Deutsche Telekom Ag S/Adr

and welcome to Deutsche Telekom's second quarter 2026 conference call. Joining me today are our CEO Tim Höttges and our CFO Christian Illek. Tim will begin with an overview. Followed by Christian, who will take you through our quarterly performance and group financials in greater detail. After this, we have time for Q&A. Before handing over to Tim, please take note of the usual disclaimer included in our presentation and shown here. Also, please be aware that this conference will be recorded and uploaded to the internet. And now it's my pleasure to hand over to Tim.

Thank you Hannes and welcome everybody here today. I'm happy to present another set of strong results and a material step up in our returns to shareholders. But let me quickly start with a snapshot on the results. Our group organic service revenue is growing by 3.9% in the first six months. Organic EBITDA is growing by 7.4%. Adjusted APS is growing by 10.3%. Customer growth remains strong and peer leading in all our markets. So it's a broad development which we have across the group. And we raise our group free cash flow guidance today to reflect T-Mobile's guidance increase you have seen. We have a clear line of sight for our capital markets growth targets and we are all in a very positive mood here. But clearly, while we are delivering, there has been significant volatility for our shares. And I want to address some of this volatility in my prepared remarks today. I will not go through my usual charts today. They should be modestly self-explanatory. Instead, I will go through the four segments before coming to our capital allocation. The common thread for this are three themes. The first, we deliver strong and reliable growth. Second, we invest in our future profitability. And third, we allocate capital to grow our value per share. Let me start with T-Mobile. T-Mobile remains the clear growth leader in the US. Organic EBITDA growth based on IFRS was 9.6% in the first half of this year. T-Mobile added half a million accounts in the first six months, well on track for its full year target. and T-Mobile has established network leadership based on its superior spectrum position. This translates into ARPA opportunities. T-Mobile's ARPA growth is peer leading. At the same time, postpaid phone insurance has come down to 0.85 last quarter. Our focus is on quality, on quality growth, and you can see that in our numbers, our strategy is paying off. Looking forward, T-Mobile's company's privileged growth opportunities are fully intact. This is rural, this is B2B, and this is fixed wireless as the main areas. And T-Mobile is investing. We are investing in digitization to drive efficiencies and customer experience. We are investing into US cellular integration to drive attractive synergies. and we're investing in attractive fiber opportunities and we're investing in wireless technology leadership with evident results. And as my colleague Srini said on the call, we are looking to forthcoming spectrum auctions as an opportunity to further cement our leadership position. Next, let me talk about Germany. In Germany, we are delivering with our 39th quarter of consecutive ABDR growth. We are investing in our future profitability and our networks are market leading. And we keep investing ahead of the competition. We systematically leverage AI to drive additional efficiencies. Our mobile leadership is uncontested and further strengthened by our ongoing network modernization. We are delivering strong and consistent customer and service revenue growth, and by the way, even market check-ins. The broadband market, however, is more challenging, and we lost some subscribers this quarter. A key driver to this to this development is the fiber penetration alongside fiber homes past. We are seeing steady progress here with 161,000 fiber nets as this quarter. But as a priority, we will substantially accelerate this run rate and with it our fiber monetization. Positively, our broadband revenue growth improved this quarter and we are expecting further improvements in the coming quarters. Moving on to Europe. Our European segment delivers like a clockwork. 4% organic service revenue growth driven by consistent customer growth each quarter. 4% organic EBITDA growth this quarter, which is the 34th consecutive quarter of organic growth. We are investing in networks and customer experience. We are also integrating platforms to drive synergies across the footprint and making good progress, thanks to Christian, on network at scale. Our European business demonstrates that the whole can be more than the sum of the parts, as we have promised. And last but not least, T-Systems. T-Systems is delivering strong and steady financial results. It has become a strategic asset for Deutsche Telekom. We are very lucky with all this sovereignty discussion to have the leading IT company here in Europe under our roof. Demand for a sovereign cloud, demand for secure digitization, demand for AI applications and infrastructure is growing and TIS Systems is our lighthouse to take advantage of these opportunities. So in summary, we are delivering. Our EBITDA growth is best in class and our earnings per share, the growth is double digit. Our cash flows are strong and our leverage is prudent. We are investing to maintain and extend our strong growth into the future where we face challenges ahead. We act. This brings me to our capital allocation. Our capital allocation remains disciplined and focused on accretion for our shareholders. Accretion as measured by adjusted earnings per share. And as you know, we are not selling into the T-Mobile share bear back this year. Our T-Mobile stake therefore increased to 54.3% by July, up two percentage points from one year ago. We have been steadily executing our existing 2 billion share-by-back program here on the European side and today we are topping this up. In addition to our ongoing share-by-back, we are today proposing an additional share-by-back facility of up to 3 billion on top in 2026 alone. We have seen exceptional volatility in our shares in recent months. Our shares have traded at the bottom of their long-term valuation ranges and do not seem to reflect the growth opportunities we see. And so we are taking actions now and step up our share-by-back program. Buying back our undervaluated shares is an excellent investment, consistent with the capital allocation framework we outlined in our 24 Capital Markets Day. At our cost of capital, buying back our shares drives attractive accretion to earnings per share. Why this magnitude? Because it can drive meaningful accretion to our adjusted earnings per share. Why not more? Because discipline always goes both ways. We want to take advantage of our any excessive discounts, but we will not put our network leadership, our spectrum flexibility, our A rating or our strategic flexibility at risk. And why up to? Because we buy value. For us the share-buy-back is an investment. It's not volume at any price. The bigger the gap to intrinsic value, the more attractive is the share-buy-back for us. Our dividend remains the reliable foundation of our shareholder remuneration. The buyback is a flexible complement to leverage exceptionally valued discounts in the interest of our shareholders. The additional facility increases our total shareholder remuneration in 26 to almost 10 billion euros if it is fully utilized. And this is, by the way, the highest ever. As Christian will show you later, with our leverage ratio well below our stated 2.75 target, we have the balance sheet headroom for this additional facility. I have not spoken about what we are doing, so finally a few words on what we are not doing. We are not commenting on speculated transactions. This is our well-established principle. We are not doing transactions that do not create a clear and compelling superior return for our shareholders. This is true for M&A, this is true for Spectrum Acquisitions, this is true for Fiber CapEx, and this is true for Shareable Dex as well. I think it is fair to say that this management team has a 15-year track record of disciplined and successful capital allocation. The capital allocation decision we announced today, the additional buyback facility, reflects exactly this discipline. Beyond this announcement today, there is nothing to communicate. As mentioned, I will skip the next pages as most topics have been covered and move straight to our guidance increase on page 10. T-Mobile US raised its 2026 free cash flow guidance by 0.2 billion at the midpoint on 23rd of July. And we are passing on this guidance today. As a result, our group free cash flow guidance increased to around 20 billion. We continue to guide for constant currency group EBITDA growth of around 6% to 47.5 billion in 2026. We reiterate our DTXUS EBTR guidance of 15.4 billion. Our guidance remains based on constant foreign exchange rates. And as usual, we have a page in the pendings in which we compare our guidance with the consensus adjusted for foreign exchange. Based on current exchange ratios, our DTXUS EBITDA guidance would be in line with 15.5 billion consensus. And with this, I hand it over to Christian.

