Deutsche Telekom Faces Elliott Pressure as AI Overhaul Reshapes Customer Service

Elliott pushes Deutsche Telekom to drop a full T-Mobile US merger in favor of buybacks, as the carrier replaces phone menus with AI agents.

Two forces are converging on Deutsche Telekom this autumn: an activist investor agitating against a full merger with its American arm, and an internal technology push that will retire the company's automated phone menus in favor of conversational AI agents.

The Bonn-based carrier's stock has been under pressure on several fronts. Analyst Florian Treisch pointed to shifting conditions for the company, while a sector assessment from Morgan Stanley prompted caution across European telecom names — a mood that weighed on Deutsche Telekom and its peers, according to media reports. Shares finished the previous session at EUR 27.00, and on Thursday the stock closed with a modest gain of 0.5 percent at the same EUR 27.00 level. That leaves the title roughly 21 percent below its 52-week high of EUR 34.35.

Elliott Builds a Stake and Pushes Back on T-Mobile US

Media reports indicate that Elliott Investment Management has assembled a significant position in the German group. The hedge fund is pressing management to abandon any pursuit of a full merger with US subsidiary T-Mobile US, arguing instead for expanded share buybacks as the route to lifting shareholder value.

The company has already been moving on that front. On August 6, the management board approved an increase to its existing repurchase program, with up to an additional EUR 3 billion in own shares to be acquired through the end of 2026. That top-up lifted the total program volume to as much as EUR 5 billion. Between August 10 and mid-September, the company had already bought back more than 14 million of its own shares.

Selective acquisitions form the other half of the capital allocation story. On August 20, Deutsche Telekom acquired Polish providers Fiberhost and Inea from Macquarie Asset Management for around EUR 1 billion, a move aimed at strengthening T-Mobile Polska's market position. According to Reuters Breakingviews, purchases within the European Union are seen as the most promising avenue for future takeovers by the group.

Phone Trees Give Way to Conversational AI

On the operational side, Chief AI Officer Kartik Sheth used the HumanX conference in Amsterdam to announce that the classic automated telephone menus in the company's customer service will be replaced by interactive AI agents. Rather than navigating preset keypad and topic trees, callers will be able to resolve their concerns directly in dialogue with AI systems.

The shift is billed as a strategic modernization of customer care, with the group expecting not only greater efficiency and lower cost per customer contact but also shorter waiting times for users.

Software and connectivity remain a broader theme. In mid-September, the business customer unit Deutsche Telekom IoT expanded its multi-orbit roaming portfolio by integrating Iridium's low-Earth-orbit satellite network, delivering worldwide data connections for 5G devices to industrial and logistics customers that need coverage beyond terrestrial mobile networks. On the consumer side, the launch of T-Travel introduced a provider-independent platform for mobile data packages via eSIM, covering more than 200 travel destinations. The company also rolled out a calculator for determining the CO2 footprint of end devices, responding to growing sustainability requirements in the hardware segment.

Investor Day, Quarterly Results and a Boardroom Handover

Several dates now loom for shareholders. On October 5, Deutsche Telekom will host an investor day devoted specifically to the business opportunities presented by artificial intelligence. Exactly one month later, on November 5, the management board will present third-quarter 2026 figures.

Leadership is being reshaped for the longer term as well. Effective November 1, 2026, Jan Hofmeyr — whose background spans AWS, Comcast and Microsoft — will take charge of the board division for product and technology. In finance, CFO Christian Illek will leave the group in 2027 for age reasons, with Dhananjay Mirchandani succeeding him on May 1, 2027.