Deutsche Telekom Presses Ahead with €2bn Buyback as ver.di Deal Secures Cost Certainty Until 2028

Deutsche Telekom packed two major corporate events into one week, pushing its share buyback programme further along while simultaneously locking in a wage agreement that covers 60,000 German employees. The stock ended Friday at €28.76, down 1.03% on the day and off 1.71% over seven days — a muted reaction that suggests investors are still weighing the competing pressures on the group’s cash flows.

Under the three-year wage deal struck with the ver.di union, full-time staff will see a three-stage increase in their “additional monthly entitlement”, rising from the current €190 to €340 in August 2026 and then to €480 in July 2027. An across-the-board 2.4% lift to the salary table follows in June 2028. Combined, the package lifts the annual base salary of roughly €55,000 by 8.5% over the life of the contract. Apprentices and dual-education students receive staggered increases of 4.1%, 3.3% and 2.4%, adding between €132 and €165 per month depending on the programme. The agreement also extends protection against operational redundancies to the DT SE and PVG subsidiaries and, for the first time, introduces a union-specific loyalty bonus: €440 for ver.di members as of 28 May 2026 and a further €220 for those still organised at the end of 2028. The tariff commission has already approved the terms, and a member ballot is open until mid-June, with a final decision expected on 19 June.

Against that backdrop of rising staff costs, the group continued its share buyback programme without pause. On 29 May it repurchased 311,881 shares at a volume-weighted average price of €28.9097, bringing the week’s total to 1,516,010 shares for roughly €44.26 million, or an average of €29.20 per share. The broader programme allows for buybacks of up to €2 billion in 2026, with the vast majority of acquired shares slated for cancellation — a move that concentrates future earnings over a smaller float. A smaller tranche is reserved for employee incentive plans.

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Both the wage settlement and the buyback are underpinned by a solid operating performance in the first quarter. Revenue rose 4.7% on an organic basis to €29.9 billion, while adjusted EBITDA AL climbed 7.5% to €11.5 billion. Free cash flow AL edged up to €5.7 billion, supporting management’s view that the dividend and buyback can coexist. For the full year, the company now expects adjusted EBITDA AL of around €47.5 billion and free cash flow AL of more than €19.8 billion — a modest guidance lift that signals the core business is generating enough firepower to absorb both the wage rises and the capital return programme.

Alongside the financial levers, Telekom is stepping up its content strategy through MagentaTV. The platform will broadcast all 104 matches of the upcoming FIFA World Cup, with 44 games exclusive to Germany. A tie-up with singer Helene Fischer for the official campaign song, announced on 29 May, is part of a broader push to position MagentaTV as a media brand rather than a simple telecom add-on. Live games, highlights, analysis and interviews round out the offering.

The next hard check on the group’s trajectory comes on 6 August, when second-quarter figures will test whether free cash flow and operating trends remain on the path that allowed the company to strike a balanced deal with labour while continuing to return capital to shareholders. If the numbers hold, the buyback narrative gains extra weight; any slippage could renew the caution that kept the stock below €29 this week.

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