Deutsche Telekom Modernizes Half Its Mobile Sites While Chasing €700 Million in AI Savings

Deutsche Telekom has upgraded about half its German mobile sites and added 222,000 fiber connections in August, as Bernstein keeps a neutral rating.

Deutsche Telekom has brought roughly half of its own mobile network sites in Germany up to the latest technical standard, the Bonn-based carrier said on September 30, as it works to convert its existing infrastructure into an ultra-capacity network. The driver is mobile data traffic, which the company says is climbing by about 30 percent every year.

The buildout is not confined to wireless. In August alone, the group added 222,000 fiber connections, lifting the total number of households and businesses able to order pure fiber-based services to 14.1 million. Both programs reflect a strategy of leaning on owned infrastructure to defend a competitive edge in a saturated market, where everyday transmission quality is what keeps subscribers from switching.

Bernstein Keeps a Neutral Stance as Brussels Signals Flexibility

Analyst Ulrich Rathe of Bernstein Research left his rating on Deutsche Telekom at "Market-Perform" with a price target of EUR 28.10 on September 30. He pointed to a Reuters report on EU plans to soften the timetable for swapping out components made by Huawei and ZTE, noting that Deutsche Telekom and Vodafone could be among the beneficiaries of any easing.

On the customer-facing side, the company said on September 24 that it will roll out 50 flexible shop formats across Germany. Investors will get a look at the operational picture on November 5, when the group reports third-quarter financials.

A €700 Million Efficiency Target Backs the Software Pivot

Behind the network work sits a broader transformation from traditional telecom operator to a software- and technology-driven group. While CEO Timotheus Höttges publicly cast himself in September as the sector's biggest AI optimist, the share price has stirred internal debate. According to Handelsblatt, insiders described concerns within the company that its technology and efficiency strategy has yet to deliver the hoped-for effect in the capital markets.

Management intends to translate the technological repositioning into hard results. Through heavier use of artificial intelligence and process automation, Deutsche Telekom aims to save around EUR 700 million by 2027. To lay out those plans for analysts, the board scheduled an investor meeting in Bonn for October 5, 2026.

New revenue is meant to accompany the cost cuts. The Industrial AI Cloud in Munich is viewed as a key building block, with the specialized infrastructure targeted to generate roughly EUR 200 million in AI-related revenue by 2026.

Automation Already Paying Off in the B2B Book

Evidence that automated systems are running in production comes from the group's platform business, where modular software is designed to speed up operations in customer service and administration. Pharmaceutical wholesaler Phoenix Pharma in Hungary offers a practical case: service levels there jumped from an inconsistent 60 percent to a reliable figure above 98 percent. Such deployments serve as proof for the group that automation can scale beyond pilot projects.

Shares Steady, Still Well Below Their High

The market has yet to fully price in these initiatives. Deutsche Telekom stock closed XETRA trading on Friday at EUR 26.59, gaining 1.9 percent on the day, yet it remains 23 percent below its 52-week high. The restraint reflects the hurdles facing the telecom sector, where declarations of intent on digitalization no longer satisfy investors. What matters now for Deutsche Telekom is converting its promised efficiency gains into quarterly numbers on schedule.