Deutsche Telekom AG

Analyst thesis

Our recommendation is based on:

• B2B digital services: DTE is growing its high-margin business‑customer segment by offering 5G private networks, secure connectivity (SD-WAN) and sovereign cloud services to a range of companies and public institutions, with strong demand from factories, ports and logistics hubs.

• T-Mobile US market share expansion: T‑Mobile US has transitioned from a low‑cost challenger to the best‑in‑class network, supporting a mix shift toward higher‑quality, prime subscribers while continuing to expand into under‑penetrated rural America.

• German fibre monetisation (FTTH): The decade‑long copper-to-FTTH migration acts as a structural value driver, boosting ARPU through higher‑speed tiers and convergent bundles, while progressively reducing network maintenance and fault‑repair OpEx.

• Disciplined capital allocation: While European peers remain constrained by leverage and higher interest rates, DTE is returning ~€2 billion annually via buybacks and steadily increasing its TMUS stake from 50.6% to 52.8%, enhancing exposure to US growth without compromising balance sheet resilience.

• Artificial intelligence (AI) and data centre optionality: Strategic partnerships with NVIDIA and Brookfield to build sovereign AI compute infrastructure in Germany provide medium-term upside optionality as European enterprises and governments seek local, secure AI cloud capacity.