Deutsche Telekom: Labour Peace and a Drone Defence Play Can't Mask a Bruised Chart

Deutsche Telekom shares trade below key moving averages despite a €2bn buyback and a new AI-driven drone detection partnership with Hensoldt and DFS.

The shares of Deutsche Telekom continue to drift in the doldrums, trading at €27.66 on Wednesday as a 1% decline extended the stock's run of losses. Despite a €2bn buyback programme and a freshly minted pact covering 60,000 employees, the equity has struggled to shake off a bearish technical setup. At the current level, the price sits a full 19.5% below February's 52-week high of €34.35.

Chartists have plenty to fret about. The stock has been locked in a downtrend since May 28, shedding nearly 5% in that stretch. It now trades beneath both its 50-day moving average of €28.49 and its 200-day moving average of €28.98 — a textbook bearish crossover. The 38-day line was breached to the downside on June 15, and the relative strength index sits at 40.9, not yet in oversold territory but heading in the wrong direction.

The buyback machine has been humming, but it has failed to arrest the slide. Between June 8 and June 12, the group scooped up roughly 1.6 million shares at an average price of €27.90, spending about €45m for the week. Since the programme's launch on April 2, a total of 15.3 million shares have been retired. The current second tranche, capped at €550m, runs until the end of June, while the overarching authorisation for 2026 stands at up to €2bn. Most of these repurchased shares are slated for cancellation, which mathematically boosts earnings per share. So far, though, the market remains unimpressed.

One source of uncertainty could be resolved as early as this week. On June 19, ver.di's tariff commission votes on the pay deal struck between the union and Telekom at the end of May. The agreement runs for 33 months, through to the end of 2028, and covers roughly 60,000 employees. Monthly additional pay rises in two steps: to €340 in August 2026 and to €480 in July 2027. Wage tables themselves will increase by 2.4% in June 2028. If the commission gives its nod, the company locks in labour cost visibility until the end of the decade. That should remove a nagging overhang — but whether it jolts the share price depends on broader market sentiment.

Meanwhile, Telekom has quietly planted a flag in a fast-growing security niche. Together with defence electronics group Hensoldt and the German air navigation service (DFS), it is building a nationwide drone detection network. The system uses an artificial-intelligence platform to fuse sensor data from mobile phone masts, airports, power plants and Bundeswehr sites into a real-time aerial picture. The platform is designed to be open to additional manufacturers. Hensoldt brings sensor expertise; DFS coordinates airspace monitoring and network roll-out; Telekom acts as the infrastructure enabler, handling data flows, platform integration and scaling.

For Telekom, the deal is less about immediate revenue and more about strategic positioning. Once established as the platform operator for critical security infrastructure, the group gains an edge in future public tenders for defence and security contracts. But the path is strewn with the usual hazards of state-led projects: jurisdictional disputes, lengthy approval processes and slow procurement cycles. The potential is real; the timeline remains hazy. Unsurprisingly, the announcement failed to stir the stock, which barely budged from the €27.92 level where it was trading when the news broke.

None of this changes the underlying operational strength. In the first quarter of 2026, revenue grew organically by 4.7% to €29.9bn, while adjusted EBITDA AL rose 7.5% to €11.5bn. Management guides for full-year adjusted EBITDA AL of around €47.5bn and adjusted earnings per share of €2.20. The tariff vote on Friday is the next concrete catalyst. A positive outcome would remove one layer of uncertainty — but with the stock trapped below its key moving averages, it will take more than labour peace to reverse the technical damage.