Thanks, Tim, and hello from my side. As usual, let me quickly recap T-Mobile's strong second quarter results. And if we're taking a look at the numbers, according to US GAAP, service revenue grew at close to 9% or 8.9% on a year-on-year basis, despite the fact that we had prices increases that were rolling over. Obviously, the growth is supported by last year's acquisition, especially US Cellular. The core EBITDA grew at 11.7%, and that basically keeps T-Mobile well on track to achieve their ambitious financial targets. Account growth, as you know, grew at 277K, and the ARPA was up 2% on an annual basis, and Tim talked about the lower churn on the postpaid phone. Let's move over to Germany, which I think had a solid quarter. Total revenues grew at 3.7%. Obviously, that sequential acceleration is largely due to the World Cup-related non-service revenues. This quarter's adjusted EBITDA grew at 2.7%, which is very consistent with the previous quarters. For the next quarter, we expect the EBITDA to come a little below, whereas the fourth quarter will be above that 2.5% to 2.7% range. So the full-year guidance of 11 billion EBITDA is fully intact. So mobile service revenues accelerated as well, sequentially to 2.4%, so we're basically trading at the upper end of the guidance cord of 2 to 2.5%. Same is true for fixed line service revenues, they also accelerated. You see, and we'll get into this later on, there's a slight increase in broadband revenue growth, but it was also supported by some, I would call it, lumpy IT project business. As you can see on the next page, broadband revenues is now basically accelerating. We had 1.6% in the first quarter, 1.9% in the second quarter, and we only had a small contribution from the back book price increase in the second quarter, but this effect will increase in the upcoming quarters, and therefore we expect that the broadband revenue growth will further accelerate in the second half of this year. Wholesale service revenues obviously declined because the price increases from the previous years, especially from last year, were rolling over. We don't anticipate any further deterioration. What we expect is that we basically cover volume losses largely through upselling and upper growth, either upselling copper or fiber infrastructure. So taking into account that we had solid growth in wholesale over the past two years, I think we're well on track to meet our guidance which we have given at the CMD which is basically stable revenues. Let's move over to the fixed KPIs and let me start with the broadband customer losses. You see that we basically lost 20,000 customers this quarter. This is very much the same number which we had a year ago and it's largely explainable through price-related churn. So far, and that's the good news about that churn, the churn, the actual churn is much lower than we anticipated in the business case. And we expect this to moderate out in the third quarter and to normalize in the fourth quarter, which will be a big driver also for the accelerated broadband revenue trends in the second half. We have many initiatives to improve our broadband performance. I think the most important one is fiber. And you see that we've seen an 18% increase of fiber net adds on an annual basis and an 11% increase of our fiber penetration. That is obviously not holding us back to continue to push on the renewed strategy, both in SDUs and MDUs. And we're tracking well with an accelerated growth momentum here. Finally, on TV, we're seeing steady growth in triple play and also in contracted OTT. So over the first half, we basically added 200,000 TV customers. And on top, throughout the successful World Cup coverage, we welcomed roughly a million additional non-contracted OTT customers. It's now up to the go-to-market teams to retain as many of those customers as possible. So, next page, 18, we're seeing the mobile KPIs. I think what you see, especially on the growth on volume or on data usage, that very much reflects our unlimited propositions which we introduced a year ago. Moving over to Europe, and Tim called it a clockwork. I would call it a Swiss clockwork. It's really phenomenal what they're providing. The reported revenues grew at 1.5%. The organic service growth was 4.1%. And actually, you saw steady growth across mobile, across fixed, and across IT. The reported revenues were impacted by three factors. Obviously, we had a deconsolidation of Romania this year. We had a planned unwind of wholesale transit revenues, and that was somewhat offset by the very strong Hungarian currency, the foreign. Organic EBITDA growth was accelerating to 4.1%. We're fully on track with our full year guidance. And the difference between organic and reported EBITDA is also related to the strong Forend, which we're happy to see right now in this given year. So on the commercial performance, you see a very steady performance across all four categories. Nothing to basically explain here. T-Systems, I think, They posted a healthy year-on-year growth when it comes to revenue and EBITDA. They're well on track to hitting their CMD targets. The order book was due to phasing a bit slower, but we expect a much stronger second half and therefore also growth over the full year. Tim talked about this. T-Systems was able to secure two really important flagship contracts. One is Volkswagen, where we're going to build and operate Volkswagen's global private cloud network. And in April, we have been awarded together with SAP to develop The Central Citizen App and that shows that we are really well positioned when it comes to digital sovereignty and that T-Systems is at the center of what's currently important on digitalization and sovereignty here. So that concludes my operational review and I move over to the reported financials. So what you see is we had some headwinds coming from the dollar but still you see that in the second quarter EBITDA growth at seven and a half percent Adjusted Earnings almost close to 13% this quarter. On the free cash flow, you see that free cash flow was up Thank you very much. Next page, as always, you see our NetDap development, left-hand side without leases. It increased by roughly 5 billion on a year-on-year basis, on a quarter basis. This is largely driven by the DT and US shareholder remuneration. And you see also on the leverage ratios that including leases, we're tracking well with 268 and without leases on 2.3. And with that expanded share buyback program here on the DT side, we still will meet a leverage target which will be below 275. I think that completes my review and we're opening up for Q&A.

