Key facts
- Deutsche Telekom CEO Tim Hoettges said investors are already pricing in lower long-term profitability for established wireless operators.
- Hoettges said Deutsche Telekom must assume SpaceX's entry into the U.S. mobile market will materialise.
- Hoettges cited valuation losses at Verizon, AT&T and Deutsche Telekom over the past six months.
- Hoettges said satellite services alone cannot replace terrestrial mobile networks, especially in cities and indoors.
- Deutsche Telekom reported third-quarter earnings above expectations and raised its 2026 outlook.
- Deutsche Telekom plans a share buyback of up to €2 billion ($2.25 billion) in 2027.
Deutsche Telekom is bracing for Elon Musk's SpaceX to enter the U.S. mobile market, with Chief Executive Tim Hoettges telling reporters on Thursday that investors are already pricing in lower long-term profitability for established wireless operators.
"We have to assume that it is coming," Hoettges said, adding that building a nationwide network would require significant investment and time. He pointed to the valuation losses suffered by Verizon, AT&T and Deutsche Telekom over the past six months as evidence of the market's expectations. "If you look at the multiples that Verizon, AT&T and Deutsche Telekom have lost over the last six months, the expectation is simply that the three competitors in the market will be able to generate less profitability on a sustainable basis," he said. Investors also expect a new rival to gain market share and add pricing pressure, he added.
A SpaceX push into mobile communications would be a significant threat to Deutsche Telekom, whose main source of earnings growth is T-Mobile US. Hoettges said SpaceX could pursue a different business model from traditional telecom operators, but argued that satellite services alone could not replace terrestrial mobile networks, particularly in cities and for indoor coverage. Although T-Mobile was Starlink's first direct-to-cell partner, Hoettges said Deutsche Telekom wanted alternatives and did not want a monopoly in satellite services.
The comments came as the German telecom operator reported third-quarter earnings above expectations, raised its 2026 outlook and said it planned a share buyback of up to €2 billion ($2.25 billion) in 2027.