Deutsche Telekom Raises Profit Forecast and Dividend After Strong U.S. Growth

Post by : Sameer Saifi

Germany’s leading telecom company, Deutsche Telekom, has raised its profit outlook and announced a higher dividend for this year after reporting solid third-quarter results and stronger growth in the United States. The company’s performance was boosted by its U.S. operations and its recent acquisition of UScellular, along with growing demand for cloud and AI services in Europe.

On Thursday, Deutsche Telekom said it now expects its full-year core profit, measured as EBITDA AL (earnings before interest, taxes, depreciation, and leases), to reach around 45.3 billion euros, slightly higher than its earlier forecast of 45 billion euros. It also raised its forecast for free cash flow after leases to about 20.1 billion euros, up from its previous guidance of “more than 20 billion.”

The company reported 11.1 billion euros in adjusted earnings for the third quarter, which matched the average expectations of analysts. This shows stable growth despite a challenging global economy.

In a move to reward shareholders, Deutsche Telekom announced that it will increase its annual dividend from 90 cents to 1 euro per share, reflecting confidence in its business performance and financial strength.

The company said its stronger outlook is largely due to positive trends in the U.S. market. Its American subsidiary, T-Mobile US, has been performing very well and continues to expand its customer base. The recent $4.4 billion acquisition of UScellular, completed in August, also contributed to this success.

T-Mobile had earlier said that the deal would add about $400 million in service revenue in the third quarter alone. This has helped strengthen Deutsche Telekom’s global position as one of the world’s most profitable telecom companies.

Besides its U.S. operations, Deutsche Telekom’s technology and IT services arm, T-Systems, also showed impressive results. The division recorded a 23.7% rise in quarterly profit compared to the same period last year, mainly due to growing demand for cloud computing and AI-based services.

In early November, Deutsche Telekom and Nvidia announced a 1 billion euro partnership to develop an AI cloud system, which is expected to launch in 2026. The company also plans to build one of the European Union’s largest AI gigafactories in North Rhine-Westphalia, Germany, in collaboration with Nvidia.

Chief Executive Tim Hoettges said Deutsche Telekom is committed to investing more in artificial intelligence and digital technologies. He mentioned that if the first AI gigafactory performs well, the company would be ready to “double down” on such investments to make Germany and Europe more competitive in the global tech race.

The telecom giant’s strong performance comes at a time when global companies are focusing on digital transformation. Deutsche Telekom’s growth strategy now combines its powerful U.S. telecom network with Europe’s expanding digital services market.

The company’s efforts to lead in AI and cloud technologies show its ambition to go beyond traditional telecom services. Analysts say Deutsche Telekom’s long-term success will depend on how effectively it balances investments in next-generation technology with maintaining stable profits from its core business.

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