The German Telekom continues to strongly rely on the success of its subsidiary T-Mobile US in the coming years. The CEO, Tim Höttges, announced that the American subsidiary will significantly contribute to growth and operating profit. To further reduce costs, Telekom plans to increase the use of Artificial Intelligence (AI). These measures are intended to improve efficiency in areas such as customer service, network operations, and data centers.
Shares of Deutsche Telekom reacted positively to the announcements. Shortly after trading began on Thursday, the shares reached their highest level since 2001 at 27.20 euros and rose by a total of 1.68 percent. This reflects investors' confidence in the company's strategic direction and the strong performance of T-Mobile US, in which Telekom holds more than half. With a 50.4 percent stake in T-Mobile US, whose current value is around 114 billion euros, the American subsidiary contributes about 85 percent to Deutsche Telekom's total market capitalization.
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The long-term growth forecasts for Telekom are promising.
To achieve these goals, Telekom is increasingly relying on the use of AI. Customer service processes are to be automated, and the operation of networks and data centers optimized. Customers should receive more support through the app and AI-supported messenger services, allowing inquiries to be processed more quickly. Additionally, CFO Christian Illek plans a continuous reduction in the workforce to realize total savings of 700 million euros through the use of AI.
Alongside cost-reduction measures, Deutsche Telekom continues to invest in the expansion of fiber optic and 5G in Germany. By 2027, Germany CEO Srini Gopalan aims to surpass the milestone of one million new FTTH customers and provide nearly all German households with the 5G mobile standard. These investments are intended to strengthen the company's competitiveness and further expand the digital infrastructure.
Analysts praise Telekom's ambitious goals. JPMorgan analyst Akhil Dattani emphasized that the capital markets day highlights the company's attractive growth and earnings story. Andrew Lee from Goldman Sachs sees additional potential to further improve the consensus forecasts.