Thank you very much, Tim. Thank you very much, Christian. We will now begin the Q&A session. If you would like to ask a question via WebEx, please use the raise hand function. Should you wish to withdraw your question, simply click the raise hand button again. If you're joining by phone, please press star three and unmute your line. You press star six. To withdraw your question, please press star three once again. I will announce your name when it's your turn to speak. As usual, we would appreciate if you could limit yourselves to two questions. Please also note that you will need to mute and unmute your line manually. With that, let's begin. And I think the first question is from Robert Grendel, Deutsche Bank.

Robert? Thank you, good afternoon, and great going on the clear view expressed about your own equity value today. Does buying back more of your own shares tilt your view on not selling into the TMUS buyback, or is that an entirely separate decision dependent on the TMUS share price? I think, Tim, you confirmed you'll continue not selling even with the new buyback. Is that right, at least for this year? My second question is, there was some press recently that Celnex had been in touch with GD Towers about a deal. Any comment on that? I think at the CMD you said that something could be done on towers. What's your latest thinking there? Presumably you think your towers are worth more than public multiples. Thank you.

Robert, let me answer the first question. First, it's completely independent decisions. One has been taken care of on the T-Mobile US board level and the other one here on the DT board level. I think the scheme is quite comparable. You see that T-Mobile is now trading at, let's say, roughly 175. I think we think we should take advantage out of this, let's say, volatility, and therefore we expanded that share buyback program back into Q2 by up to 3.6 billion. And same holds true for DT. So I think if you take a look at the share price in which it traded over the course of this year, we were trading from above 34 to below 24. And obviously, if you compare this against our, let's say, long-term EPS multiple, we see there's opportunities to actually have an accretive share buyback and buying undervalued shares to a larger degree. So this is, as I said, independent decisions. And yes, I can confirm that we're not selling into the share buyback of T-Mobile US over the course of this year.

Christian, maybe to add one sentence here, by buying back our shares, we even buy into the profitability of the T-Mobile US stock and we believe in the US stock and that is why we have already built, you know, 55% of the stock and it's ongoing. Thank you very much. This is better than any investment which we can do in these days. Secondly, we have shown 2% growth over the last five, six years, more than all our European peers, but we're trading with a discount to the multiple of our European peers. And therefore even this is not reflected in our value. Another second reason to buy. And the third one is the creation for our EPS, which I mentioned already in my speech. Third argument, there's so much argument that our company is undervalued and our performance going forward is even supporting this on a mid-term and long-term perspective, that we took this very confident, clear message to significantly increase our share by BRAC program here in Europe by 3 billion. Let me answer the second question. What is the last thinking on that one? To be honest, we are not commenting on any M&A speculations here. In principle, we are always open-minded for good opportunities here, but there is nothing I can communicate. We are very happy with our assets of today. And therefore, to be honest, this is something where you have to ask Celnex or Digital Bridge. I cannot comment on this.

