Deutsche Telekom Raises Outlook as Fiber Gains and AI Targets Take Shape

Q3 revenue reaches €31.1 billion as T-Mobile US powers earnings growth, German fiber adoption accelerates and AI moves into the operating plan.

Deutsche Telekom raised its 2026 earnings and cash flow outlook after third-quarter revenue increased 7.5% to €31.102 billion and adjusted EBITDA after leases rose 9.9% to €12.210 billion. T-Mobile US continued to provide the largest earnings contribution, while Germany recorded its strongest quarter for fiber-to-the-home customer additions and returned to positive broadband net additions. The group now expects approximately €47.6 billion in full-year adjusted EBITDA AL and €20.1 billion in free cash flow AL, each €100 million above the previous forecast.

The underlying growth rates were lower than the reported increases but remained positive: Q3 revenue rose 5.5% organically, service revenue increased 4.1% and adjusted EBITDA AL grew 8.0%. Organic comparisons exclude currency movements and changes in the group’s composition. For the first nine months, service revenue increased 4.0% organically and adjusted EBITDA AL rose 7.6%, with the US business growing faster than operations outside the United States.

The infrastructure picture extends beyond mobile subscriber growth. German FTTH net additions reached 190,000, the European segment reached its 95% 5G population coverage ambition a year early, and T-Systems reported growth in its Digital business while expanding Industrial AI Cloud capacity. Alongside the current results, Deutsche Telekom set out targets for AI-related revenue and automation savings outside the US through 2030.

Revenue — €31.102bn +7.5% reported; +5.5% organic YoY

Service revenue — €26.045bn +6.1% reported; +4.1% organic YoY

Adjusted EBITDA AL — €12.210bn +9.9% reported; +8.0% organic YoY

Source: Interim Group Report, p. 3; results presentation, pp. 23 and 29. AL = after leases. Adjusted measures are company-defined alternative performance measures. Free cash flow AL is before dividends and spectrum investment; it excludes spectrum-sale proceeds.

T-Mobile US Still Sets the Pace

T-Mobile US generated Q3 revenue of $23.564 billion and adjusted EBITDA AL of $9.363 billion under Deutsche Telekom’s IFRS reporting, increases of 7.5% and 11.4%, respectively. In euro terms, the US segment contributed €8.135 billion of adjusted EBITDA AL, compared with €12.210 billion for the group. The presentation separately reports US GAAP adjusted Core EBITDA growth of 10.8%; that measure differs from IFRS adjusted EBITDA AL.

Commercial growth continued, although account additions were below the prior-year quarter. T-Mobile US added 274,000 postpaid accounts, compared with 396,000 in Q3 2025, taking the base to 34.974 million. The presentation put postpaid average revenue per account at approximately $156, versus $149 a year earlier. Postpaid account churn reached 1.09%, compared with 1.0% in the preceding quarters, partly reflecting a higher proportion of broadband-only accounts. Accounts can include fixed-network services and should not be read as individual mobile connections.

The group’s higher outlook reflects the improved US expectations. Deutsche Telekom’s guidance uses an exchange rate of $1.13 per euro and incorporates an accounting bridge between T-Mobile US’s US GAAP measures and the group’s IFRS measures. The distinction matters when comparing the US business’s own targets with its contribution to Deutsche Telekom’s consolidated results.

Germany: More Fiber Customers, Modest Broadband Growth

Germany’s FTTH additions increased to a quarterly record of 190,000, up from 161,000 in Q2 and 155,000 a year earlier. Fiber penetration rose to 17.9%, compared with 17.5% in Q2 and 16.1% in Q3 2025. At September 30, the German fiber footprint passed 14.4 million households and businesses.

Overall retail broadband net additions were much smaller at 11,000, following a loss of 20,000 in Q2 and 25,000 in the prior-year quarter. FTTH additions and total broadband additions measure different developments: fiber uptake includes customers changing access technology, while the total broadband base captures the net change across technologies. The German retail broadband base remained slightly below its year-earlier level at 15.090 million lines.

