Deutsche Telekom’s Share Price Rout Puts Buyback Programme in the Spotlight

Deutsche Telekom faces a pivotal week with Q1 earnings, a €550M buyback, and wage negotiations as shares drop 13% in a month.

The Bonn-based telecoms giant is entering a pivotal week, caught between a share price that has shed nearly 13% in a month and a looming showdown with labour unions that threatens to overshadow its first-quarter results. With a €550 million share buyback tranche still running and a critical round of wage negotiations scheduled, the tension between capital returns and labour demands has rarely been more acute.

A Stock in Retreat

The numbers tell a stark story. Deutsche Telekom’s shares closed at €27.41 on Friday, a level that now sits more than 6% below the closely watched 200-day moving average of €29.31. The stock has been sliding since April, and the year-low of €26.45 is beginning to look uncomfortably close. The weakness is all the more striking given the strong performance of T-Mobile US, the group’s American subsidiary, which posted a 10% revenue jump to $23.1 billion in the first quarter and added far more contract customers than analysts had anticipated.

Management has been trying to steady the ship through a hefty buyback programme worth up to €2 billion this year. Since January, the company has scooped up more than 21 million of its own shares from the open market. The second tranche, with a maximum volume of €550 million, is expected to run until the end of June. Most of the repurchased stock will be cancelled, boosting earnings per share for remaining holders.

Labour Unrest Intensifies

But the buyback has become a double-edged sword. The Verdi union, representing a large chunk of the German workforce, has seized on the programme as evidence that the company can afford to be more generous at the bargaining table. It has responded with full-day walkouts across twelve federal states, hitting service hotlines and technical support operations in particular.

The union is demanding a 6.6% pay rise plus an annual bonus of €660. The third round of negotiations is set to begin early this week, coinciding directly with the release of the quarterly figures. That timing is awkward for a management team that would prefer to focus investors’ attention on operational progress rather than industrial strife.

B2B Push and Fibre Ambitions

Operationally, the company is not standing still. Ahead of the football World Cup, Deutsche Telekom has struck a deal with Sky that will allow pubs, restaurants and public viewing organisers to access MagentaTV content through Sky’s existing business platform. The group will broadcast all 104 tournament matches, 44 of them exclusively. The move is squarely aimed at the B2B segment, with an eye on cross-selling opportunities for subscriptions.

On the domestic front, fibre remains the strategic priority. The company added around 370,000 new fibre connections in the first quarter alone, bringing the total number of households that can sign up for a fibre tariff to 13 million. The financial commitment is enormous: €30 billion earmarked for network expansion through to 2030.

The Q1 Verdict

All eyes are now on Wednesday, 13 May, when Deutsche Telekom publishes its first-quarter results. Analysts are forecasting adjusted earnings of €2.17 per share for the full year, a rise of roughly 10% from 2024. The US business has already set a high bar, and the market will be looking for evidence that the European operations can match that momentum.

If the numbers are strong and management can navigate the labour talks without major disruption, the current downtrend could find a floor. If not, the €27 support level may come under serious pressure. For a company that just paid out the highest dividend in its history, the next few days will determine whether the share price can catch up with the underlying business performance.