Deutsche Telekom Wires Up for the Future as Legacy Services Fade and Buybacks Tick Over

Deutsche Telekom will stop MMS service in June 2026, shifting to RCS as it rapidly expands fiber across Germany, with Q1 revenue of €29.9B and a stock buyback underway amid a 9% annual share price decline.

The curtain is falling on one of mobile telephony's oldest tricks. Deutsche Telekom will stop sending MMS messages across its network at the end of June 2026, pulling the plug on a service that has survived nearly 25 years. Vodafone retired its own version in 2023, and rivals Telefónica and 1&1 are following suit. The once-popular picture-messaging tool has been all but replaced by apps, and the Bonn-based operator is shifting to RCS chats, which run over standard data allowances. The move frees up network capacity without any direct financial hit flagged by management.

That capacity will be needed. Telekom is laying fiber at breakneck speed, adding 2.5 million households a year to its footprint. In Freiburg, more than 93,000 of 155,000 homes can already tap fiber, and inner-city districts Süd and West will get another 3,700 connections from August 2026. Karlsruhe’s coverage is approaching 60%, with 114,000 households in the city and 41,000 in the surrounding county already connected. Even the Sauerland town of Winterberg is getting a state-subsidized build-out: 1,350 homes and businesses will receive speeds of up to 2,000 megabits per second, requiring over 223 kilometers of cable. Across Germany, the fiber penetration rate has climbed from 15.5% to 17.1% since the start of the year, and Telekom now counts more than 13.37 million optical lines nationwide.

The company is also getting a regulatory tailwind. The federal cabinet has advanced a reform of the Telecommunications Act that introduces a new full-build right: one network operator can lay a connection serving all apartments in a multi-dwelling building as long as it hooks up the entire property. Approvals are supposed to speed up. Provider associations grumble that the market leader benefits most, but Telekom, with a 41% broadband market share and 15.1 million fixed-line customers, is well placed to make the rules work in its favor. The Bundesnetzagentur already allows copper switch-offs once fiber reaches 80% coverage in a given area, putting pressure on rivals to accelerate their own migration.

Operationally, the numbers are solid. First-quarter 2026 revenue came in at €29.9 billion, while organic service revenue rose 4.6% to €25.0 billion. Adjusted EBITDA AL climbed 7.5% organically to €11.5 billion. CEO Tim Höttges has nudged up the full-year target slightly, now expecting adjusted EBITDA AL of around €47.5 billion and free cash flow after leases above €19.8 billion. Much of that strength flows from the booming US subsidiary, T-Mobile US.

Yet the stock remains stuck in a rut. Shares closed Friday at €28.33, roughly 9% lower than a year ago and well below the 200-day moving average of €29.00. The gap to the 52-week high of €34.35 is yawning. Management is trying to signal confidence through a buyback programme: in the week from June 1 to 5 alone, it repurchased 1.58 million shares at an average price of €28.49, spending about €45 million. Since the programme began in April, almost 13.66 million shares have been retired.

A potential catalyst is looming in the labor sphere. Telekom reached a pay deal with the ver.di union in late May covering roughly 60,000 employees. The agreement runs through 2028 and includes staggered pay increases. Members vote on Wednesday, and if they give the nod, the board gains planning certainty over a major cost line. A positive outcome could give the stock a clear lift when trading resumes next week.

Until then, investors are left weighing the promise of fiber scale and regulatory advantage against a share price that refuses to reflect operational momentum. The end of MMS is a small symbolic step; the real test is whether the convergence of network modernization, political backing, and ongoing share buybacks can finally snap the stock out of its year-long funk.