Deutsche Telekom: Phasing Out MMS, Breaking World Cup Records, Yet the Stock Keeps Falling

Operational strength from World Cup records, raised EBITDA outlook, and a labor deal contrast with macro headwinds and merger speculation, sending shares 11% lower YTD.

Deutsche Telekom is delivering on multiple fronts — record World Cup viewership, raised full-year guidance, a near-completed share buyback tranche, and a labor deal that promises cost certainty through 2028. But the market is having none of it. The stock has shed roughly 11% year to date and now trades at €26.98, a stone's throw from its 52-week low of €25.99.

MagentaTV opened the World Cup with unprecedented numbers. In the first seven days, 36 million people tuned in, with the France-Senegal match peaking at 6.5 million viewers — a tournament record for the platform. Pay-TV subscriptions more than doubled compared to the 2024 European Championship. Yet the equity market yawned. “The historically best opening week for our division,” said TV chief Arnim Butzen, but the stock still lost over 4% in a single week.

The headwinds are largely macro. The Federal Reserve has paused its rate-cutting cycle, and Chairman Kevin Warsh warned on Wednesday of persistently high inflation. That clouds the outlook for rate-sensitive stocks, and the European telecom sector is feeling the pain alongside broader profit-taking. Deutsche Telekom itself faces additional headwinds: speculation about a full merger with T-Mobile US has hung over the stock since Bloomberg reported on it in late April. The German government and KfW together hold roughly 28% of the shares, making regulatory and political approval uncertain, while U.S. antitrust scrutiny looms.

Against that backdrop, the company's ongoing share buyback is a rare source of demand. The second tranche, capped at €550 million, ends in late June. Between 8 and 12 June, Telekom repurchased about 1.6 million shares at an average of €27.90, bringing the total since the program started on 2 April to 15.3 million shares. The broader 2026 buyback is worth up to €2 billion, most of which will be cancelled to boost earnings per share.

A more immediate catalyst comes on 19 June, when the ver.di trade union commission votes on the negotiated wage package. The deal, reached in late May, runs for 33 months until the end of 2028 and covers roughly 60,000 employees. Monthly wages will rise in two steps: to €340 in August 2026 and to €480 in July 2027. If approved, Deutsche Telekom gains planning security on a major cost item, with no compulsory redundancies for the entire period.

The operational foundation remains solid. In the first quarter, revenue grew organically 4.7% to €29.9 billion, adjusted EBITDA AL rose 7.5% to €11.5 billion, and free cash flow AL reached €5.7 billion. Management subsequently raised its 2026 outlook: adjusted EBITDA AL of around €47.5 billion and free cash flow AL above €19.8 billion. The dividend for 2025 was increased 11% to €1.00 per share.

The technical picture underscores the strain. The stock's 14-day relative strength index stands at 34.8, close to the oversold threshold of 30. The 50-day moving average has been breached at €28.32, and the price is 21.5% below February's 52-week high of €34.35. On the positive side, Telekom also ended MMS service on 30 June — a planned technological cleanup with no market impact — and has teamed up with Starlink since March to close European dead zones.

Investors now await second-quarter results on 6 August, when the strength of the German business — boosted by World Cup subscriptions — must translate into hard earnings. Until then, the tug-of-war between solid fundamentals and a stubbornly skeptical market looks set to continue.