Feb 26 (Reuters) - Deutsche Telekom reported fourth-quarter core profit slightly above analyst expectations on Thursday, despite the impact of a weaker US dollar on its U.S. earnings. The Germany-
Deutsche Telekom Surpasses Profit Forecasts, Targets EU Data Center Funds
By Emanuele Berro and Danny Callaghan
Feb 26 (Reuters) - Deutsche Telekom beat fourth-quarter core profit expectations on Thursday, helped by a slight recovery in its home market and a solid performance at its U.S. unit T‑Mobile, but issued a mixed outlook for 2026.
Deutsche Telekom's Strategic Moves in AI and Data Centers
The German telecoms group is stepping up its AI efforts and has launched one of Europe's largest AI factories in partnership with Nvidia. It is also in talks with unlisted retailer Schwarz to submit a joint bid for billions of euros of EU funding to build AI gigafactories.
Ferri Abolhassan, head of its services arm T-Systems, said on a media call that Deutsche Telekom sees itself as Europe's first provider of private and sovereign cloud services, and aims to increase its T Cloud Public revenue by 20% in 2026.
But Chief executive Timotheus Hoettges criticised the lack of clarity on the EU's planned funding: "We were expecting a tender from Brussels since long, and now apparently it has been put off to May, so I would hope that things speed up and politicians take action".
Challenges in EU Funding and Resource Allocation
He added it is "increasingly difficult" for Germany to combine resources in such a way that guarantees a minimum level of utilisation for data centres, saying there had been "no real reaction" by the government to high domestic energy prices.
"Deutsche Telekom doesn't need a gigafactory, Germany does," he added. "And if politicians do not provide a framework for that, then we will not invest in this kind of project."
The German government was not immediately available for a comment.
Financial Performance and Future Projections
The Bonn-based telecoms operator reported fourth-quarter adjusted earnings before interest, taxes and amortization after leases (EBITDA AL) of 10.8 billion euros ($12.8 billion), above a company-provided analyst consensus of 10.7 billion euros.
The group estimated a better-than-expected core profit of 47.4 billion euros for 2026 but free cash flow after leases of 19.8 billion euros was slightly below analyst consensus.
Its shares were down 0.3% at 1355 GMT.
($1 = 0.8462 euros)
(Reporting by Emanuele Berro and Danny Callaghan in Gdansk. Editing by Matt Scuffham, Alexandra Hudson and Mark Potter)
