Deutsche Telekom maps out its next wireless moves

The U.S. segment generated €20.5 billion in revenue for Deutsche Telekom in Q3, up 9.1% year-on-year, while revenue in Europe increased 4.2% to €3.3 billion

In sum – what to know

Financial growth continues – Q3 revenue increased 7.5% to €31.1 billion and net profit rose 13.8% to €2.8 billion. Deutsche Telekom raised its 2026 adjusted EBITDA AL and free cash flow AL forecasts.

Spectrum and SpaceX – T-Mobile US is preparing for further spectrum investment in 2027, while CEO Tim Höttges estimated that SpaceX would need at least €200 billion to compete in terrestrial connectivity.

RAN strategy advances – Deutsche Telekom is developing its own RAN controller and reselling the software to Vodafone and Telefónica in Germany.

German telco Deutsche Telekom is preparing for a changing wireless landscape, with plans for increased spectrum investment at T-Mobile US, a joint application for satellite spectrum in Europe and continued development of its own radio access network (RAN) controller.

The company’s Q3 2026 earnings call also highlighted the company’s chief executive officer Tim Höttges’ assessment of the potential challenge posed by SpaceX’s ambitions in terrestrial connectivity.

The strategic comments came as Deutsche Telekom reported a 7.5% year-on-year increase in third-quarter revenue to €31.1 billion ($34.6 billion) and a 13.8% rise in net profit to €2.8 billion.

The United States remained the largest contributor to group revenue. The U.S. segment generated €20.5 billion, up 9.1%, while revenue in Europe increased 4.2% to €3.3 billion. Germany revenue grew 3.9% to €6.6 billion.

Deutsche Telekom raised its 2026 guidance following higher expectations at T-Mobile US. It now anticipates adjusted EBITDA AL of around €47.6 billion, compared with its previous forecast of approximately €47.5 billion.

T-Mobile prepares for further U.S. spectrum investment

Höttges described forthcoming U.S. spectrum auctions as an opportunity for T-Mobile to strengthen its position in both spectrum and network infrastructure. In his remarks, he said T-Mobile had 380 MHz of high-quality low- and mid-band spectrum, which he argued would be difficult for competitors to match.

Spectrum will also take a larger share of Deutsche Telekom’s investment allocation in 2027. During the Q&A with analysts, Deutsche Telekom’s management confirmed that the U.S. C-band auction was an important factor in decisions about the size of the company’s planned share buyback.

Höttges said the proposed buyback of up to €2 billion in 2027 needed to be balanced against investment in the core business and strategic opportunities, particularly spectrum in the U.S.

The company is also pursuing a satellite-spectrum initiative in Europe. Deutsche Telekom is exploring a joint bid with three other operators for mobile satellite service (MSS) spectrum. Höttges confirmed that the group intends to apply for 20 MHz.

He said the initiative was intended to avoid dependence on a single satellite operator and to structure access in a way that benefits the wider European telecom industry. He also noted that U.S. satellite operators, including SpaceX, could apply for spectrum in Europe, subject to the relevant security, resilience and regulatory requirements.

Deutsche Telekom assesses SpaceX’s terrestrial ambitions

Höttges said satellite services would not replace terrestrial mobile networks, citing capacity limitations and the challenge of providing indoor coverage. He nevertheless stressed that Deutsche Telekom takes SpaceX’s ambitions seriously.

The executive noted that SpaceX had acquired 76 MHz of spectrum and would need further spectrum and network infrastructure to compete in terrestrial connectivity. He cited T-Mobile’s 85,000 towers and said that renting tower infrastructure would still entail an estimated €20 billion to €30 billion in additional costs.

Höttges estimated that SpaceX would need at least €200 billion to enter the terrestrial telecom business at scale. He described two possible routes for SpaceX: building a network or acquiring an existing operator. Höttges said an acquisition could provide immediate cash flow, although it would offer less control over the value chain. He said he would personally favor the acquisition route. SpaceX has held talks with EchoStar about buying Boost Mobile or gaining access to the network Boost uses, according to a recent Washington Post report.

He also cautioned against viewing SpaceX as simply another mobile operator. In his assessment, the company is creating a new category of communications services by combining satellites, chipsets, data centers, AI, and mobile connectivity.

Deutsche Telekom develops its own RAN controller

The call also provided an update on Deutsche Telekom’s RAN software strategy amid discussion about a possible replacement of Huawei equipment in Germany.

Höttges said the company had no Chinese equipment in its core or optical networks. For RAN steering, Deutsche Telekom is developing its own controller to take control of the software layer. “We made good progress on developing that software,” he said, adding that the company was reselling the software to Vodafone and Telefónica in Germany to help recover its development costs.

On the prospect of a faster replacement of Huawei equipment, Höttges said he understood that a 36-month “rip and replace” requirement was “more or less off the table.” He warned that the broader replacement process could cost the European telecom industry €40 billion and delay investment in newer technologies, including 6G.