Deutsche Telekom’s Union Breakthrough Offers Cost Certainty as Shares Drift Toward Year’s Low

The gap between Deutsche Telekom’s operational momentum and its stock price has rarely been wider. The shares closed near €26.94 on Wednesday, sliding 2.6% and edging dangerously close to the 52-week trough of €25.99. At that level, the equity sits more than 21% below the February high of €34.35 — an extraordinary discount for a company that has just raised its full-year targets and secured labour peace for the next three years.

The Bonn-based telecom giant now expects adjusted operating earnings of around €47.5 billion, with free cash flow topping €19.8 billion. Its US subsidiary T-Mobile is set to pay a quarterly dividend of $1 per share starting in the third quarter. A €2 billion share buyback programme has already retired more than 13 million shares since April, and the group reported that 12.7 million German households can now access maximum fibre bandwidth, with new projects underway in Gablingen, Amberg and Rhön-Grabfeld.

None of this has been enough to arrest the sell-off. The stock has lost over 11% in the past twelve months and slipped decisively below its 200-day moving average. With a relative strength index of 34.8, the shares are approaching oversold territory. On the chart, the €26 mark is now the critical support line.

Should investors sell immediately? Or is it worth buying Deutsche Telekom?

The most significant piece of news for the company’s forward planning may be the labour deal struck after a marathon 36-hour negotiation session. The agreement with ver.di covers roughly 60,000 employees and delivers a cumulative wage increase of €290 per month in two fixed steps, followed by a further 2.4% rise in the pay tables from mid-2028. Crucially for analysts and management, the contract rules out compulsory redundancies until the end of 2028, removing a major source of earnings uncertainty from financial models.

While the labour talks dominated headlines, Deutsche Telekom continued to push its network ambitions. 5G now covers approximately 90% of Germany’s land area, with 384 new mobile sites added in the first five months of the year alone and thousands more upgraded. The fibre rollout remains on track for nationwide coverage as part of a long-term capital programme.

The final step on the union front comes Friday, when ver.di’s tariff commission votes formally on the negotiated package. Approval would give the group 33 months of cost visibility on personnel expenses. The market’s attention would then shift squarely to whether the stock can hold the €26 support level — and whether the torrent of good operational news finally starts to be priced back in.