Blog: You, us, everyone

Deutsche Telekom AG (DTE) is one of the world’s leading integrated telecommunications companies, headquartered in Bonn, Germany. With roots dating back to the privatization of the former state monopoly in 1996, Deutsche Telekom today serves over 184 million mobile and fixed‑network customers across Europe and the United States. The group’s core businesses include German domestic operations (Magenta EINS bundles, broadband, IPTV), the U.S. wireless operator T‑Mobile US (controlled with ~43% economic interest), and a pan‑European wholesale and systems integration unit (T‑Systems & Group Development). In 2023 the group reported revenues of €120 billion and Adjusted EBITDA of €44 billion, driven by continued 5G and fiber roll‑out, converged product bundles, and strong T‑Mobile US performance.

Cover & Executive Summary

• Title: Deutsche Telekom AG Investor Overview
• Subtitle: “Integrated telecom champion with growth in Germany & U.S.”
• Highlights:
• €120 billion revenue (2023) • €44 billion Adj. EBITDA
• 184 million customers • T‑Mobile US minority stake (~43%)
• Leading fiber & 5G rollout in core markets

Investment Thesis

• Resilient core: stable German domestic cash flows from converged bundles
• High‑growth U.S. exposure: T‑Mobile US driving above‑market service revenues
• Capital-light wholesale: T‑Systems & European wholesale for margin diversification
• Attractive valuation: discount to European telco peers, supportive dividend yield (~3.5%)

Market Opportunity

• European telecom services: flat‐to‐modest growth, ARPU expansion via bundles
• U.S. wireless market: > $200 billion TAM, 5G densification, low‑to‑mid‑teens service revenue growth
• Enterprise services: digital transformation, cloud adoption, security services
• Emerging adjacencies: IoT, edge computing, private networks

Business Model & Segments

• Germany (45% rev): fixed broadband, mobile, TV & content bundles (Magenta EINS)
• T‑Mobile US (32% rev): leading 5G network, postpaid subscriptions, prepaid & wholesale
• Europe (15% rev): operations in Netherlands, Poland, Czechia, Greece, Hungary, Slovakia
• Systems & Wholesale (8% rev): T‑Systems digital services, European wholesale

Competitive Positioning

• Market #1 in Germany & U.S.: #1 or #2 share in core geographies
• Integrated offering: fixed‑mobile convergence driving ARPU and stickiness
• Network leadership: top‐ranked 5G in U.S. and Germany, aggressive fiber targets
• Scale & synergy: shared R&D, procurement, and technology platforms

Financial Performance

• 2019–2023 trends:
• Revenue CAGR ~2% group, ~6% T‑Mobile US
• Adj. EBITDA margin ~37%, stable capex intensity ~20% of sales
• Free cash flow ~€10 billion in 2023
• Dividend & buybacks: €0.70/sh dividend, opportunistic tender offers

Growth Strategy

• Fiber acceleration: 10 million German homes pass by 2025; CPE up‑sell
• 5G monetization: private networks for industry, IoT, edge‑compute services
• T‑Mobile US synergy play: infrastructure sharing, MVNO deals, postpaid growth
• Enterprise focus: expand cloud, security, and managed services via T‑Systems

Risks & Mitigations

• Regulatory scrutiny: EU roaming & net neutrality → proactive compliance & lobbying
• Capital intensity: disciplined capex allocation, partnerships, co‑build fiber models
• Competitive pressure: bundling responses → enhanced seamless UX and loyalty programs
• U.S. consolidation: watch for Sprint integration hangover; focus on churn control

ESG & Sustainability

• Climate target: net‑zero greenhouse gases by 2040, 100% renewable electricity by 2025
• Digital inclusion: rural broadband initiatives, subsidized connectivity programs
• Governance: diverse board, robust data‑privacy and cyber‑security frameworks
• Social impact: digital skills training (T‑Mobile US ‘Tech for Good’), community programs

Recommendation & Next Steps

• Recommended action: Buy/Hold with target price of €37.- based on sum‑of‑parts + DCF
• Key catalysts: German fiber milestone, T‑Mobile US cadence, enterprise services ramp
• Timeline: Q2 results, AGM updates on capital allocation, mid‑year investor day
• Due diligence: management calls, network visit, regulatory outlook assessment