Deutsche Telekom’s Conflicting Signals: Record Profits, Stalled Wage Talks, and a Copper Clash

Rarely has a company painted such a contradictory picture. Deutsche Telekom is posting record earnings, rolling out artificial intelligence to slash costs, and enjoying analyst endorsements with a median price target of €38.56 — a 32% upside from the current share price. Yet inside the Bonn-based telecoms giant, more than 32,000 employees have walked out in warning strikes since late April, and a rancorous dispute with the Verdi union is threatening to escalate.

Investors, for now, are holding their nerve. The stock closed at €29.27, just above its 200-day moving average of €29.22 and roughly 14% below the 52-week high of €34.25. Since the start of the year, the shares have eked out a modest gain of about 5%. But the calm at the surface belies a trio of tensions that could test the company’s narrative in the weeks ahead.

The Copper Exit That Divides an Industry

A separate front has opened over the future of Germany’s legacy copper network. At the Anga Com trade fair in Cologne, Vodafone Deutschland CEO Marcel de Groot called for the copper-based DSL system to be switched off as early as 2028, arguing it is the only way to meet the European Union’s 2035 deadline for full network migration. Deutsche Telekom is pushing back hard. The company insists that a shutdown makes no sense until fibre-to-the-home is universally available — and the numbers back its caution. Roughly 21.8 million German households still rely on DSL, while fibre has reached only 7.8 million connections and cable another 8.5 million. Shutting copper in 2028 would leave millions without an alternative.

The company has found an ally in Digital Minister Karsten Wildberger, who has warned against implementing such a move “with a sledgehammer.” For Deutsche Telekom’s management, the DSL dispute is a strategic headache that could slow its own fibre rollout plans and invite regulatory friction just as the group is flexing its financial muscle.

Should investors sell immediately? Or is it worth buying Deutsche Telekom?

Record Numbers, AI Efficiency, and a Raised Target

The operational engine, at least, shows no sign of stalling. Organic revenue rose nearly 5% to €29.9 billion in the first quarter, while adjusted operating profit hit €11.5 billion. Management now sees full-year 2026 operating profit reaching around €47.5 billion and free cash flow exceeding €19.8 billion. These numbers underpin a confident outlook from CEO Tim Höttges, who has been steering the group toward higher-margin digital services and cost discipline.

Artificial intelligence is playing a growing role in that drive. A chatbot handled roughly one million customer calls in Germany during the first quarter alone, and Deutsche Telekom plans to double that rate over the rest of the year. Software is also taking over tasks in fibre planning and quality control, cutting deployment costs. A detailed breakdown of the financial impact from the company’s AI push is expected at an investor event scheduled for early October.

A Stubborn Standoff at the Bargaining Table

But none of that progress has softened the labour front. Verdi is demanding a 6.6% wage increase over a twelve-month term, plus a €660 bonus for union members. The third round of talks in Potsdam collapsed without a deal, with Verdi chief negotiator Frank Sauerland rejecting an employer “structure proposal” as insufficient. The issue of compensating for real wage losses remains a key sticking point, and the walkouts are spreading. For the first time, employees at sales and service subsidiaries joined the protests in solidarity.

The industrial action has been concentrated in North Rhine-Westphalia, Hesse, Rhineland-Palatinate and Saarland. On Tuesday alone, around 650 staff in the southwest region downed tools at locations including Mainz, Koblenz and Saarbrücken, causing delays to customer service and fibre deployment. The fourth round of negotiations is scheduled for 26 and 27 May — widely seen as a make-or-break moment. A failure to reach a deal would almost certainly trigger an expansion of the strikes, adding uncertainty to a stock that has so far shrugged off the disruptions.

Deutsche Telekom at a turning point? This analysis reveals what investors need to know now.

Insider Buying and Upcoming Catalysts

Inside the boardroom, there is at least one sign of confidence. Board member Petra Steffi Kreusel purchased shares at €27.86 in mid-May through an employee program, a small but pointed bet from within the company. Analysts, meanwhile, remain broadly bullish. J.P. Morgan, Goldman Sachs, UBS, and Deutsche Bank all rate the stock a buy, with the consensus earnings per share for 2026 standing at €2.21.

The next major checkpoints for shareholders are the fourth wage round next week, the investor day in October, and the second-quarter results due on 6 August 2026. Each will test whether the market’s patience with the gap between record profits and internal turmoil can hold — or whether the 200-day line finally breaks.

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Deutsche Telekom Stock: New Analysis - 20 May

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