Deutsche Telekom Caught Between Record US Growth and Escalating German Labour Strife

T-Mobile US smashes Q1 forecasts and raises guidance, while Deutsche Telekom faces massive strikes at home over wage disputes and fiber investments.

The Deutsche Telekom group is navigating two starkly different realities in the spring of 2026. Across the Atlantic, its US subsidiary T-Mobile US is firing on all cylinders, smashing earnings forecasts and lifting its full-year guidance. At home, the company faces its most aggressive labour action in years, with more than 7,500 employees walking off the job in a dispute that shows no signs of cooling.

T-Mobile US delivered a standout first quarter. Revenue climbed 11 percent to just over $23 billion, while adjusted operating profit jumped to $9.2 billion. Earnings per share came in at $2.27, comfortably ahead of Wall Street expectations. The strong performance prompted management to raise its annual outlook, now projecting up to 1.05 million new postpaid customers for the year. Deutsche Telekom, which holds just over half of T-Mobile’s shares — a stake worth roughly €90 billion — saw its own stock gain more than 2 percent on the Xetra exchange, closing at €27.32.

Yet the positive momentum from the US has done little to shield the Bonn-based group from the turmoil brewing in its domestic operations. The second round of wage negotiations on April 27 collapsed after the company once again declined to table an offer, citing competitive pressures and the need to fund heavy investments, particularly in fibre-optic expansion. That failure triggered the largest wave of warning strikes in this bargaining cycle.

The walkouts began on April 28 in northern and northeastern Germany, then spread to North Rhine-Westphalia, Saxony-Anhalt, Saxony and Thuringia the following day. By April 30, the Ver.di union had extended the action to Hesse, Rhineland-Palatinate, the Saarland, Baden-Württemberg and Bavaria. Ver.di’s strike coordinator Pascal Röckert warned of deteriorating customer service, delays in technical support and cancelled appointments for fibre installations.

At the heart of the dispute is Ver.di’s demand for a 6.6 percent pay increase over 12 months for roughly 60,000 employees covered by the collective agreement. The union is also seeking an annual membership bonus of €660 and an additional €120 per month for apprentices and dual-study students. The union has seized on the company’s planned €2 billion share buyback programme for 2026 as a political lever, arguing that if the group has cash to return to shareholders, it has room to raise wages. The company rejects that logic, pointing instead to efficiency pressures and the scale of its investment commitments.

Deutsche Telekom is ploughing €30 billion into German fibre infrastructure through 2030, with a target of connecting 2.5 million new households this year alone. The group posted adjusted EBITDA of €44.2 billion in 2025 and is targeting roughly €47.4 billion for 2026.

The stock, which started the year above €34, has shed around 22 percent of its value and recently traded at €26.76, a decline of 0.41 percent. The €26 support level is now in focus. Despite the pullback, analysts remain broadly bullish. The average price target among 68 analysts stands at €40.10. Barclays rates the stock “Overweight” with a target of €39.50, while Deutsche Bank Research maintains a “Buy” recommendation and a €42 target, citing the strength of T-Mobile US.

Two more negotiating rounds are scheduled: May 11-12 and May 26-27. The third round coincides with the release of Deutsche Telekom’s first-quarter results on May 13, creating a potential flashpoint where financial performance and labour dynamics collide. How management handles the messaging around both events could prove more consequential for the share price than the numbers themselves.