Deutsche Telekom (ETR:DTE) executives struck an upbeat tone on the company’s full-year 2025 results call, citing a strong fourth quarter, growing shareholder returns, and progress toward its Capital Markets Day (CMD) ambitions, while acknowledging areas where the group is currently behind target—most notably service revenue trends outside the U.S.
2025 results and group outlook for 2026
CEO Tim Höttges said the group delivered 3.8% organic service revenue growth and 4.7% EBITDA growth in 2025, with free cash flow of EUR 19.5 billion and adjusted earnings of EUR 2 per share. The company also returned EUR 6.4 billion to shareholders last year and announced a record dividend of EUR 1 for 2025 alongside another EUR 2 billion share buyback.
Höttges said the group’s midterm review showed it was “on good track” for most CMD targets, but flagged two areas of underperformance: DTX service revenues (which he linked to slower growth in Germany) and indirect costs as a percentage of service revenues. He said the company was “doubling down on efficiencies” to mitigate the gap.
Germany: fiber scale-up and mixed service revenue trends
Germany segment board member Rodrigo Diehl said the unit’s headline financials “are back on track” after a weaker third quarter. Organic revenues rose 2.8% in the fourth quarter, supported by service revenue growth and “strong revenues with our fiber joint ventures” due mainly to phasing; he noted these JV revenues are “near zero margin.” Total service revenues in Germany grew 1.5% year-over-year in Q4, and organic EBITDA rose 2.5%.
Mobile performance remained a bright spot, with Diehl highlighting 282,000 net additions in Q4 2025, higher than the year-ago quarter. He said the company remains comfortable with its CMD guidance of 2%-2.5% mobile service revenue growth over 2023-2027, having delivered growth at the top end of that range in the first two years.
In fixed-line, Diehl said broadband net adds stabilized in Q4, turning “slightly positive,” which he attributed to segmentation improvements, a focus on acquisition and retention operations, and accelerating fiber connections. This came despite a front-book price increase in October and a reduction of promotional months from six to three earlier in 2025.
On fiber, Diehl called Q4 2025 the company’s “best ever quarter” for fiber customer additions, citing 164,000 fiber customers added and fiber penetration reaching 16.4%. Deutsche Telekom ended 2025 with 12.6 million fiber homes passed in Germany after expanding the footprint by 2.5 million, and Diehl said the company remains on track for around 17.5 million homes passed by 2027. Fiber customers rose by almost 600,000 in 2025 as the business works toward a 1 million run rate in 2027.
Diehl also addressed the low take-up in multi-dwelling units (MDUs), outlining a strategic shift toward more single-dwelling units in less dense and rural areas and a new “full build-out” approach in MDUs that connects entire buildings upon first entry. He also described expanded sales execution through stores and technicians generating leads.
While ARPA momentum was described as positive, Diehl said retail broadband revenue growth slowed to 1.6% in Q4 due to volume losses. He described recent pricing moves—including reducing promotions, front-book increases, and a back-book price increase of EUR 2 per month for some older cohorts—as “long due,” but acknowledged that meeting the CMD fixed service revenue growth target of 3%-4% looks “challenging” from today’s perspective.
In Q&A, Diehl said Germany expects “similar” total service revenue growth in 2026 as in 2025, and cautioned it was too early to fully assess the impact of recent broadband base price increases, though he described early results as “encouraging.” He also said a public-sector budget was approved late last year and that order entry momentum is improving, but revenue effects may be more visible in Q4 2026 and into 2027.
Europe: continued momentum and 32 consecutive quarters of EBITDA growth
Board member for Europe Dominique Leroy said the European segment delivered strong performance in 2025, including 3.9% service revenue growth driven by both B2C and B2B. She highlighted 1.1 million fiber homes added in 2025, bringing the FTTH footprint to 11.3 million homes, with average utilization of 36%. 5G coverage reached 92% by year-end 2025.
Leroy said the segment posted its 32nd consecutive quarter of organic EBITDA growth, with Q4 organic revenue up 3.5% and service revenue up 4.6%, helped by B2B IT service revenues. Full-year EBITDA grew 5.4%, though she noted a slight sequential slowdown in Q4 EBITDA growth due to the phase-out of previous price increases and the phasing of one-timers.
For 2026, Leroy said priorities include adding more than 1 million fiber homes while keeping utilization high, pushing 5G coverage to 95%, and expanding beyond core offerings. She also outlined digital targets including more than 30% e-sales share and up to 50% of mobile prolongations and tariff changes through digital channels, alongside efforts to reduce the IDC-to-service revenue ratio. The segment expects service revenue growth and EBITDA rising to EUR 4.8 billion in 2026, with “underlying EBITDA growth north of the 3% range,” adjusted for the end of the Hungarian telco tax tailwind.
T-Systems: EBITDA growth, AI revenue ambitions, and Industrial AI Cloud
T-Systems CEO Ferri Abolhassan said the unit delivered 3% organic revenue growth and 14.4% EBITDA growth in 2025, supported by efficiency gains, and achieved “a positive and growing cash contribution.” Order inflow rose 5%, and customer satisfaction reached 99% TRIM.
For 2026, Abolhassan guided for “more modest” EBITDA growth as the unit invests in future growth areas including Sovereign Cloud and artificial intelligence. He said T-Systems has more than 1,500 AI experts and around 1,500 AI and data projects underway or completed, with AI-related revenues “ahead of plan” and a target of EUR 200 million in 2026. The business also aims to grow T Cloud public revenues by about 20% to over EUR 200 million and to generate more than EUR 100 million in revenues from verticals including public, health, and a newly established defense vertical.
Abolhassan also highlighted the launch of the Industrial AI Cloud—described as Europe’s first and largest—which he said increases Germany’s current AI compute power by 15% and was built with NVIDIA and partners in less than six months. He said initial demand from “signature clients” is strong and that the company would expand capacity if market demand warrants it.
Capital allocation, balance sheet, and key Q&A themes
Höttges said Deutsche Telekom increased its stake in T-Mobile to 52.8% and described expected surplus through 2027 as “fundamentally intact,” adding that 2026 surplus is effectively committed to ongoing DT share buybacks and further T-Mobile stake increases after the company decided not to sell T-Mobile shares alongside its ongoing buyback.
In Q&A, management described its decision not to participate directly in T-Mobile’s buyback by emphasizing a balance between strategic positioning and financial accretion, adding that increasing the U.S. stake can provide flexibility for future actions. CFO Christian Illek said 2025 financials were impacted by a weaker U.S. dollar, and he pointed to 2024 impairment reversals as a driver behind a 14% net profit decline in 2025 comparisons.
Executives also discussed AI and satellite connectivity. Management framed satellite broadband as largely niche in Germany given high 5G coverage, while describing direct-to-device and IoT as potential complementary uses. On AI, Höttges said the company plans to host an AI event to provide more detail on project impact and productivity, noting the group now has around 500 AI projects and intends to enable employees with OpenAI ChatGPT Enterprise.
About Deutsche Telekom (ETR:DTE)
Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services. The company operates through Germany, United States, Europe, Systems Solutions, Group Development, and Group Headquarters and Group Services segments. It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers. In addition, the company provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators.
