Deutsche Telekom’s Fiber Optic Coverage Covers 11.8 Million Locations, with a Penetration Rate of Only 16.1%
At the third quarter 2025 performance press conference, Deutsche Telekom announced that its fiber optic deployment will continue to advance, but the user penetration rate is still low. Despite adding 1.7 million new locations in the first nine months of 2025, bringing the total coverage to 11.8 million, CEO Tim Höttges acknowledges that the actual user engagement rate is still at a relatively low level.
Fiber optic deployment and user growth dilemma
Although the addition of 155000 fiber optic customers this quarter is commendable, the penetration rate has only increased from 14.6% in September last year to 16.1%. At the 2024 Capital Market Day held in October last year, the company set a goal to increase its penetration rate from around 14% at the time to 20% by 2027.
During the conference call, Höttges expressed disappointment with the situation: “Many people are eager to criticize the lack of fiber optic deployment across Germany, but once the fiber optic is in place, the number of signatories is extremely limited, resulting in the inability to complete the fiber optic deployment work satisfactorily.”
Therefore, Höttges stated that the company’s future deployment focus will shift towards single family residential units with higher signing rates. The company also plans to pre connect properties of multi family residential units (MDUs), as complex approval processes and other obstacles make property connection work challenging in such scenarios. However, H ö ttges later emphasized in a phone call with investors that companies should not be expected to pay additional fees to connect individual properties to landlords.
Future strategies and AI applications
Höttges believes that the slow pace of promotion has become a thorn in the government’s side, and the authorities should take action to help increase the signing rate. He added that this may include committing to only using fiber optic cables or accelerating the approval process.
Looking ahead, the company hopes to add coverage to 2.5 million locations annually, including rural areas. The company also pointed out that by increasing AI applications, shallow mining, and process industrialization, it has successfully reduced fiber optic capital expenditures by 9%.
Deutsche Telekom is optimistic about its AI applications and their potential to save 800 million euros ($930 million) in non US markets by 2027. The company also hopes to meet the demand for sovereign infrastructure through cooperation with Nvidia. Chief Financial Officer Christian Illek stated during a conference call that the company is providing a solution to the ‘entire sovereignty issue’. He admitted to working with an American company for this, but believes that there is currently no local company that can replace Nvidia.
Equipment Safety and Financial Performance
When asked about reports that regulatory agencies may strengthen restrictions on the use of equipment from “high-risk” suppliers, H ö ttges pointed out that since the company has not used equipment from Chinese suppliers in its core network, he believes that the antennas from Chinese suppliers will not pose any security risks. He stated that Deutsche Telekom will comply with government regulations, but also pointed out that the current solution is more advantageous for the company. He also added that the company’s collaboration with Nokia on open wireless access networks has yielded “very satisfactory” results.
In terms of finance, Deutsche Telekom acknowledges that due to the economic downturn, the overall situation in Germany is severe, and its business to business operations are particularly affected. Illek also acknowledges that the broadband market is facing fierce competition from alternative network operators. The company is responding by increasing single connection revenue and has implemented price increase measures.
In the third quarter, Deutsche Telekom’s net revenue increased by 3.3% on an organic basis to 28.9 billion euros ($33.6 billion), while adjusted earnings before interest, tax, depreciation, and amortization (EBITDAAL) increased by 2.9% to 11.1 billion euros ($12.9 billion). Despite strong performance in the US market, the company acknowledges that revenue in the German region has been dragged down by the economic situation. The company also pointed out that factors such as the weakening of the US dollar, rising wages in Germany, and rising energy prices have all put pressure on EBITDA for this quarter.