Deutsche Telekom concluded the first quarter of the year 2024 with a surprising strength. The DAX-listed company reported a significant increase in new mobile customers and exceeded analysts' earnings forecasts. CEO Tim Höttges sees the company on track to achieve its annual targets. Nevertheless, Telekom's stock lost 0.9 percent on Thursday afternoon.

Höttges, however, is critical of the new mobile network expansion requirements of the Federal Network Agency. In a teleconference with journalists, he described them as an enormous cost-side challenge. Telekom must expand its network, especially in forests and nature reserves, even though the area coverage is already in the low 90-percent range.

In addition to Telekom, Vodafone and Telefonica are also important providers in Germany. The Federal Network Agency demands that these companies supply 99.5 percent of the area with at least 50 megabits per second by the beginning of 2030. In return, the rights of use for certain frequencies are to be extended by five years.

Höttges criticized that the new competitor 1&1 once again receives a free pass. 1&1 has repeatedly not met requirements and only has 1,350 antenna sites, of which just under 230 are in operation. "1&1 is handling the requirements according to the Pippi Longstocking principle: I make the world as I like it," said Höttges.

In the first quarter, Telekom impressed with 281,000 new contract customers and a 3.4 percent increase in service revenue. These positive developments were favored by high demand from the business customer sector and bundled offers for consumers. However, the broadband business disappointed with an increase of only 39,000 new contracts.

Finance Chief Christian Illek expresses dissatisfaction with the new broadband additions, but emphasizes the difficult market situation. Telekom plans to increase FTTH connections by around 450,000 this year.

Revenue across the group rose by 0.4 percent to 27.9 billion euros in the first quarter. Excluding currency and portfolio effects, growth was 1.6 percent. The adjusted result before interest, taxes, depreciation, and amortization including leasing costs (Ebitda AL) increased by 5.1 percent thanks to efficiency measures. The profit for shareholders was just under two billion euros, compared to 15.4 billion in the previous year, which benefited from the sale of the majority stake in the radio tower business.

Telekom's Annual Targets Remain Unchanged Despite Increased Forecast from T-Mobile US. Höttges Expects Daily Business Results of Around 42.9 Billion Euros and a Free Cash Flow of Approximately 18.9 Billion Euros. The Adjusted Earnings Per Share (EPS) Should Be More Than 1.75 Euros in 2024, Up from 1.60 Euros in the Previous Year.

In the meantime, hundreds of telecom employees in Stuttgart have called for a warning strike. Around 300 employees followed the call of the Verdi union to increase pressure in the ongoing wage negotiations. The rally took place in front of the MHP Arena where the employees demonstrated for a new wage agreement.

The German Telekom had received extensive media rights for the European Championship from the European Football Association UEFA in 2019. All 51 games of the EM will be broadcasted on MagentaTV, five of them exclusively. However, technical expansions must be completed before the start on June 14th.

The Deutsche Telekom stock closed 1.04 percent lower at 21.89 euros in XETRA trading.