• Deutsche Telekom CEO Tim Höttges has presented the telco’s results for the first quarter of 2026
• DT is slightly raising its operating earnings guidance for full year 2026
• He stressed the importance of AI and how much time he is spending each day on AI-related developments
• Höttges addressed the speculation that DT might fully merge with T-Mobile US

Deutsche Telekom (DT) CEO Tim Höttges was in a sombre mood during his company’s first-quarter 2026 results call on Wednesday as he commented on the grim state of the world, noting that these are “difficult times, marked by uncertainty and widespread fears about the future across entire industries”, but he perked up when talking about AI and the telco’s numbers. 

Dressed in black with a magenta-hued ‘T’ logo the only nod to the telco’s corporate colours, Höttges provided a positive message about DT’s performance in the first three months of 2026 (Q1 FY26), building on its “record” full year results for FY25.

Indeed, he insisted that DT has “demonstrated very robust, very resilient growth in the first quarter. And we can look forward to the coming quarters with confidence”. (More on the financials later.) 

He also highlighted the role and impact of AI at Deutsche Telekom. He explained he dedicates “at least 20% to 30% of my time” to the topic every day and insists that DT “must and will take a leading role in utilising it”. 

“Because of [AI], we can actually catch up on skill deficits. It gives us productivity opportunities that we can utilise. It allows us to catch up with software companies that were clearly superior to us in the past. We can realise significant productivity gains. We can be even more competitive and free up funds to invest in infrastructure,” he added. 

According to the CEO, DT’s developers have significantly reduced the time it takes to produce code. “It used to take three months or more to release new software on the market. Today, we are ready in four weeks. And in some cases, just 24 hours, with 95% AI-generated code.”

In addition, “Our FragMagenta chatbot resolves 56% of all customer inquiries on first contact. Fully automatically, 24 hours a day. No waiting time… AI keeps us at the top when it comes to one-on-one customer contact. We use it to simulate conversations and practise navigating challenging situations. This improves our quality by 30%.”

The CEO stated: “There is no future without artificial intelligence. AI has become much more than simply a tool. It is the greatest gift of our time. The chance to reinvigorate the competitiveness of entire industries. We are shaping this unique momentum”, he noted, with investments such as the “AI factory in Munich [where] we generate computing power for Germany and Europe. We step up by taking responsibility and strengthening sovereignty.” 

He added that the AI factory, announced last year by DT and Nvidia and based in Munich’s Tucherpark, accounts for “50% of the GPUs in Germany that we have put into operation in one fell swoop. And the utilisation is excellent. The [Nvidia] Blackwell [GPUs] are fully utilised… We are now thinking about doubling this here”.

He also said DT will hold its first ‘AI’ Capital Markets Day on 5 October 2026, “a day where we will … show the examples and the progress we have made here”. 

Raising guidance and M&A speculation

Commenting on DT’s financial performance, the CEO said the group’s “very good start to 2026” means that it is now able to raise its guidance for the full year, and reflects the raised guidance recently announced by its subsidiary, T-Mobile US. 

“For adjusted EBITDA AL [earnings before tax, interest, depreciation and amortisation after leases), we had previously planned around €47.4bn by the end of the year. Now we are slightly raising this figure to €47.5bn,” he said. 

“For free cash flow,” he added, “we want to achieve more than €19.8bn. Here too, the forecast is slightly increased. And for earnings per share, we are planning for [an unchanged] €2.20. This is also a significant increase of 10% compared to the record result of 2025.”

In Q1 FY26, DT’s net revenue rose by 4.7% on an organic basis year on year to €29.9bn. Adjusted EBITDAaL increased by 7.5% to €11.5bn, while free cash flow after leases grew 0.7% to €5.7bn. The adjusted net profit was up 6.5% at €2.6bn.

In its home market of Germany, total revenues rose by 2.1% to €6.3bn and adjusted EBITDAaL increased by 2.5% to €2.69bn.

Here, the operator is also continuing to build out its fibre-to-the-home (FTTH) network and now passes more than 13 million homes. Although penetration remains fairly low at 17.1%, it has risen from 15.5% a year previously. The total number of households with an FTTH contract now stands at 2.2 million.

According to DT’s chief financial officer, Christian Illek, “you can see that we had a strong quarter in FTTH [when] we had an increase of almost 150,000 customers”. 

In the separate Europe segment, revenue increased by 2.1% to €3.1bn and adjusted EBITDAaL grew 3.5% to €1.2bn.

On the topic of Europe, Höttges also welcomed the recent publication by the European Commission (EC) of the long-awaited draft of new regional merger guidelines. Although he noted that it is “too early to judge if these new guidelines will boost European competitiveness significantly”, he said there are “positive” signals from competition commissioner Teresa Ribera. The EC has launched a public consultation inviting comments on the draft by 26 June 2026.

Elsewhere in the group, the formerly troubled T-Systems division is also continuing to improve, with a 2.1% increase in revenue to €1bn attributed to the enterprise services unit’s digital business. Adjusted EBITDAaL grew by 4% to €84m.

US powerhouse T-Mobile has already reported its results for Q1, when service revenues rose by 11.5% to $18.9bn and adjusted EBITDAaL increased by 12.9% to $9.1bn.

Not surprisingly, T-Mobile US featured during the presentation’s Q&A session but, as expected, Höttges was less keen to comment on rumours that the Bonn-based group is considering a blockbuster deal that would result in a full combination with its US subsidiary.  

“There’s nothing to report,” he said, noting wryly that anything he did say would only give rise to more speculation.  

“Give me some credit for being [at the] helm of this company for the last 15 years, being in charge of M&A since 2009. We are not making any kind of deals, stupid deals or bad deals,” he said. “We have a lot of credibility in the market with regard to why we’re doing things and when we are doing things, and when there’s something to announce, I will announce it, but not today.”

- Anne Morris, Contributing Editor, TelecomTV