Revenue trends also improved. Organic broadband revenue growth accelerated to 2.8% from 1.9% in Q2, and 59% of retail broadband customers subscribed to tariffs offering at least 100 Mbit/s, up from 54% a year earlier. Organic wholesale access revenue declined 1.7%. Germany’s total revenue increased 3.9% to €6.597 billion, while adjusted EBITDA AL rose 1.5% to €2.774 billion, marking its 40th consecutive quarter of growth. Management cited expected cost phasing for the slower earnings increase and a positive World Cup effect on revenue.

Germany FTTH — 190,000 Q3 net additions 17.9% penetration; 14.4m premises passed

Germany broadband — 11,000 Q3 net additions Organic broadband revenue +2.8% YoY

Germany mobile — 284,000 branded contract net additions Mobile service revenue +2.9% organically

German data demand — 24.6 GB per month, +32% YoY, for B2C T-branded contract customers

5G population coverage — Germany: approximately 99% European segment: 95.4%

Sources: Interim Group Report, p. 9; presentation, pp. 6 and 16–21. Footprint figures are as of September 30, 2026. Germany and the Europe operating segment are reported separately.

Europe Combines Network Expansion with Convergence

The European operating segment increased revenue 4.2% organically to €3.312 billion and adjusted EBITDA AL 4.3% organically to €1.313 billion. Reported EBITDA AL growth was higher at 6.3%, with currency strength in Hungary contributing to the difference. The segment recorded its 35th consecutive quarter of organic EBITDA growth and added 225,000 mobile contract customers and 64,000 broadband customers in Q3 on the presentation’s commercial net-additions basis.

Fixed-mobile convergence remains part of the expansion strategy. Deutsche Telekom agreed in August to acquire Fiberhost and Inea in Poland at an enterprise value of approximately €1 billion. The transaction would add a network passing more than 1.4 million homes and more than 300,000 broadband customers to T-Mobile Polska’s converged offering. It remains subject to approvals and other closing conditions, with completion expected in Q4 2026 or Q1 2027.

AI Gains Revenue Targets and an Operating Scorecard

T-Systems’ Q3 revenue increased 6.5% on a reported basis and 5.7% organically to €1.080 billion. Adjusted EBITDA AL reached €132 million, up 4.3% reported and 4.8% organically. The presentation identified Digital services as a revenue growth driver, positive momentum in public and defense customers, and strong demand behind the Industrial AI Cloud capacity expansion. The interim report attributes nine-month order growth partly to large AI Cloud deals; it does not disclose a separate Q3 AI Cloud revenue total.

The AI Investor Day targets, presented on October 5 and recapped in the earnings materials, distinguish external revenue opportunities from internal productivity improvements. Outside the US, Deutsche Telekom expects around €250 million of AI-related business-customer revenue in 2026 and aims for around €800 million in 2030. Its broader ambition for additional AI revenue pools exceeds €1 billion by 2030.

AI and Automation | Targets Outside the US

Business-customer AI revenue — ~€250m expected in 2026 ~€800m targeted for 2030

Gross savings — ~€1.1bn by 2027 ~€2.5bn by 2030, versus 2023

Software development — 2030 targets: 50–60% productivity improvement; 70–80% of code written with AI

Customer service — 2030 target: all calls initially handled by AI

Autonomous networks — 2030 target: Level 4 for high-value use cases

Sources: Interim Group Report, p. 9; presentation, p. 8. Targets are management ambitions, not achieved results. Gross savings exclude token costs. The 2027 savings measure covers indirect costs after leases and capex; the 2030 measure covers indirect costs after leases, including capitalized labor. They are not net profit forecasts.

The savings assumptions warrant particular attention. The presentation excludes token costs from the gross savings figures, and the 2027 and 2030 measures cover different cost categories. The earnings package does not provide a net AI contribution after all inference, deployment and operating costs, or enough detail to derive an Industrial AI Cloud utilization rate or return on invested capital for Q3.

