How Deutsche Telekom is planning to accelerate growth

Deutsche Telekom

Deutsche Telekom plans to significantly accelerate its growth in the coming years. At its Capital Markets Day, the Group announced its targets for the period to 2024. Adjusted EBITDA AL is to achieve an average annual growth rate of 3-5 percent, revenue of 1-2 percent.

Free cash flow AL is to reach more than 18 billion euros by 2024. In the past financial year, it stood at 6.3 billion euros. All with a comparable composition of the Group and constant exchange rates.
“We step up our efforts,” said CEO Tim Höttges. “We want to outperform the strong development of the last few years and lead the Group into the future with sustainable growth.”

For the coming years, Deutsche Telekom has identified five key action areas and defined targets for them:

Turning customers into fans

Deutsche Telekom wants to be a leader in terms of customer experience – in mobile communications, in the fixed network, and in convergent product packages. Superior networks and best-in-class service are the building blocks for this.

With this approach, the Group wants to increase the number of households using product packages that combine fixed network and mobile communications in Germany, the Europe segment, and the Netherlands to over 10 million. In the United States, T-Mobile US is set to continue industry-leading customer growth.

Lead in B2B in Europe

Deutsche Telekom wants to be the leading digital enabler in the B2B market with integrated software-based solutions. On this basis, revenues with business customers in the Germany and Europe operating segments are to rise by an average annual growth rate of around 2 percent to 2024. In the United States, T-Mobile US wants to double its share of the business customer market.

A new level of sustainability

The Group tightened its climate targets back in April. Deutsche Telekom will become climate neutral in terms of its own emissions (Scope 1 and 2) by as early as 2025. From 2040, 10 years earlier than the original target, this will apply to the entire value chain (Scope 1, 2 and 3). The compensation for Board of Management members already contains components based on targets such as reducing energy consumption and emissions. In the future, this is also to be the case for management levels below the Board of Management.

Number one in fiber and 5G

Deutsche Telekom invests massively in the network build-out. The percentage of customers in Germany who can book a pure fiber line (FTTH) from Deutsche Telekom is to increase from the current level of around 5 percent to more than 60 percent by 2030. To this end, the build-out will be continuously driven forward. From 2024, more than 2.5 million FTTH lines are to be added per year. The 5G mobile communications standard is to cover 97 percent of the population in Germany by 2024.

Drive digitization

Deutsche Telekom will continue to digitize its business at all levels. This will fundamentally transform areas such as network technology, IT, and operations, increase agility and productivity, and cut costs. We expect 30 percent of purchases by customers in Germany to go via our electronic channels by 2024.

In addition to the operational action areas, Deutsche Telekom continues its active, value-driven portfolio management as in previous years. In light of this, the Group regularly assesses its investments for possibilities to further increase their value – currently with a focus on T-Mobile Netherlands and the tower portfolio. In both cases, without preconceived views as to an outcome and with no time pressure.