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On Thu, 10 Oct, 4:03 PM UTC
3 Sources
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Deutsche Telekom Looks to AI to Boost Revenue Growth, Trim Costs -- 2nd Update
Deutsche Telekom said it plans to accelerate growth in revenue and earnings through 2027, turning to artificial intelligence to boost its top line and trim costs. The German telecommunications group said Thursday that expectations of faster growth will leave it with 15 billion euros ($16.41 billion) in available funds by 2027. The company aims to use this surplus to either increase its stake in T-Mobile US or launch fresh buybacks, on top of a program of 2 billion euros it will carry out next year, dividend payments and investments. Deutsche Telekom has been looking to bolster its exposure to the U.S., a bet that helped it become Europe's largest telecoms company with a market value that rose about 63% since the last time it provided mid-term targets in May 2021 to some 133 billion euros. A merger of T-Mobile US with Sprint was completed in 2020, creating a giant that soon became the second-biggest U.S. cellphone carrier by subscribers but diluting Deutsche Telekom's stake in the enlarged business. The German company achieved majority ownership in the U.S. business last year, and had a stake of 50.4% at the end of June. Deutsche Telekom said AI would play a key role in its strategy in coming years. It is looking to tap into revenue opportunities valued at around 1.5 billion euros with additional products and services including AI offerings, phone insurance and payments. T-Mobile US last month struck a deal with ChatGPT maker OpenAI to build an AI platform designed to help it gain and retain customers. AI and automation will also help the German group to bring down costs, with savings of 700 million euros expected by 2027, it said. Deutsche Telekom expects net revenue and service revenue to grow at an annual rate of 4% between 2023 and 2027. The company's previous targets for the 2020-24 period called for annual revenue growth of 1% to 2%. The group's adjusted earnings before interest, taxes, depreciation and amortization and after lease expenses--a closely watched metric in the industry--is expected to rise by between 4%-6% for the same period. It had targeted annual growth of 3% to 5% in the 2020-24 period. Deutsche Telekom forecast adjusted earnings per share would rise to around 2.50 euros by 2027, ahead of analysts' expectations of 2.44 euros, according to consensus expectations provided by the company. Growth will be driven by the U.S. as the company projects revenue from the rest of its operations will rise by 2.5% to 3% through 2027, with adjusted earnings increasing by between 3% and 4%. The group said it plans to launch a new share buyback of up to 2 billion euros in 2025, building on a repurchase program of the same size it is carrying out this year, and to propose an increase in its dividend for 2024 to 90 European cents from the 77 European cents it paid out for last year. Deutsche Telekom has been trying to reduce its debt in recent years, but now expects its ratio of net debt to adjusted earnings to stay at the current level in 2027. Meanwhile, it plans to continue to invest in expanding its fiber networks and 5G network coverage in Germany and its other European operations in the next three years. Write to Najat Kantouar at najat.kantouar@wsj.com
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Deutsche Telekom Looks to AI to Boost Revenue Growth, Trim Costs -- Update
Deutsche Telekom said it plans to accelerate growth in revenue and earnings through 2027, turning to artificial intelligence to boost its top line and trim costs. The German telecommunications group said Thursday that expectations of faster growth mean it aims to have 15 billion euros ($16.41 billion) in available cash by 2027 to either increase its stake in T-Mobile US or launch additional buybacks. This is after taking into account investment needs and dividend payments, it said. Deutsche Telekom's bet on the U.S. market--where it completed a merger of its majority-owned T-Mobile US business with Sprint in 2020--has helped the group become Europe's largest telecoms company. The German group had a 50.4% stake in T-Mobile US at the end of June. The company said AI would play a key role in its strategy in coming years. It is looking to tap into revenue opportunities valued at around 1.5 billion euros with additional products and services including AI offerings, phone insurance and payments. AI and automation will also help to bring down costs as a percentage of service revenue by 2027, Deutsche Telekom added. T-Mobile US last month struck a deal with