Thank you very much. Thank you. Thank you. Thank you, Robert. Thank you, Tim and Christian. So next we go to Carl Murdoch-Smith at Citi, please.

That's great. Thanks, Hannes. Two questions from me. Firstly, one of the reasons for the potential weakness in the share price is concerns about satellite. You just talked about your investments to maintain market leadership. SpaceX earlier this week made comments that it's not out of the question that at some point Starlink will deliver a majority of the world's internet. and talking about that on a 10-year timeframe and also stating that it believes its service will be better than yours in the US. I'd love to hear your thoughts on those comments. And then secondly, just on the German EBITDA phasing, Christian, that you mentioned, can you just expand a bit more on the reasons and potential quantum for the delta in the Q3, Q4 phasing on German EBITDA growth? Thank you.

By the way, the first, you know, we take SpaceX, you know, ambitions very seriously. That's the first one. Satellite connectivity will expand the market and improve coverage in places especially where terrestrial economics or geographical things are challenging. No question. T-Mobile, by the way, and Deutsche Telekom, we are already well positioned to integrate satellite capabilities where they improve the customer proposition. We have a Gen 1 deal in the US, we have a Gen 2 deal for Europe, and we are ready to integrate that direct to device. So therefore, you know, this is definitely something which, from our proposition, always best connected, is something which we consider. At the same time, High capacity terrestrial networks as we are providing them, they retain significant structural advantages in dense markets, no question. Capacity, indoor coverage, latency, simultaneous usage and the cost per gigabyte are advantageous compared to satellite services. The right answer for us is not to dismiss the technology. For us, it is to keep, let's say, extending our own advantages against any other technology. This is the spectrum leadership, which is critical, network density, which is, I think, the most important one, Distribution for our brand and the customer relationship which we have built. And then the financial capacity, you know, on developing the networks in the way how we're doing it. So therefore for me, I can tell you there are a lot of announcements. To be honest, I'm a little bit irritated how the market is reacting on some of that one. Yesterday we heard something about Femto. Guys, we had a Femto discussion years ago, remember that? And we looked it up whether this is an alternative and we dismissed this opportunity for good reasons from a technology perspective. And suddenly this is becoming a new kind of substitution risk. We don't see that. Thank you very much. But nevertheless, you know, it is not my money, it's your money. But we are doing our business and we are convinced that there is no substitution risk.

Okay, on the second question, Karl, first of all, this is related to cost phasing, nothing else. So the revenue trends, as I said earlier on, we expect to be strong both on the mobile side, but also on the broadband side, where we expect an acceleration of broadband revenue trends. But this is a phasing effect which you also had to a larger degree, to be very clear, in 2025. Remember, we had almost no EBITDA growth in 2025 in Q3 and then it bumped up again. That will be not that dramatic this year, but we will trail below the 2.5% in Q3 and we will trail above 2.5% in Q4. Okay, thank you, Christian.

Next is Josh Milt at BNP Paribas, please.

Hi, guys. Thank you very much for taking the question. I wanted to come back to some of Tim's opening remarks about the relationship between DT and TMS. without specifying any press reports because from the outside it looks like with your ownership stake the ability you have to participate or not participate in the buyback and the very strong working relationship between your European and US teams that the partnership works very well. So the simple question is, is there anything we're missing or any new opportunities that you're looking at working on that the current corporate structure doesn't allow you to do or frustrates would be the first question. And then on the second question, Taking it down to Germany, we saw, as expected, slightly weaker net ads this quarter following the back book price rise earlier in the year. From your perspective, are we now through the peak churn of initial customers responding to that back book price increase? And how do you see the front book price competition in German broadband at the moment? I think there's been a few more promotions across the board in that market. It'd be great to hear your thoughts there. Thank you.

So let me start with the second question on the net ads. As you said, rightfully so, we will expect that the churn-related net ad losses will moderate in Q3 and will basically be normalized in Q4 because then there is no chance for customers to actually terminate their contracts. I think the good element about what we're seeing right now is that the initial assumption of the marketing and sales teams were way more negative than what we see as actual churn. So the churn is significantly lower than we anticipated it to be, but the trend is actually in our favor, moderating in Q3 and normalizing in Q4. And on front book price competition, I think everyone is a bit promotional. We are promotional. The other guys are promotional. But structurally, I don't see any kind of significant change. I think everyone's talking about value. So let's prove this pudding. I think we have shown that with our back book price increase and also with the front book price increase last year that we're focusing on value and I think that's the only way to kind of getting into growth in the broadband market because we don't have hardly any volume growth in that market.

