Deutsche Telekom: World Cup Ratings Soar, Labour Peace Secured, Yet Stock Flirts with Year Low as Merger Uncertainty Endures

Telekom shares fall 5.7% in a week on renewed T-Mobile US merger fears, overshadowing record MagentaTV traffic, strong Q1 growth, and a new labor deal.

The numbers coming out of Bonn are eye-catching. More than 36 million viewers have tuned into MagentaTV during the first seven days of the World Cup, with the France-Senegal match alone drawing a peak audience of 6.5 million. Traffic hit a record 14,700 gigabits per second during Germany's opener. Subscription sales have more than doubled compared to the 2024 European Championship. Yet Deutsche Telekom's share price continues to drift lower, closing Friday at €26.72 — barely three percent above its 52-week trough of €25.99 and down roughly 14 percent over the past twelve months.

What is drowning out the operational cheerleader noise is the same cloud that has hung over the stock since April: the prospect of a full-scale merger with T?Mobile US. A fresh report from the Wall Street Journal that Chief Executive Timotheus Höttges is exploring ways to integrate the U.S. unit more closely revived speculation that first emerged when Bloomberg flagged a possible full combination of the two groups. T?Mobile US already contributes nearly two-thirds of group revenue, and formal consolidation would lock in that engine. But for shareholders, the risks are tangible. The German state holds about 28 percent of the voting rights, and any deal could dilute that stake. Regulatory hurdles on both sides of the Atlantic add further layers of uncertainty.

The market's reaction last week was unambiguous: the stock shed nearly 5.7 percent, its heaviest weekly loss since the initial Bloomberg report in April. That sell?off more than offset the positive news that had been building over the preceding weeks.

On the labour front, the group reached a definitive agreement with the ver.di union on May 26?27 in Frankfurt, ending weeks of strike action that had involved more than 32,000 employees. The new contract covers roughly 60,000 workers and runs for 33 months through the end of 2028. Total wage increases amount to about 8.5 percent, phased in three steps. From August 2026, the monthly supplementary pay for full?time staff will rise permanently by €150 to €340; the second step follows in July 2027; and the base pay tables will increase by a further 2.4 percent in June 2028. Compulsory redundancies are ruled out for the entire term of the agreement.

The fundamentals themselves remain robust. First?quarter 2026 revenue grew organically by 4.7 percent to €29.90 billion, while adjusted EBITDA AL improved 7.5 percent. Management has raised its full?year guidance to around €47.5 billion for adjusted EBITDA AL and expects free cash flow AL of more than €19.8 billion. A multibillion?euro share buyback programme is also underway.

None of that has been enough to arrest the slide. The stock now trades almost 22 percent below its 52-week high, and the discount to its 200?day moving average is close to eight percent — a classic sign of a sustained downtrend. With the next quarterly report due on August 6 — the first set of hard financial data to capture the World Cup effect — some analysts expect the underlying strength to re?emerge. But as long as the T?Mobile US debate remains unresolved, merger jitters are likely to keep hogging the spotlight.