Cash Generation Supports a Higher Outlook

Nine-month free cash flow AL increased 1.7% to €16.417 billion, a slower pace than adjusted earnings growth. Cash capex before spectrum fell 3.2% to €11.820 billion. Germany’s nine-month capex decline mainly reflected the timing of fiber investment; management still expects a slight full-year increase there. The presentation also flags an expected Q4 catch-up in investment outside the US.

Reported and adjusted profit tell different nine-month stories. Adjusted net profit increased 10.2% to €8.393 billion, while reported net profit declined 8.0% to €7.255 billion. The interim report identifies higher special-factor expenses, primarily in the US, and a weaker financial result against a prior year that benefited from impairment reversals on investments in GD Towers and GlasfaserPlus.

2026 Outlook | Higher Earnings and Cash Flow

Proposed dividend — €1.10 per share for 2026, versus €1.00 for 2025

Net debt at Sept. 30 — €134.208bn including leases €100.515bn excluding leases

Leverage including leases — 2.55x, versus 2.62x at year-end 2025

Sources: Interim Group Report, pp. 3, 5 and 8; presentation, pp. 10 and 32. Guidance assumes $1.13/€. Dividend and 2027 buyback are subject to necessary approvals. Debt figures are point-in-time balances.

“Our strong figures are setting benchmarks in our industry,” said Tim Höttges, CEO of Deutsche Telekom, in the company’s results release.

• T-Mobile US remains the largest earnings contributor and drives the group outlook increase.

• German fiber adoption accelerates, while total broadband growth remains modest.

• European 5G coverage reaches 95.4%; convergence expands through planned Polish fiber acquisitions.

• AI targets cover both new revenue and internal efficiency, with gross savings excluding token costs.

• Reported nine-month net profit declines despite higher adjusted profit.

Deutsche Telekom’s results show why fiber adoption and network reach need to be assessed together. German FTTH additions and penetration are improving, but the much smaller increase in total broadband customers indicates that access upgrades remain a major part of the commercial story. Broadband revenue growth provides another measure of progress. For infrastructure suppliers and operators, the relevant combination is premises passed, active fiber use and revenue per customer, rather than build-out volume alone.

AI now has a more explicit place in Deutsche Telekom’s operating model: T-Systems pursues external AI Cloud business while the network, software and service organizations carry productivity targets. That creates two distinct tests of execution. External growth requires customer demand to translate into recognized revenue; internal efficiency requires gross savings to translate into benefits after the costs of running AI. The current disclosures establish targets but do not yet provide a complete financial bridge for either.

The US operation continues to determine much of the group’s growth trajectory, while Germany and the European segment supply steadier contributions. The next useful checkpoints are sustained German broadband gains, further fiber penetration, T-Systems’ conversion of AI-related orders into revenue, and the Q4 investment catch-up. Those operating measures will help establish whether the higher cash flow outlook is accompanied by continued network expansion and measurable productivity gains.

August 6, 2026 | Clouds and Carriers — Deutsche Telekom Highlights Fiber, 5G and Enterprise Infrastructure Prior-quarter context for fiber uptake and investment.

May 28, 2026 | Clouds and Carriers — Deutsche Telekom and SAP to Build Sovereign AI for Germany Background on public-sector AI demand.

March 3, 2026 | All — Deutsche Telekom Expands Sovereign Industrial AI Cloud Tracks the enterprise workflow ecosystem.

February 4, 2026 | AI Infrastructure — Deutsche Telekom Launches Sovereign AI Factory with 10,000 Blackwell GPUs Background on the industrial compute platform.

October 21, 2026 | 5G / 6G / Wi-Fi — T-Mobile Completes Commercial 5G AI-RAN Call Separate context on AI in radio networks.

Leadership — Tim Höttges, CEO; Christian Illek, CFO; Jan Hofmeyr, Product and Technology, effective November 1, 2026

Business — Fixed and mobile networks, broadband, enterprise cloud, digital and AI services

Operating segments — Germany; United States (T-Mobile US); Europe; Systems Solutions (T-Systems)

Network footprint — 14.4m German and 12.0m European-segment fiber premises passed at September 30

Media contact — Corporate Communications: media@telekom.de; +49 228 181 49494