use by 65% as Share Buyback Support Disappears

Deutsche Telekom has achieved a 65% reduction in energy consumption across its 5G core network, yet the stock is trading close to its 52-week low as the second tranche of its buyback programme expires without a clear timeline for renewal.

The energy savings come from the “Most Energy Efficient Core” (MeeC) project, run jointly with partner Mavenir, who received Telekom’s “Partner of the Year Award” on 26 June. Artificial intelligence-powered traffic analysis and automated load optimisation have slashed power use in core network functions without degrading performance. The improvement is timely: data traffic is growing roughly 30% annually, fuelled by streaming and AI applications.

At the same time, Telekom’s equity has been sliding. The stock closed at €26.31 on Friday, just 2.33% above its 52-week trough and roughly 23% below the 12-month high of €34.35. Shares have lost nearly 15% over the past twelve months and are down 5.6% year to date. The relative strength index stands at 34, indicating technically oversold conditions, but no clear catalyst has emerged to spark a reversal.

The immediate headwind is the end of the second €550 million share buyback tranche on 30 June. Since April, Telekom has repurchased roughly 17 million of its own shares, including 1.65 million in the past week alone. The overall buyback programme for 2026 is earmarked for up to €2 billion, but the start date of the third tranche remains undisclosed. In the absence of a steady buyer, the stock may come under further short-term pressure.

Should investors sell immediately? Or is it worth buying Deutsche Telekom?

Operationally, the company presents a much stronger picture. First-quarter 2026 revenue rose organically by 4.7% to €29.90 billion, and adjusted EBITDA AL increased 7.5%. Management responded by raising its full-year targets: adjusted EBITDA AL of around €47.5 billion and free cash flow AL exceeding €19.8 billion. Fitch Ratings recently upgraded the credit rating from BBB+ to A-, citing Telekom’s strong market position and robust cash generation from US subsidiary T-Mobile US. The agency expects leverage to remain close to 2.0 times EBITDA.

Telekom also continues to expand its network footprint. Its 5G coverage now reaches 89.1% of Germany’s surface area, a lead of roughly 13 percentage points over rivals Vodafone and Telefónica. The latest upgrades, reported over the weekend, include new sites and capacity expansions in Herschbroich, the Soest district, Oranienbaum-Wörlitz, and Hornburg. Emergency technologies such as Advanced Mobile Location and Cell Broadcast have also been enhanced. On 30 June, Telekom will retire its MMS service in favour of the modern RCS chat standard; the move is not expected to have a material financial impact.

Fibre investment is another long-term bet. Telekom plans to spend a total of €30 billion on fibre-to-the-home by 2030, with an additional €800 million earmarked for the next three years. The 2026 target is to connect 2.5 million new households. Importantly, the focus is shifting from how many premises are passed to how many customers actually switch to fibre – a key take-up metric that will determine returns.

Deutsche Telekom at a turning point? This analysis reveals what investors need to know now.

Yet the market remains fixated on two uncertainties. First, rising bond yields and higher interest rate expectations are weighing on capital-intensive business models, and Telekom’s capital expenditure profile makes it particularly vulnerable. The stock’s forward price-to-earnings ratio for 2026 stands at 13.1, dropping to 11.7 for 2027, well below the 10-year average of 17.8. Second, persistent reports about a potential full merger with T-Mobile US have created a cloud of uncertainty; the company has neither confirmed nor denied the speculation. Until clarity emerges, that overhang is likely to keep sentiment subdued.

A nationwide network measurement by the German Federal Network Agency is under way and runs until 1 July, with results expected in autumn. But the next scheduled event that could shift the narrative is the release of second-quarter earnings on 6 August 2026. Until then, Telekom’s strong operational strides – from energy efficiency to credit upgrades – are competing with an absent buyback support and a market that is reluctant to pay up.

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