Look, with regard to your question on the relationship, look, we have a clear ownership in the US. We have a financial consolidation and control. We have a governance which is well established with, let's say, The amount of board seats we are having and the veto rights which we have as a shareholder. And on the operational management, on the day-to-day decisions, being in pricing, customer propositions, network execution, marketing, all these kind of things, I can tell you it is anyhow a philosophy in the group Thank you very much. When it comes to strategic alignment, look, we are always acting as two groups and two groups are always acting as two groups, you know, and that means whenever, for instance, we are developing a software, you know, like the one app, we have a third party transaction. So, look, yes, we are collaborating, but it is coming with complexity, there is no question, because we have to go through the board, we have to go into the audit committee with each of the transactions, with each of the joint activities, because we have to file third-party transactions. Second, you know, in some areas it's not easy. I can tell you the Apple account, for instance, is dealt, you know, not jointly. It is dealt from two companies independently. So in some areas we are not able to leverage our procurement activities these days. But these are minor areas. When it comes to the big strategic things, we can really work together in a good way. Sometimes it's a bit complicated due to the two entities which we always have to consider, but these are the limitations which we have. I think we're on a good track to get all our interest and all our strategic ambitions realized in this structure which we have, in the trust we have built between the teams.

Excellent. And surely T-Mobile's share price also, you know, over the value creation in the US, the fact that it's the most valuable telco in the world, I think bears witness to the success of our situation. But the next up is Akhil Dattani at JP Morgan.

Hi, good afternoon. Thanks for taking the questions. The first is just on data centers. Tim, you've discussed in the past your views around the AI Gigafactory project from Europe and some of your concerns with some of the elements of that. Now that we're getting the process of now submitting proposals, could you update us as to whether those have been addressed, where you stand on that? And also more broadly on data centers, you talked a lot about Thank you very much. Obviously, it's a strong signal to the market that you believe your stock's undervalued. But I guess one of the tricky elements to the debate is we're debating something very long duration that's very hard to quantify. Now, you gave us some helpful color on why you think satellite risks are misunderstood and maybe overplayed. But as you think about business planning going forward, how do you think about routes to growing and protecting your moat more strongly? and at the same point what sort of things can you do to disrupt yourself as you think about the opportunities it creates? So not just what are the defensive tools but also offensively what can you do here to create more value?

Wow, good questions. Let me think on the answers. Now, the first one, I'm talking about the data centers. Our ambition is to grow our data center business in line with the demand which we see for sovereign, secure and AI. Thank you very much. and we were maybe too fast on giving them away we should have even you know from a pricing be more aggressive but anyway um we are where we are we learned on this one so this is something we we have more challenges by the way um with the RTX chipsets you know to sell them but nevertheless you know um a highly and good utilization of our and Industrial AI Cloud in Munich. So we are thinking about expanding this. There is a capacity of another 20,000 GPUs. I was in the valley with Ferri recently and we discussed, you know, how to get the right amount of chipsets there to fulfill that. And on top of that, we have seen the documents for the EU Gigafed tender, where we are now assessing our participation. To be honest, you know, I was very critical about the document. At a glance, I can tell you there were significant improvements in this from a pricing perspective. It is not anymore, you know, one price. It is now market related. It's not a minimum commitment for a gigafactory. It is going in steps, being a smaller or bigger one. I think, you know, it's around 150 megawatt they are talking about. So I've seen that, but to be honest, it's a little bit too early. We have just started looking into this one. It's one year, one week old, this document now. We haven't taken the decision. The principle of what we have laid out, doing this with a financial partner going forward, splitting the real estate and the infrastructure and the cloud, the idea of saying we do not want to be a host for frontier models alone. We want to have an added value with a cloud service sitting on top of that with an orchestration layer, which is providing the customer needs. The idea of building a full stack which is sovereign with kind of local basis and even the discussion about maybe some of the big frontiers models who want to expand into a sovereign ecosystem. What does that mean? From a distillation perspective, from a kill switch perspective, from a weights perspective, these are discussions which are ongoing with the frontier models. But to be honest, you know, I cannot give you a final answer on that one. But I hope that the signal of today is that we are not going into any kind of stupid tenders or stupid index if we are not able to get decent financial returns. I'm always surprised that people, shareholders, after following me now for almost 20 years in the role of the CFO and the CEO, that you do not understand how I'm thinking. I'm not tolerating that any business is not making its profits. I'm not tolerating that any business is not making its return on capital and plights. And this is true for the historical business. It's true for our connectivity business. It's true for every segment. It will be true for TIS systems. And I can tell you it will be even true for the gigafactories or for data center capabilities. We are not going into any kind of stupid politically pushed transactions. You know, we will only go into this transaction when we make decent returns on that.

Let me try to start with answering that second question, which is a very broad one, Akhil. First of all, let me rest assure you that decision that we're expanding the share buyback was not an in-year decision. It also reflected what is needed in the future, in the upcoming years, and whether we can afford this yes or no, and we will not compromise on any investment plans which we had, or, for example, on U.S. spectrum auctions, which are important, whether it's being the upper C-Band or the 2.7 GHz spectrum, which, for me, is one of the offense plays I would allude to. Secondly, what you've seen in the U.S. is they're branching out from the core business, right? We introduced, I think, businesses in the ad space, and they were also talking about entering the financial services market, so that is kind of adding new additional growth flags. I think on the European side, we are using AI currently very broadly to drive efficiencies and to be less dependent on people to run this organization. And we're also, I think in Europe, we're making some progress on global scale. So for example, we will have one transport network across the European countries. We have basically finalized a big tender in order to secure memory chip supply across all European countries. We have now moved from customer-centric measures in order to measure the performance of a network towards technology-centric measures towards customer. We started off with that in the mobile space. We will expand this to TV and broadband. So I think these are the lines where we're experimenting and where we're trying to figure out whether it's either defensive move if it's efficiency or whether there's additional growth opportunity for us being at ads or being at financial services.

