The Commission has yet to rule on whether the aid aligns with the internal market's standards.
Deutsche Telekom, Europe's largest telecommunications provider, is gearing up for significant growth, with potential for up to 50% expansion over the coming years. This optimistic outlook is driven by a combination of steady organic growth in Europe and Germany, alongside accelerated expansion and profitability in the US market through its subsidiary, T-Mobile US.
In the second quarter of 2025, Deutsche Telekom's group revenue grew organically by 4.0%, with service revenue also up by 4.0% year-over-year. This consistent performance across its core business is a testament to the company's robust organic revenue growth. Adjusted EBITDA AL increased 5.0% organically in Q2 2025 to €11 billion, supported by efficient cost management and operational performance in Germany, Europe, and the US.
Robust free cash flow is another key factor in Deutsche Telekom's growth prospects. Despite quarterly fluctuations, free cash flow increased 17.8% overall in H1 2025 to €10.5 billion, allowing the company to reduce net debt and maintain financial flexibility.
T-Mobile US, a listed subsidiary of Deutsche Telekom, plays a pivotal role in this growth strategy. The US telecommunications giant has reported record customer growth and upgraded customer forecasts, significantly enhancing Deutsche Telekom’s overall outlook. As the leading provider of 5G mobile communications in the US, T-Mobile US contributes substantially to Deutsche Telekom's consolidated revenue and EBITDA.
Deutsche Telekom holds a controlling stake of 52.1% in T-Mobile US, and the US subsidiary's strong performance and M&A successes are key drivers of group growth. T-Mobile US is anticipated to continue as a reliable growth driver for Deutsche Telekom, also in the future fiber optic business.
Analysts predict an upside potential of up to 50% for Deutsche Telekom's stock, with a price target of 40 euros. This optimistic outlook is supported by T-Mobile US's anticipated continued success and the company's plans to increase the proportion of free cash flow to sales to 25% by 2027.
Despite concerns about potential growth slowdown, Deutsche Telekom is expected to remain a short- and long-term outperformer in the European telecommunications sector. The company is one of ten European companies expected to have double-digit percentage annual earnings growth per share in the coming years.
It's worth noting that Deutsche Telekom's free cash flow is already around 50% higher than the combined $13 billion of all other European competitors. This, coupled with the company's lower valuation compared to other companies with similar expected earnings growth, suggests potential undervaluation in the market.
In conclusion, Deutsche Telekom's growth prospects are underpinned by a dual-geography strategy, with solid organic growth in Europe and Germany, combined with accelerated expansion and profitability in the US market through T-Mobile US. This, along with operational efficiencies, digital transformation, and strategic investments, positions Deutsche Telekom for a strong future in the European telecommunications sector.
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