Deutsche Telekom’s Fiber Conundrum and Labour Standoff Weigh on Shares Despite Solid Q1

Despite 4.6% revenue growth and 7.5% EBITDA rise, Deutsche Telekom's stock falls 5.5% below 200-day moving average amid slow fibre uptake and labour tensions with ver.di.

The operational story at Deutsche Telekom is a tale of two halves. While the company posted a robust set of first-quarter numbers—organic service revenues up 4.6% and EBITDA climbing 7.5%—the stock remains stuck in a technical rut. At Friday’s close of €27.63, the shares had shed 0.58% on the day and sat 5.52% below their 200-day moving average. A separate report put the closing tick at €27.70 and the deficit to the 200-day line at 5.28%, but the message was the same: the market is not buying the bull case, at least not yet.

The drag comes from two distinct sources. One is the slow uptake of the company’s fibre-to-the-home (FTTH) network, a capital-intensive bet that has yet to generate the revenue traction management wants. The other is a brewing labour dispute with the ver.di union, which is gearing up for a fourth round of negotiations on 26 and 27 May.

Fibre growth is fast, but sales lag behind

Deutsche Telekom ended March with around 2.2 million active FTTH customers in Germany, adding roughly 200,000 in the first quarter. The take-up rate—the proportion of households that can order fibre and actually do so—stood at 17.1%, up 1.6 percentage points from a year ago. That still means five out of six eligible homes have not signed a contract.

Chief executive Tim Höttges has made no secret of his dissatisfaction. The economics of fibre only work when built capacity is filled, not when it exists solely as an infrastructure statistic. Chief financial officer Christian Illek expects the pace to pick up: the company targets 750,000 net FTTH additions this year and 1 million by 2027. On the build side, Deutsche Telekom aims to make fibre available to 2.5 million more households and businesses by 2026.

A structural obstacle lies in Germany’s multi-family apartment blocks, where landlords often block in-building cabling into individual units. In single-family homes, especially in suburban and rural areas, the conversion rate is notably higher. That skews the task from pure construction toward local sales and marketing—a shift that will test the operator’s distribution muscle.

Labour talks turn testy

The tariff conflict adds a layer of political and operational uncertainty. Ver.di, representing roughly 60,000 employees covered by collective bargaining, is demanding a 6.6% wage increase plus an annual membership bonus of €660, all under a 12-month contract. The employer’s offer on the table has been dismissed by the union as far too weak.

Since the first warning strikes began on 28 April, more than 20,000 workers have participated. A rally in Potsdam drew around 2,500 people. The action has expanded beyond core Telekom employees to include staff at the Deutsche Telekom Privatkunden-Vertrieb GmbH, Deutsche Telekom Services Europe SE, and T-Systems International GmbH—an escalation that raises the stakes for the upcoming round.

The union has linked pay demands to job security, pointing to the digital transformation that could displace workers. That theme sharpens when set against the company’s €2 billion share buyback programme announced for 2026. For ver.di, the buyback signals that the group has financial room to move on wages.

Analysts look past the noise—for now

Despite the labour friction and the fibre sales gap, the sell side remains broadly constructive. Deutsche Bank Research rates the stock a Buy with a €42 target, citing a reassuring first quarter, raised group guidance, and strong free cash flow outside the US. Bernstein Research holds an Outperform rating and a €37 target, noting that Q3 results landed within expectations.

The market, however, is taking a more cautious view. Over the past 30 days, Deutsche Telekom shares have lost nearly 3%. The relative strength index sits at 64.2, not signalling an oversold condition, while the stock trades 8.15% below its 50-day moving average. The technical picture is not yet broken, but it is far from healthy.

The upcoming week brings two milestones: the tariff negotiations on 26–27 May and the continuing push to improve the fibre take-up rate. If the company can avoid a hardened labour front and show progress on filling its glass-fibre network, the gap between operational strength and stock-market scepticism may finally begin to close.