Deutsche Telekom's Q1 2025 Performance: Mobile Growth and Broadband Challenges
Deutsche Telekom has reported its financial results for the first quarter of 2025, showcasing significant growth in mobile services while facing challenges in broadband expansion. This analysis delves into the key financial metrics, regional performances, and strategic initiatives that have shaped the company's recent performance.
Financial Overview
In Q1 2025, Deutsche Telekom achieved a revenue of €29.8 billion ($32.18 billion), marking a 6.5% increase compared to the same period last year. Adjusted EBITDA after leases (adj. EBITDA AL) rose to €11.3 billion ($12.20 billion), up 7.9% year-over-year, and adjusted net profit increased by 9.1% to €2.44 billion ($2.64 billion). Free cash flow after leases (FCF AL) surged 52.4% to €5.65 billion ($6.10 billion), supported by seasonal working capital gains and lower capital expenditures.
Mobile Services Growth
T-Mobile US Performance
T-Mobile US, a subsidiary of Deutsche Telekom, continued its strong performance in Q1 2025. The company added 1.2 million new customers, nearing the 100 million mark, and achieved industry-leading mobile customer additions. Service revenue increased by 3.6% to $16.1 billion, and adjusted EBITDAaL outlook for the full year was raised to $28.6 billion, reflecting a 6% increase from 2023. (voip.review)
European Mobile Markets
In Germany, Deutsche Telekom's mobile service revenue grew by 2.1% in the fourth quarter, with the customer base for branded contract mobile services expanding by 1.2 million over the full year. The company also added 1.2 million new customers in Germany in 2024, with notable increases in mobile and TV customers. (reuters.com)
Broadband Expansion Challenges
Fiber Optic Network Growth
Despite the strong performance in mobile services, Deutsche Telekom faced challenges in broadband expansion. The company reported a slight decline in broadband customer additions, with net broadband additions totaling 134,000 in 2024. The TV customer base grew by 311,000 during the same period. (ainvest.com)
Fiber-to-the-Home (FTTH) Deployment
Deutsche Telekom has been actively deploying fiber-optic networks, with more than 10 million households now able to subscribe to a fiber rate plan. The gigabit network already has a customer base of almost 1.5 million, with 472,000 new customers added in the year just ended, a 61% increase from 2023. (ainvest.com)
Strategic Initiatives and Outlook
Financial Strategy and Shareholder Remuneration
Deutsche Telekom plans to distribute a record dividend of €0.90 per share for the fiscal year 2024, subject to approval by the relevant bodies. Additionally, the company has outlined share buybacks of up to €2 billion in 2025. For 2025, Deutsche Telekom expects further growth, with adjusted EBITDA AL anticipated to be more than €44.9 billion, compared to €43.0 billion on a pro forma basis in 2024. (telekom.com)
Operational Focus
In Germany, Deutsche Telekom aims to maintain its clear market leadership by rolling out fiber networks at high speed, with 2.5 million additional homes passed by FTTH. The company also continues to invest in its mobile network to accelerate growth in the residential and business customer segments. In the United States, T-Mobile US continues to grow its customer base in B2C and B2B segments, thanks to superior network quality. (telekom.com)
Conclusion
Deutsche Telekom's Q1 2025 results reflect a strong performance in mobile services, particularly through T-Mobile US, and a commitment to expanding its fiber-optic network in Germany. While facing challenges in broadband customer additions, the company's strategic initiatives and financial strategies position it well for continued growth in the coming years.
