Deutsche Telekom Links Directly With Cloudflare While Fiber Buildout Hits 14.1 Million Homes

Telekom sealed a direct Cloudflare interconnection and added 222,000 fiber connections in August, as Bernstein cut its rating and the stock trades 23% below its high.

Deutsche Telekom has moved on two fronts at once, sealing a direct network interconnection with Cloudflare and reporting fresh progress on its fiber rollout — even as the stock continues to trade well below its highs.

Under the agreement announced Tuesday, the Bonn-based carrier and the US cloud specialist will connect their networks directly, cutting out the third-party transit providers that have handled traffic between them until now. That arrangement, which relied on intermediaries such as Arelion and Cogent, had repeatedly produced noticeable page-load delays during peak periods, drawing user complaints and ultimately a proceeding at Germany's Federal Network Agency. The technical deal does not formally affect that pending complaint over suspected network throttling, and neither party disclosed any financial terms.

Beyond raw interconnection, the partnership extends into enterprise services. Group subsidiary T-Systems will fold Cloudflare's security and connectivity tools into its business-customer portfolio, targeting the protection of corporate networks, data flows and artificial intelligence applications, and will train and certify its own specialists for the work. The two companies also plan joint development in strategic technology areas, including digital sovereignty initiatives and scalable post-quantum cryptography to safeguard future data networks.

Internal Core Systems Get a Cloud-Native Overhaul

Running alongside the external connectivity work, Telekom is rebuilding its internal core infrastructure. The company said Tuesday that a cloud-native name-resolution system is now in successful operation on its Horizontal TelCo Cloud platform. Supplied by specialist Titan.ium, the solution merges services for fixed-line and mobile networks that were previously kept separate. The updated software architecture delivers low latency and automatic overload protection during live operation, and meets industry technical standards for modern 5G networks.

On the access side, Telekom completed 222,000 additional fiber connections in August, lifting the total number of households and businesses able to book fiber tariffs at bandwidths of up to 2,000 Mbit/s to 14.1 million.

Bernstein Steps Back, Buyback Presses On

The operational momentum contrasts with the share price. The stock slipped 1.5 percent to EUR 26.40 in Tuesday trading, and at that level sits 23 percent below its 52-week high of EUR 34.35.

Sentiment took a hit late last week when Bernstein downgraded the DAX group to "Market-Perform" from "Outperform" and cut its price target to EUR 28.10 from EUR 37. The analysts pointed to uncertainty surrounding a possible merger at subsidiary T-Mobile US and to intensifying competition in the German broadband market.

Management, meanwhile, keeps leaning on capital measures. A disclosure published Monday showed the company repurchased a further 3,292,319 of its own shares between September 21 and 25. Since the current buyback program began on August 10, the total has reached 17,298,084 shares.

AI Day and Q3 Numbers on the Calendar

Investors now have two dates to watch. On Monday, October 5, the group hosts its AI Investor Day, focused on the commercial applications of artificial intelligence. Roughly a month later, on November 5, Deutsche Telekom will publish its financial results for the third quarter of 2026, where margin development and customer growth are likely to draw the closest scrutiny.

Telekom is also widening its digital business and cloud offerings. Announced the same day as the fiber figures, a collaboration with provider caery will bring to market an AI-based software solution that automates billing, verification and payouts for health and long-term care insurers, running on the group's own T Cloud Public. For the Bonn telecom giant, smooth data flows remain the operational foundation of the entire business model.