Look, and Achille, one last sentence, even, you know, reflecting. It is, you cannot look on a share-by-back isolated from the needs for the operations. We have a need to invest in spectrum. We have a need to sustain our competitiveness on the fiber and the broadband business. We have a need to always be leading on the mobile networks. We have a need to look for future investments, maybe even in the area of data center capacities. And we have the need to look on our shares. These are all investment needs and we have to do and we look to the mix. But this volatility and this This discrepancy between the inner value and the growth prospects of this group forced us this time to take a decisive action to buy back this stock. This is a signal which we are doing. Now, that doesn't mean that we are now going away from our operations or from our business. The opposite is the case. The luxury which we have compared to all the other telcos is that we have the money. We have an A- rating. We have a very, let's say, solid financial reserve in our group. And that is why we took this decision right now. It is not that we are cannibalizing or that we are sacrificing something from our operational perspective. 18 billion investments this year are confirmed.

Great. Thanks, everyone. And next up is Paul Sydney at Bernberg, please.

Thank you very much, Hannes, and good afternoon, everyone. Just two questions for me, please. The German price increases you put through in H1 seem to have landed really well. You've got the value over volume strategy. I was just wondering, does this give DT more confidence to potentially be even bolder in terms of back book price increases? For both broadband and mobile, I mean, if we take a step back, everyone's getting a gold-plated service from you for pretty much one euro a day, which feels pretty ridiculous, in my opinion. I'm sure you probably share the same view, but just getting your thoughts on that. And just going back to SpaceX, I know we touched on it earlier, but I don't want to get into any details, but given the more disclosure we've had post the IPO and the Q2 results earlier in the week, Has anything surprised you, either positively or negatively, on the increased information we've had from them around the industry, US, Europe? Just be really interesting to get your thoughts. Thank you.

Okay, look, on the first thing, you know, we have increased our price by two euros per month on the customer base, affected something like 5 million or 4.9 million customers out of 15, so almost a third. And we were expecting a little bit of churn, which you have seen this quarter. To be honest, we are very encouraged by the reaction of the market and the customer base. So it shows that this is possible. Kudos to Rodrigo, kudos to the German team who were brave enough to move in this direction here. Because it cannot be that we are constantly investing more into the broadband build-out, into fiber, having price increases and the like, but not being able to monetize this over time. I think it is a necessity not only for Deutsche Telekom, it is a necessity for the whole industry. And therefore, yes, I feel encouraged from this angle. It would be crazy if not. The second thing is SpaceX. Any surprises? Look, there are a lot of surprises in this world. Today we solve the indoor coverage, you know, and then I have a sleepless night saying, how is that possible with a satellite? And then I learned something which, you know, I would say challenged this from a technical perspective. Then we learned femtocells is the solution for a mesh network. Okay, to be honest, there are a lot of buzzwords which are, you know, flying around these days. So therefore, As I said, it's a great complementary service. I think the most attractive one is I think there is a need or there is a business for the broadband services. This is in rural areas Thank you very much. The capacity of overbuild and the amount of satellites is something which I'm surprised about. And what I'm more surprised about is not about SpaceX, it's about the catch-up of LEO and the developments which we see from the Amazon side or even the ambitions from AST. Thank you. Please, can I just have a very quick follow-up? Have you ever announced the uplift in ARPU when a customer moves to fiber in Germany? Apologies, I've missed it. No, we have not.

Okay, very clear. Thank you. I appreciate your comments. Thank you.

The pricing is very similar, right? But what you have to think about is part of the more-for-more ladder, which starts with 50, 100, 250, and then, of course, the super-vectoring comes to its end, so then you migrate onto fiber, and that's when you get the steady APU uplift that we are reporting.

And the APA uplift is something 2.8%, correct?

It's around 3% for consumers.

It's around 3% APA uplift. It's not only fibre.

No, it's not only fibre, it's just part of that overall upselling funnel which has, of course, many years to go. Okay, next up is... Thank you. Thank you, Paul. Next up is Polo at UBS, please.

Hi, thanks for taking the questions. I have two. The first one is, you previously flagged €15 billion of headroom at the DT level, where you could either increase your stake at TMIS, do buybacks at the DT level, or do other things. But how much headroom do you have left on your balance sheet, and would there be scope for further buybacks at the DT level in 2027? You also mentioned the US Spectrum Auction is an opportunity to extend your US network leadership position. But how do you think about your network position if you don't get any additional spectrum? And my second question is really just about Germany. So have you seen any notable changes in competitive dynamics for the mobile market? I know you referenced broadband. The only reason why I'm asking about the German mobile market is because 101 on their call earlier mentioned that they were removing all tariffs below €6.99 but also reducing the data allowance in their higher tier bundles. So I'm just wondering what you have seen in terms of German mobile. Thanks.

