Deutsche Telekom Faces Twin Headwinds: Labour Unrest and a Sinking Share Price

Ver.di escalates strikes at Deutsche Telekom before Q1 2026 earnings, as wage talks loom and share buybacks fail to halt a 13% stock decline.

The Bonn-based telecoms giant is navigating a tricky stretch, with industrial action escalating just days before first-quarter earnings are due. Ver.di, the German services union, has called for full-day warning strikes across twelve federal states on Thursday, piling pressure on management ahead of the third round of wage talks scheduled for May 11-12.

The timing could hardly be worse. The company reports its Q1 2026 numbers on May 13, and the market is looking for confirmation of the full-year outlook — a projected adjusted EBITDA of around €47.4 billion. Any prolonged disruption to domestic operations risks muddying that picture.

The Wage Dispute Heats Up

Ver.di is demanding a 6.6% pay rise over a twelve-month term, alongside an annual membership bonus of €660 and a €120 monthly increase for apprentices. The union has accused management of stalling, pointing to the billions spent on share buybacks and dividend payments. Deutsche Telekom recently hiked its dividend to €1.00 per share, an increase of roughly 11% year-on-year.

Last week’s initial protests drew more than 10,000 employees. This time, the walkouts will hit customer-facing operations directly — call centres, technical support, and installation appointments are all facing delays. The fibre rollout, a key strategic priority, is also being slowed.

Buybacks Fail to Stem the Slide

The share price has been under persistent pressure, shedding around 13% over the past twelve months and 10% in the last month alone. At €27.68, the stock is trading well below its 50-day moving average of roughly €31.

Management has been trying to counter the weakness with aggressive share repurchases. In the final week of April alone, the company bought back 1.3 million of its own shares, spending over €36 million. Since the programme began at the start of April, nearly 5.8 million shares have been retired, boosting earnings per share for remaining holders.

Yet the market has barely blinked. The relative strength index sits at nearly 72, suggesting the stock is technically overbought despite the broader downtrend — an unusual combination that points to short-term volatility.

US Operations Under the Microscope

While the domestic business struggles with labour strife, the real earnings engine remains T-Mobile US. The American subsidiary recently raised its own full-year guidance, and its profits continue to fund the parent company’s heavy European investment programme.

But analysts are watching more closely. DZ Bank has trimmed its fair value estimate for T-Mobile US to $250, citing a slight uptick in customer churn in North America. Despite intensifying competition, the bank has maintained its buy recommendation.

Fibre Expansion Continues

On the ground, the network build-out presses ahead. In Upper Bavaria, a new regional infrastructure project kicked off on Thursday, with the company aiming to connect hundreds of households to high-speed fibre by 2028. The 22-kilometre extension is part of a broader push to close the digital divide in rural Germany.

What’s at Stake

If the third round of wage negotiations fails to produce a breakthrough, the labour conflict could feature as a risk factor in the upcoming earnings release. A swift compromise would remove a significant source of uncertainty for the domestic business ahead of the numbers.

For now, investors are left watching two clocks: the one counting down to the May 13 earnings report, and the one ticking on the bargaining table.