Deutsche Telekom's Q1 numbers follow broader European trend

Deutsche Telekom this week became the latest European telecoms operator to post financial results that make for comfortable reading.

Mary Lennighan

May 16, 2024

3 Min Read

The German incumbent reported increases in revenue, earnings and net profit in the first quarter of 2024, buoyed by growth across its operations, its European businesses being particular highlights. It confirmed its full-year guidance, which includes some fairly ambitious growth targets, and upped its earnings and cash flow expectations for T-Mobile US. And it made some strong statements about its growth trajectory that are backed up by its financials.

"Deutsche Telekom is continuing to grow again this year," said group CEO Tim Höttges, in the telco's results announcement. "I would like to shine a light on the success of our national companies in Europe," he said.

The telco's Europe division, which includes operators in 10 markets outside of Germany – mainly in Eastern Europe – and accounts for just over 10% of group revenues, claimed record growth in EBITDAaL, earnings increasing by 8.1% year-on-year in the three months to the end of March to €1.1 billion. Revenue growth was also creditable at 5.7% organically to €3 billion.

Deutsche Telekom's €27.9 billion top line, which grew by 0.4% in Q1, or 1.6% in organic terms, is mainly driven by its operations at home and in the US though.

In Germany the operator posted a 2.6% revenue rise to €6.3 billion with earnings increasing by 3.5% to €3 billion; high-value revenue growth and cost-efficiencies made the difference to EBITDA, it said. It highlighted in particular growth in mobile service revenue and recorded 281,000 net adds amongst branded mobile customers, up from 274,000 a year earlier.

The telco also reported strong growth at its TV and fibre businesses. The latter brought in 93,000 FTTH net adds, taking its total above the 1 million mark. Deutsche Telekom is aiming to add 450,000 FTTH customers over the full year.

Across the pond, T-Mobile US reported a slight revenue decline, but service revenue was up by 3.6% to $16.1 billion and earnings increased by a sizeable 7.3% to $7.5 billion. The firm once again trumpeted industry-leading mobile customer additions, its net adds totalling 1.2 million in the three months, taking its base to just shy of 100 million.

Also of note is the growth in T-Mobile US's fixed wireless access (FWA) service, which recorded 405,000 new customers in Q1 taking the total to 5.2 million. That's about 50,000 net adds more than rival Verizon claimed in its first quarter report, incidentally.

On the back of its Q1 performance, T-Mobile US raised its adjusted EBITDAaL outlook to $28.6 billion for the full year, having previously guided for $28.5 billion. It also lifted its core EBITDA expectations by the same amount; both would represent a 6% hike on 2023.

All in all, its a solid set of numbers that comes as part of a broader trend across Europe. On Thursday BT reported positive full-year figures that showed it is making progress with its turnaround plan, while earlier this week decent numbers from Vodafone meant it can now legitimately claim the same. And last week's Q1 report from Telefonica was enough for it to boast about the success of its recently-begun three-year plan.

European telcos have found times tough of late, but while they are certainly not in a position to relax their transformation efforts, these recent sets of figures show there is light at the end of the tunnel.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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