Deutsche Telekom investors are caught between a rock and a hard place. The Bonn-based group’s operating business is firing on all cylinders – its US arm has just raised its dividend, its AI-focused data centre is live, and full-year guidance has been lifted. Yet the stock continues to slide, pressured by speculation over a blockbuster merger with T-Mobile US that could dilute existing shareholders.
The shares changed hands at €26.93 on Thursday, leaving the stock more than 21% below its 52-week high and flirting with multi-month lows. Two separate forces are pulling in opposite directions: a looming labour vote that could remove a major uncertainty, and merger talk that is spooking the market.
$300bn Merger Jitters
Reports that Deutsche Telekom is exploring a full merger with its US subsidiary, T-Mobile US, have rattled the market. Such a deal would be valued at over $300bn and would likely be structured as an all-share transaction. The German government and KfW, the state-owned development bank, currently hold roughly 28% of Deutsche Telekom. Under an all-share merger, that stake would shrink to below 18%, according to analysts, stripping the state of its strategic blocking minority.
Management has so far declined to comment on the rumours, leaving investors to guess at the potential impact. The fear of sharp dilution has overwhelmed even strong operational news.
Operational Firepower
T-Mobile US, in which Deutsche Telekom holds a 53% stake, has raised its dividend to $3.66 per share. The payout provides a steady stream of income to the parent. Meanwhile, T‑Systems, the group’s IT services arm, has switched on a new data centre in Munich equipped with 10,000 high-performance Nvidia processors. The facility is dedicated to AI workloads and boosts Deutsche Telekom’s domestic computing capacity by 50%. Industrial clients have already begun using the servers.
The group further underlined its strength after a strong first quarter, raising its 2026 adjusted EBITDA target to €47.5bn. That figure now looks more secure given the progress on the labour front.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
Labour Truce Within Reach
On Friday, the ver.di tariff commission is due to vote on a new wage package covering around 60,000 employees. The 33-month deal would rule out compulsory redundancies until the end of 2028. In exchange, workers would see monthly additional pay rise by a total of €290 in two steps, and from June 2028 the base salary scales would increase by another 2.4%. Analysts estimate the total cost of the agreement at roughly 8.5%.
A positive vote would end weeks of strikes and give management a predictable cost base for the next two-and-a-half years. “A clear ‘yes’ removes a major operational headache,” one trader noted. “The focus can then return fully to fibre rollout and the US merger question.”
Technicals and Support
Despite the positive fundamentals, the stock chart remains under pressure. The 50-day moving average stands at €28.23, well above the current price. Relative Strength Index readings of 35.3 and 34.6 from the two reports highlight how close the stock is to oversold territory. The difference suggests the selling momentum has eased slightly, but the trend remains bearish.
Deutsche Telekom has been supporting its own stock through buybacks. Last week alone it repurchased 1.6 million of its own shares. That buying has helped cushion the fall, but it has not been enough to reverse the decline as merger fears dominate the narrative.
What to Watch Next
The tariff commission’s verdict is due later on Friday. If the deal is approved, the stock could find a near-term floor, removing one cloud from the horizon. Attention would then turn to the next major catalyst: second-quarter results, scheduled for 6 August 2026. Until then, the battle between strong operations and merger speculation looks set to continue.
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