The answer to number one is very clear. By the way, we have talked about some headroom, we talked about our financial capabilities, and we have something in our planning which is always anticipated with regard to a spectrum which you don't know. So I can tell you one thing, we do not see us getting out of the auctions which are coming without any spectrum. We have saved money now in the AWS3 auction. We thought it would be more expensive for what we were aiming for. We got what we wanted for 300 million. We had significantly more money in mind, but nevertheless, this is good for the group. Nevertheless, I'm very optimistic that we are safeguarded and prepared very well for the upcoming auctions, both from the C-band and from the 2.7 GHz perspective.

Can I comment on this one? Please go ahead. Look, Polo, I think that was an implicit question, whether we need to buy additional spectrum. I'm not sure whether you're alluding to fixed wireless access. The 18 to 19 billion broadband customers, which is obviously a combination of fixed wireless and fiber, are calculated without any additional spectrum. So whatever is going to be the outcome of the upper C-band, and especially 2.7, obviously gives scope for more. But it's not necessary to basically achieve the targets which we have articulated. And for the buybacks for 27, I think we usually have a cadence. It's more around Q3, where we make a statement regarding dividend and buyback. So I think it's too early to talk about this today.

And then on the German competitive dynamics in the market, look, we have seen a shift towards more stable pricing in our German market. And we have even, you know, a list of price increases from all carriers after all this kind of price deflation we have seen previously. However, I can tell you the environment remains highly promotional. So there are always promotions out there and discounts and the like. 1&1 has made some changes as of July 2026. The lowest price is the 699, you're correct. Effectively, let's say, this is removing some tariffs below this price point. But to be honest, it's too early to say how the market is looking to this one. Other operators, by the way, O2, Vodafone, or even us, we have implemented price increases in the market. We have refreshed our portfolios with new tariff grids, higher entry level prices and with the more for more logic. So I would say despite this kind of development here, I do not see that the overall market, the relevant market is now going in the wrong direction. Please consider as well that 1&1 price developments, they're always taking place between Vodafone and between O2 have less affected us more than on the side of Kongstar or Refrank. So therefore, I would say it's not affecting the Telekom main brand that much.

Yes, and you saw our results, of course, in the quarter with the 218,000 phone net ads. And also, Polo, to your first question, we are not quantifying the residual headroom from the 15 billion, but the buyback announced today fits well into the framework. And, you know, without quantifying it, yes, there's some headroom left.

By the way, guys, it's funny to see. Oh, klar. We just got awarded 11, 11 awards out of 11. So, and there's another one coming for Europe for, you know, the best network in Europe, which is for the first time, you know, going to that. There is, and this is good. It's not all about price. It's about quality, quality. And we are quality leader. Is there any question in this room, Is there any question from the owners of that company that we are not leading by quality? And this is what we are monetizing. Look, I know I'm repeating myself, but this is our protection against 699.

Great. I think next up is David Wright at Bank of America. David?

Yeah, thank you. I hope you can hear me. I'm sorry no video today. I guess, Tim and Christian, I just want to do, I guess, respectfully but robustly challenge you. You've announced a significant increase to buyback, but you are part of the biggest economy in Europe and you have lagging fiber coverage versus all the European markets. Now, I do accept that the demand curve in Germany is low because the copper quality is high, but there are so many other factors here. It is the obvious defensive mechanism against satellite. I think you would agree that maybe focusing on urban build has meant that there is some sort of build in rural Germany that has impacted your customer share, has impacted pricing. So I'm just curious that you chose to focus on the lie back more than essentially critical Thank you very much. We've seen the French government sell a 5% of orange. The German government obviously is seeing a shareholding that is increasing with an accelerated buyback. I just wondered if there was any people conversations with them. Thank you very much.

Look, to the second question, to be honest, you know, we don't know, but if you ask me and my personal gut feeling here on this one, the German government feels very comfortable with their position today. I do not see then that they are selling out, you know, shares at that point in time. Whether they're participating or not, I cannot tell you. So this is something you have to ask them, but they like the shareholding.

Well, if you look at the ongoing share buyback, you can see actually how their share ownership has developed. And, you know, that answers your question. Retrospectively, it doesn't answer your question going forward.

And now on the second question, maybe, Christian, do you... Shall I start, or do you want to start? No, maybe I start with the general statement, then you go into the details of it, because there are a little... Because I think, David, I respect entirely your challenge. And to be honest, I feel this challenge in me every single day. Should we go for more investments in two businesses? Should we go for stepping up on data centers? Should we stepping up in fiber? But this time I'm very clear. It's time that we are now thinking about our stocks and thinking about our shareholders in this regard when the discrepancy between let's say the market and the stock is that big. Now, we cannot accelerate at that point in time the fiber expansion. We have already challenged that, you know, the take-up rates in the German market are low. We are well on track with the execution. And don't forget, last year we took the decision in the other way. We increased our investments into the fiber. So, you know, the small devil in me, you know, is always sitting on one side or the other side. And this time he was sitting and saying, I have to consider, you know, this discrepancy on the stock side.

