Deutsche Telekom's US Growth Engine Fires as Domestic Headwinds Gather

The operator of Europe’s largest telecommunications network is navigating a rare split: its American subsidiary is powering ahead while German labour unrest and a brewing regulatory scrap over copper threaten to slow the home front. Deutsche Telekom shares closed Tuesday at €29.27, up nearly 4% over the past week, but still roughly 14% below last year’s high of €34.25.

T-Mobile US, in which Deutsche Telekom now holds almost 54% after passive accretion from buybacks, continues to deliver the kind of momentum that keeps the parent’s strategic options open. Service revenue jumped 11.3% in the first quarter, adjusted EBITDA rose 11.9%, and the addition of more than 500,000 new broadband subscribers prompted management to lift its customer outlook. Chief executive Tim Höttges responded by nudging the group’s full-year guidance higher: adjusted EBITDA AL should now come in around €47.5bn, with free cash flow exceeding €19.8bn.

Goldman Sachs, which keeps Deutsche Telekom on its conviction list, trimmed its price target from €42 to €40 after the first-quarter numbers — but reaffirmed its buy recommendation. Analyst Andrew Lee argued the quarterly report clarified the group’s strategic direction and that feared competitive pressure from Verizon in the US has not materialised. The broader analyst community is even more bullish on the upside, with a consensus target of €38.56 and buy ratings from JP Morgan, UBS and Deutsche Bank.

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

A hefty share buyback programme underpins the stock. The company spent around €45m last week alone repurchasing its own shares, with purchases of up to €550m planned through June and a full-year envelope of €2bn. Insider confidence was also on display when board member Petra Steffi Kreusel bought shares at €27.86 under an employee programme in mid-May.

On the domestic front, however, two conflicts are running in parallel. The tariff stand-off with the Verdi union intensified on 19 and 20 May, when warning strikes disrupted customer service and fibre rollouts across North Rhine-Westphalia, Hesse, Rhineland-Palatinate and the Saarland. Around 650 staff in the southwest alone walked out. Verdi is demanding a 6.6% wage increase over twelve months plus a member bonus of €660 for the roughly 60,000 employees covered. The fourth round of negotiations is scheduled for 26–27 May, and a failure could trigger broader industrial action with tangible cost implications for the second half.

At the same time, a deeper strategic debate is brewing over the future of copper. Vodafone’s German chief used the Anga Com trade fair in Cologne to push for a DSL switch-off as early as 2028, arguing it would accelerate the EU’s full network migration deadline of 2035. Deutsche Telekom is pushing back hard, insisting no such move is viable until fibre is universally available. Digital minister Karsten Wildberger (CDU) backed the Telekom’s caution, warning against “implementing with a crowbar”. The numbers give the incumbent ammunition: roughly 21.8m households still rely on DSL, versus only 7.8m fibre connections and 8.5m cable lines. Shutting copper down within four years would leave millions without alternatives.

Chart-wise, the stock is treading water just above its 200-day moving average of €29.22 — a level that has provided support but not yet sparked a sustained breakout. Investors are now eyeing the second-quarter results, due on 6 August 2026, as the next fundamental catalyst. For the full year, analysts expect earnings per share of €2.21.

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