ChatGPT maker OpenAI to build an artificial-intelligence platform designed to help the telecom company gain and retain customers. Deutsche Telekom expects net revenue and service revenue to grow at an annual rate of 4% between 2023 and 2027. The company's previous targets for the 2020-24 period called for annual revenue growth of 1% to 2%. The group's adjusted earnings before interest, taxes, depreciation and amortization and after lease expenses--a closely watched metric in the industry--is expected to rise by between 4%-6% for the same period. It had targeted annual growth of 3% to 5% in the 2020-24 period. Growth will be driven by the U.S. as the company projects revenue from the rest of its operations will rise by 2.5% to 3% through 2027, with adjusted earnings increasing by between 3% and 4%. The group separately said it plans to launch a new share buyback of up to 2 billion euros next year and to propose an increase in its dividend for 2024 to 90 European cents from the 77 European cents it paid out for last year. Write to Najat Kantouar at najat.kantouar@wsj.com
[3]
Deutsche Telekom Targets Faster Growth Helped by AI
Deutsche Telekom said it plans to accelerate its revenue and earnings growth through 2027, helped by the use of artificial intelligence, and launch a 2 billion-euro ($2.19 billion) share buyback program in 2025. The German telecommunications group said Thursday that it expects net revenue and service revenue to grow at an annual rate of 4% between 2023 and 2027. The company's previous targets for the 2020-24 period called for annual revenue growth of 1% to 2%. The group's adjusted earnings before interest, taxes, depreciation and amortization and after lease expenses--a closely watched metric in the industry--is expected to rise by between 4%-6% for the same period. It had targeted annual growth of 3% to 5% for the metric in the 2020-24 period. Deutsche Telekom separately said it plans to launch a new share buyback of up to 2 billion euros next year and to propose a dividend increase to 90 European cents from 77 European cents. Write to Najat Kantouar at najat.kantouar@wsj.com
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Deutsche Telekom announces plans to boost revenue and earnings growth through 2027, with a significant focus on artificial intelligence to increase revenue and trim costs.
Deutsche Telekom, Europe's largest telecommunications company, has unveiled an ambitious plan to accelerate its revenue and earnings growth through 2027, with artificial intelligence (AI) playing a pivotal role in this strategy 1. The German telecom giant aims to leverage AI to boost its top line and trim costs, marking a significant shift in its approach to business operations and service offerings.
The company has set aggressive growth targets for the coming years:
At the heart of Deutsche Telekom's strategy is the integration of AI across its operations:
Deutsche Telekom's growth strategy also includes significant investments and shareholder returns:
Deutsche Telekom's bet on the U.S. market continues to be a key driver of its growth:
As Deutsche Telekom embarks on this AI-driven growth strategy, it aims to maintain its position as a leader in the telecommunications industry while adapting to the rapidly evolving technological landscape.
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Deutsche Telekom's CEO calls for increased European investment in AI and data centers to compete with the US and Asia, highlighting the need for digital sovereignty and economic growth.
3 Sources
3 Sources
T-Mobile US Inc. has announced ambitious financial projections for the coming years, including substantial free cash flow growth and increased dividends. The company's new business framework aims to capitalize on its 5G network leadership and expand into new markets.
3 Sources
3 Sources
T-Mobile announces impressive financial performance, surpassing its 2021 Capital Markets Day goals. The company sets new ambitious targets, increases dividend, and unveils a three-year AI plan.
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4 Sources
T-Mobile and OpenAI have joined forces to create an AI-powered customer service platform. This collaboration aims to enhance customer experience through advanced AI technology, potentially transforming the telecommunications industry's approach to customer support.
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10 Sources
Deutsche Telekom and Google Cloud collaborate to develop an AI-powered RAN Guardian agent, aiming to enhance network performance, reduce costs, and improve customer experience through autonomous monitoring and optimization.
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2 Sources