Let me continue what you said. I think it's a fair challenge, David. But to be honest, we're feeling quite comfortable with the 2.5 million homes passed. And the reason being is, if you expand this by another 20%, it's not like that the cost is basically moving in a linear fashion. It's exponentially increasing because of the lack of construction capacity. And what we've done is, let me remind you, we have reallocated 400 million on an annual basis into fiber and predominantly by having a stronger SDU focus and a stronger connection focus. The full build-out of the MDUs is one of the highlights of the change of the fiber build-out strategy. That looks like it's getting traction. You see that actually we're increasing both the net ads and fiber as well as utilization overall. And I think so far we're feeling quite comfortable with the approach which we have taken, with the amount of spend which we have in fiber. And as Tim said, The volatility of the share price actually led to the decision that we basically prefer share buybacks right now over fiber and to spend even more into that fiber business case.

Thank you very much.

Okay, great. I think next up is James, James Ratzer at New Street, please. James.

Yes, good afternoon. Thank you for taking the question. So a couple from me, please. So the first one, I know you can't comment on any kind of M&A speculation at the moment, but there was an article in the press a week ago which said talks about doing a deal with T-Mobile might not have found favor with the US government for a specific reason around a CFIUS review and cash flow from the US business remaining within the US. So therefore, my question is, have you therefore ever had discussions With CFIUS about the dividends from T-Mobile USA coming back to Germany and whether there's a deal or no deal, does this potentially act as some kind of limit on the dividends that T-Mobile US could pay back to Deutsche Telekom over the medium to longer term? And then the second questions I had were on satellite, I'm afraid. So quick fire one is, are you one of the proxy or the parties that was mentioned in the proxy filing for GlobalStar? Are you willing to comment on whether you had interested in buying GlobalStar? Are you interested in buying MSS Spectrum or partnering with other satellite players? And in Germany, since we last spoke at the Q1 earnings call, it looks like SpaceX's access to the S-band spectrum in Germany is likely to be heavily reduced now down to a kind of maximum of 10 megahertz. How does that affect your relationship with them and ability to offer a D2C service in Germany and the rest of Europe?

Look, again, to question number one, I'm not, you know, commenting on any kind of speculations with regard to commentaries from the press. But nevertheless, I can say one thing. I have never ever, never ever heard about, let's say, a concern Thank you for watching. With regard to the second topic, look, the issue is, you know, by the way, there's even the second topic is, you know, what is happening with this EchoStar Spectrum, which, you know, SpaceX has bought. We thought, you know, they can use it. And then we have a Gen 2 service on our D2D devices. This is something which is new. And the second topic is, yes, there are discussions about, let's say, how much spectrum is going to be available for American or for independent satellite operators. To be honest, you know, this is a political decision. It is a European decision. It's a little bit, let's say, looks a little bit protectionistic if we do it that way. I'm always, you know, a favor of market dynamics here. But nevertheless, you know, we have to manage that. As we have said, you know, SpaceX is our partner and we would love to launch with them. But nevertheless, you know, if the spectrum is not with them, there might be others who are using it.

Okay, with that next we move to actually Andrew Lee. He will send his questions by email because he had connection issues. He asked satellite risk US versus Europe. There is a perception that U.S. fixed broadband telco is under more risk from satellite competition than Europe because of weaker broadband speeds and higher broadband prices. This could then produce more of a platform under the Starlink plans discussed yesterday to use those broadband receivers. Do you see the U.S. more at risk than Europe? Maybe to start off answering this, fiber penetration in the US is a little bit lower, but cable penetration is a bit more pervasive, and of course there's a very strong fixed wireless access connectivity that we provide, and fixed wireless is substantially and very significantly more powerful technology than satellites. We are very confident that fixed wireless is the superior technology in most locations, but of course there are locations in the US which are not served by terrestrial mobile networks and those situations can be interesting for satellite broadband.

I would add two things from the U.S. side on fixed wireless access. First of all, the download speed which we're having right now in the U.S. is significantly higher than you would have it on satellite. So therefore, the question is, is fixed wireless access still superior versus satellite? I would say yes. Two-thirds of our broadband customers, 5G broadband customers, are coming from top 100 markets. So we don't have an overexposure to rural areas where I think is a sweet spot for satellite broadband. And on D2D, I think Tim said everything. It's complimentary.

The next question from Andrew is why allocate capital DT rather than T-Mobile? I'm the last. You've used, sorry, I'm not sure if this is properly transcribed, a DT-XUS stop as a guide in whether there is most value, but the stop is trading towards more expensive end of historical range. This would historically have suggested the opportunity to invest in T-Mobile over DT, why not now? DT Mobile has been volatile too. But we have pointed out before, we are not participating in the T-Mobile share buyback this year. So we are effectively buying T-Mobile and now we are buying DT too. There's no contradiction. And of course, if you buy DT in terms of the share of the total profit, a large chunk of that comes from T-Mobile. So we're buying T-Mobile profitability to drive the accretion.

And the undervaluation of the DT stock compared to the US stock is higher, so therefore you know the investments into the DT stock is more attractive.

Okay, I think this brings us actually to the end of today's call. So thanks, everybody. Thank you very much for your participation and your continued interest in Deutsche Telekom. And should you have any further questions, please do not hesitate to contact our investor relations team. We wish you a pleasant day, a nice summer, and we look forward to speaking with you again soon.

Thank you, guys. Thank you. Bye bye.