Deutsche Telekom raises 2026 guidance on T-Mobile gains
Deutsche Telekom's Financial Outlook and Strategic Moves
May 13 (Reuters) - Deutsche Telekom raised its full-year outlook on Wednesday, echoing the stronger guidance given by its U.S. subsidiary T-Mobile in April.
Potential T-Mobile Merger
The German operator is in the early stages of exploring a potential merger with T-Mobile, in which it already owns a 53% stake, to create a transatlantic telecoms giant, two people familiar with the matter said last month.
Management Response to Merger Talks
During a post-earnings press conference, Telekom's management declined to comment on the talks that could lead to the biggest-ever public merger.
Implications of a Potential Merger
A merger could create a company with a market capitalisation of nearly $300 billion, making it the world's most valuable telecoms group with more than 200 million mobile subscribers.
Regulatory and Geopolitical Challenges
However, the transaction would face major regulatory and geopolitical hurdles, were it to happen while tensions between the U.S. and Germany remain high, fuelled by new tariff threats and divergences over the U.S. war with Iran.
Asked about regulatory issues with the U.S. administration, Chief Financial Officer Christian Illek said the company had a "very constructive relationship" with the U.S. Federal Communications Commission, which would review any such deal and whose head, Brendan Carr, was nominated by President Donald Trump.
Focus on Partnerships and Innovation
FOCUS ON PARTNERSHIPS
Elsewhere, Telekom is looking to further expand its collaboration with German defence group Rheinmetall, with which it will develop a defence shield against drones and acts of sabotage to protect cities and critical infrastructure across Germany, CEO Timotheus Hoettges told reporters.
AI and Data Center Expansion
The company is also considering expanding its artificial intelligence cloud data centre in Munich, which started operations a few months ago, in partnership with Nvidia.
Financial Guidance for 2026
The Bonn-based telecoms operator expects its adjusted earnings before interest, taxes, depreciation and amortization after leases (EBITDAaL) to be around 47.5 billion euros ($55.7 billion) in 2026, up from the previously guided 47.4 billion euros.
Its shares were up 3% at 1045 GMT.
($1 = 0.8523 euros)
(Reporting by Emanuele Berro in Gdansk, editing by Milla Nissi-Prussak)
