Deutsche Telekom has announced a bold new growth strategy focused on integrating artificial intelligence (AI) and pursuing global economies of scale. The strategy is designed to usher in a new era of expansion, with the company forecasting accelerated growth over the next few years. The strategic integration of both an AI and data-driven business model is set to revolutionize operations and boost revenues, offering a promising future for the company.
Based on its 2023 financial performance, Deutsche Telekom projects an average annual growth rate of around 4% in net and service revenues through 2027. Adjusted EBITDA AL is expected to increase by 4% to 6% annually. These robust financial projections provide a strong foundation for the company’s future growth and stability.
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AI and Operational Efficiency
By 2027, Deutsche Telekom aims to generate more than EUR 15 billion in additional revenue beyond its investments and dividend payments. This financial flexibility could be used to increase its stake in T-Mobile U.S., buy back shares, or pursue other strategic opportunities. The group’s investments, excluding U.S. operations and mobile spectrum expenses, are projected to account for 21% of service revenues by 2027, while its leverage ratio is expected to remain stable from 2024 at 2.75 or lower.
Deutsche Telekom plans to accelerate revenue and earnings growth in the global B2B sector and within its subsidiary, T-Systems. Having averaged 1.9% revenue growth between 2020 and 2024, the company expects this to increase to 3%, driven by new contracts, expansion into the public sector, and growth in areas such as cloud, security, IoT, and AI. T-Systems will play a key role in differentiating Deutsche Telekom from its competitors.
Tim Höttges, CEO of Deutsche Telekom, stated, “We are initiating the next stage. In recent years, our strategy has made us the undisputed number one in Europe. We have achieved or even exceeded nearly all of our targets and are now worth more than all our peers on our domestic continent combined. We will build on this position in the future, for example, by further intensifying the use of artificial intelligence.”
The company’s ambitious plan underscores its commitment to remaining at the forefront of the telecommunications industry. In the coming years, AI will enhance operational efficiency and boost profitability.
