Deutsche Telekom AG has revised its profit outlook for 2025, predicting a more modest growth than analysts had anticipated, due to the ongoing price wars in European markets that dampened its growth in the previous year.
The company expects adjusted earnings before interest, taxes, depreciation, and amortization after leases (EBITDAAL) to rise by about 4.5% in 2025, reaching €44.9 billion ($47.1 billion). This forecast falls short of analysts’ expectations, which had predicted an adjusted EBITDAAL of €46.9 billion, according to Bloomberg’s compiled estimates.
Europe’s largest telecom operator relies heavily on its majority stake in T-Mobile US Inc. for most of its revenue and profits. While T-Mobile’s financial results were positive last month, analysts are concerned about slower growth in Germany and other European markets, where price wars and intense competition are expected to put a strain on revenues.
Deutsche Telekom’s shares dropped by 3.6%, falling to €33.71 at 9:14 a.m. in Frankfurt trading, despite gaining 53% over the past 12 months.
In Germany, its largest market outside of the US, Deutsche Telekom’s fourth-quarter adjusted EBITDAAL rose by 2.8% to €2.66 billion, which slightly exceeded analysts’ expectations of €2.65 billion. However, the company’s overall EBITDAAL for the fourth quarter rose to €10.6 billion, slightly missing the average estimate of €10.8 billion.
Telecom companies, including Deutsche Telekom, have been increasingly selling off tower assets in recent years. In 2022, Deutsche Telekom sold a 51% stake in its German and Austrian portfolio business, GD Towers, to private equity investors for €10.7 billion.
