Deutsche Telekom Targets Capex of 16.8 bn euros in 2024 Despite 5G Expansion

Deutsche Telekom has reported a 0.7 percent increase in revenue in organic terms in the third quarter of 2023, reaching 27.6 billion euros.
Deutsche Telekom Cell tower to go at Digital X 2023Despite a slight decrease in reported net revenue compared to the previous year (–4.9 percent), the company experienced growth in high-margin service revenues, which increased by 4.1 percent in organic terms.

This growth was primarily driven by strong performance in the mobile and broadband customer bases in Germany, the United States, and Europe, Deutsche Telekom said in its earnings report.

Customer Growth:

Germany: Deutsche Telekom experienced robust customer growth in its home market. The company added 96,000 broadband subscribers and increased its MagentaTV customer base by 51,000. The new mobile rate plans attracted 350,000 branded contract customers, solidifying their position as a market leader in mobile service revenues.

United States: T-Mobile US, a subsidiary of Deutsche Telekom, recorded significant customer additions, with 1.2 million postpaid net additions. The company also added 557,000 users for its fixed-network high-speed internet substitute product, reaching a customer base of 4.2 million.

Europe: The European segment showed positive growth with 223,000 mobile contract net additions, 76,000 additional broadband lines, and 52,000 more TV customers.

Capex : Deutsche Telekom managed to optimize its capital expenditure, reducing Capex significantly in both overall and spectrum-specific terms. Capex decreased by 28.3 percent to 4.3 billion euros in the third quarter of 2023, compared to 5.9 billion euros in the same period in 2022.

Capex before spectrum also decreased by 27.2 percent to 4.1 billion euros. This reduction in capital expenditure indicates efficient financial management and cost control.

Deutsche Telekom has revealed that its Capex for 2023 will be 16.8 billion euros. In 2024, Deutsche Telekom is targeting Capex of 16.8 billion euros indicating that there will be no growth in its investment.

Deutsche Telekom said there will be a slight increase in its Capex in Germany in 2023 from 4.4 billion euros in 2022. In 2024, Deutsche Telekom is expecting slight increase in its Capex in Germany.

Deutsche Telekom said there will be a significant decrease in the Capex of T-Mobile US in 2023 from $14 billion in 2022. In 2024, Deutsche Telekom is expecting stable position in its Capex in T-Mobile US.

Deutsche Telekom said its Capex in Europe will be stable in 2023 from 1.8 billion euros in 2022. In 2024, Deutsche Telekom is expecting stable Capex in Europe.

Business Developments:

Strategic Focus: Deutsche Telekom’s strategic focus on high-margin services and customer additions in key markets, such as Germany and the United States, has driven revenue growth. The company’s emphasis on mobile and broadband services has resulted in substantial customer base expansion, contributing to overall revenue.

Global Expansion: Deutsche Telekom’s growth in the United States, where T-Mobile US became an industry leader in customer net additions, showcases the company’s international expansion strategy. Additionally, the strong performance in European markets signifies the success of their regional growth initiatives.

In summary, Deutsche Telekom’s focus on high-margin services and strategic expansion in key markets has driven revenue growth and increased customer numbers. Efficient cost management and reduced capital expenditure have contributed to improved profitability and shareholder value, positioning the company for continued success in the telecommunications industry.

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