Deutsche Telekom's Dual Engine: Satellite Ventures and Share Buybacks

Deutsche Telekom partners with SpaceX's Starlink for business backup internet, starts a €550M share buyback, and raises its dividend. Q1 2026 results due May 13th.

Deutsche Telekom is launching a new satellite internet service for businesses, leveraging SpaceX's Starlink network to provide backup connectivity. The offering, a turnkey solution for companies needing redundancy when fiber or mobile networks fail, promises download speeds up to 400 Mbit/s with latency between 20 and 60 milliseconds. The telecom giant handles installation, network integration, and billing. A pilot project with an eastern German brewery chain is currently testing the service's reliability for logistics and point-of-sale systems.

Simultaneously, the company is executing a significant capital return program. The second tranche of its 2026 share buyback initiative began on April 2nd and is set to run until the end of June, aiming to repurchase shares worth up to €550 million. This follows a first tranche from January through March, which saw roughly 15.6 million shares bought back for approximately €471 million. The full-year program is capped at €2 billion, mirroring last year's level. These repurchases are designed to offset dilution from employee share programs and provide consistent market support on every trading day through June.

The stock recently navigated the technical pressure of its dividend adjustment. Shareholders approved a payout of €1.00 per share for 2025 at the Annual General Meeting on April 1st, marking an 11% increase year-over-year. While the ex-dividend date pushed the share price lower, briefly dipping below the 200-day moving average, it has since recovered. The equity currently trades around €31.23, nearly five percent above that key technical level.

Fourth-quarter 2025 results presented a mixed picture. Revenue grew approximately 2.5% to €31.72 billion, but earnings per share (EPS) fell sharply from €0.85 to €0.44. Despite this, major institutions including JP Morgan, Goldman Sachs, and Barclays maintain positive ratings. The average analyst price target stands at €38.99, well above the current trading price.

Looking ahead, the company's mid-term guidance for 2026 projects an adjusted EBITDA AL of around €47.4 billion, an adjusted free cash flow AL of roughly €19.8 billion, and an adjusted EPS of approximately €2.20. All eyes are now on May 13th, when Deutsche Telekom will report first-quarter figures. These results will show if operational performance aligns with forecasts and may provide further details on the Starlink partnership. Analysts, on average, expect a full-year 2026 EPS of €2.18.

Beyond satellites, the group is developing "Direct-to-Device" solutions for mobile communications, slated for availability from 2028. Investors will also monitor the performance of T-Mobile US, which recently traded around $197.63.