Telekom's Fibre Milestone and Transatlantic Merger Doubts: A Study in Contrasts
Published on 08/14/2026 at 05:03 | Redaktion boerse-global.de
The numbers tell one story; the share price tells another. Deutsche Telekom's second-quarter results, published on 6 August, delivered the kind of operational beat that would normally have investors reaching for superlatives. Yet the stock has now fallen for seven consecutive trading sessions, shedding 2.0 percent over the past week alone — a disconnect that says less about the company's execution and more about the structural questions hanging over its American arm.
The headline figures were undeniably robust. Adjusted EBITDA AL rose 7.5 percent to €11.8 billion in the second quarter, edging past the €11.7 billion consensus, while organic group revenue expanded 3.3 percent to €29.9 billion. Adjusted net profit climbed 11.1 percent to €2.8 billion. Management also sharpened its full-year free cash flow guidance to approximately €20 billion, up from a prior target of just over €19.8 billion — a revision backed by second-quarter cash generation of €5.0 billion, itself up 3.1 percent year on year.
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The Fibre Engine Accelerates
Beneath those aggregates, the German core business demonstrated welcome breadth. Group revenue in the domestic market rose 3.7 percent, with adjusted EBITDA up 2.7 percent. Mobile service revenues advanced 2.4 percent and broadband added 1.9 percent. More tellingly, the fibre rollout added a net 161,000 new connections — an 18 percent improvement on the prior year — offering evidence that the company's multibillion-euro infrastructure investment is beginning to pay off.
The full-year outlook now points to EBITDA AL of roughly €47.5 billion at constant currencies, a 6 percent increase, with the non-US segment contributing €15.4 billion. T-Mobile US, meanwhile, posted organic EBITDA growth of 9.6 percent in the first half, alongside what the company describes as industry-leading average revenue per user growth. The US arm also added 277,000 net postpaid phone customers in the quarter, comfortably ahead of the 217,000 recorded a year earlier.
The Merger Question That Won't Go Away
None of that, however, has been enough to calm investors fretting over the fate of a potential combination between Deutsche Telekom and its US subsidiary — a transaction reportedly valued at around $300 billion. Reports over the past week suggested that T-Mobile US executives harbour reservations about a full merger, citing regulatory hurdles and the prospect of opposition from minority shareholders.
Barclays responded on 10 August by trimming its price target from €36 to €35, while maintaining an "Overweight" rating. The rationale was explicit: uncertainty surrounding the corporate restructuring, not any deterioration in the underlying business. JPMorgan, for its part, reaffirmed "Overweight" with a €38 target on results day, praising Germany and European operations for slightly exceeding expectations.
The market's caution is understandable. A merger that stalls in regulatory review or collapses under minority shareholder pressure would complicate strategic planning for years. Even a procedural step forward would offer little comfort; a failure, by contrast, would deal a tangible blow to the valuation narrative. Adding to the pressure, reports of intensifying competition from SpaceX's satellite direct-to-device expansion pose a fresh challenge to traditional mobile operators, while T-Mobile US's workforce reduction — roughly 4,700 full-time positions cut in the first half, leaving 65,365 — underscores the cost discipline required even as growth continues.
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Buybacks and Sports Rights as Counterweights
Against that uncertainty, management has leaned on shareholder returns. The board expanded the ongoing buyback programme to up to €5 billion, citing what it sees as an undervalued share price. In July alone, the company repurchased more than 6.36 million shares on the open market. UBS identified the enlarged buyback as a key driver for the stock, and with the cash flow guidance holding at around €20 billion, the repurchase programme should remain a structural support regardless of how the US debate unfolds.
The company is also betting on premium content to bolster its television business. Deutsche Telekom secured the media rights to the 2030 FIFA World Cup — all 104 matches to be shown exclusively on MagentaTV — following its earlier acquisition of UEFA EURO 2028 rights, including 17 additional exclusive matches previously held by ARD and ZDF. The commercial impact will take time to materialise, but the deals are intended to underpin subscriber growth in the coming years.
A Narrow Band Between Support and Risk
For now, the stock sits within striking distance of its 200-day moving average — just 0.4 percent below — suggesting the medium-term technical picture remains intact. At Thursday's close of €28.42, the shares were up 0.9 percent on the day, and despite the recent softness, they remain 7.3 percent higher over the past month and 2.3 percent ahead since the start of the year. The gap to the 52-week high of €34.35, reached in late February, stands at 17 percent.
Two dates now loom as potential inflection points. On 5 October, management hosts an investor day focused on artificial intelligence; on 5 November, third-quarter figures will test whether the operational momentum from Q2 has carried through. Between now and then, the stock is likely to remain caught between a fundamentally solid earnings picture and an unresolved strategic question mark — with the market waiting to see whether the transatlantic merger debate moves toward resolution or deeper uncertainty.
