Deutsche Telekom reports another record year

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Deutsche Telekom AG improved its revenue slightly above the inflation rate in 2024 and roughly doubled its pre-tax and net profit. "Another record year for Deutsche Telekom," says CEO Tim Höttges. "We are growing in all business areas." 2025 is set to be the next record year for the German telecoms group.

According to Group figures, revenue climbed by 3.4 percent to 115.8 billion euros. Of this, 50.3 billion euros remained as EBITDA (earnings before interest, taxes, depreciation and amortization, +12%) and 26.3 billion euros as operating profit (EBIT, +26%). The operating cash flow increased by a good six percent to 45.5 billion euros. After deducting interest charges and adding the results of minority interests, Deutsche Telekom achieved a pre-tax profit of 23 billion euros. This is an increase of almost 92 percent.

After taxes, the Group was left with 17.7 billion euros. On the one hand, this is more than double the figure for 2023; on the other, it represents a decline in net profit. It depends on how you look at it. As of February 1, 2023, Deutsche Telekom sold 51% of its "radio towers" (passive parts of the mobile transmission systems) in Germany and Austria (GD Towers). This was reflected in earnings in 2023 with a capital gain of EUR 12.9 billion. If this one-off gain in 2023 is ignored, the net profit in 2024 is around 113% higher, i.e. more than twice as high. If it is not ignored, net profit has fallen by around a fifth.

Incidentally, the US subsidiary T-Mobile USA also sold its fixed network for one dollar in the comparative year 2023. However, this only led to a loss on disposal of four million euros in the books; in terms of the Group's annual results, this corresponds to a rounding error.

Higher debt

Deutsche Telekom's mountain of debt was 137.7 billion euros at the end of the year. While it was able to reduce its debt by ten billion euros in 2023, five billion euros were added again in 2024. That is the amount of dividends paid. The increase would even have been 3.6 billion euros higher if the Group had not sold shares in T-Mobile USA. (However, Deutsche Telekom has retained the majority stake in T-Mobile USA that it reacquired in 2023).

The T-Mobile USA share buyback program alone is reflected at Group level with EUR 10.4 billion. Dividend payments cost a further 5.6 billion euros. Spectrum rights cost EUR 3.2 billion in 2024, while new lease liabilities and other usage rights cost a further EUR 3.8 billion. This also includes the leaseback of the radio towers sold in Germany and Austria as well as parts of the US fixed network sold.

Germany: New cars need SIM cards

Deutsche Telekom AG generates less than a quarter of its turnover in Germany. In its home market, annual revenue will amount to 25.7 billion euros in 2024. This is an increase of 2.1 percent, which is roughly in line with the inflation rate. EBITDA has shrunk by the same percentage to ten billion euros. The operating result even fell by 6.2 percent to 5.7 billion euros.

There was strong growth in mobile phone connections, particularly in the prepaid segment. This is mainly because new cars are delivered ex works with a built-in mobile phone modem. This is how car manufacturers monitor their customers. Deutsche Telekom is pleased, as it has gained more than six million net prepaid connections in one year. At the turn of the year, the figure was 42 million (+16%).

But the Group brands Congstar and Telekom are also doing well in the contract customer business. 1.36 million additional connections represent an increase of 5.4% to 26.5 million at the turn of the year. This means a total of 68.6 million Telekom mobile lines in Germany (+12%).

The German fixed network, on the other hand, is not shining so magenta. The number of self-served fixed lines fell by a good one percent to 17.2 million, while the number of unbundled Telekom lines fell by a good quarter. There were only 1.9 million of these as of the reporting date. This contrasts with a slight increase in broadband connections (just under one percent) to 17.2 million, as well as healthy growth in television transmission via satellite and IPTV. At the end of 2024, 4.6 million Germans were paying fees to Telekom for this, an increase of a good seven percent.