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Deutsche Telekom AG ADR DTEGY

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Morningstar’s Analysis

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5-Star Price

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Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Deutsche Telekom and Tele2 Sell T-Mobile NL for EUR 5.10 Billion; Maintain FVEs for First Two Firms

Javier Correonero Equity Analyst

Analyst Note

| Javier Correonero |

No-moat Deutsche Telekom (75%) and narrow-moat Tele2 (25%), who jointly own T-Mobile Netherlands, or T-Mobile NL, have agreed to sell the entity to private equity firm Apax Partners for EUR 5.10 billion. Although the transaction price is higher than what we would have anticipated, it does not have a material impact on our valuations. Our forecasts were already considering the value of T-Mobile NL and the business as small relative to the size of Deutsche Telekom and Tele2; hence we are maintaining our fair value estimates for the latter two companies. 

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Company Profile

Business Description

Deutsche Telekom is Germany's incumbent telephone company and offers integrated telecommunication services, fixed and mobile, in several countries. Its U.S. business, T-Mobile, is among the largest wireless phone companies in the country, having recently acquired the fourth mobile provider, Sprint. Apart from Germany and the U.S., the company operates in other European countries like Greece, the Netherlands or Poland among others. The firm's strategy has been to increase its scale (Sprint acquisition), improve operations through digitalization and invest in its networks.

Contact
Friedrich-Ebert-Allee 140
Bonn, 53113, Germany
T +49 22818188880
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 221,909

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