Telco Chatter May 18: DT/Tele2 update, BT Global deal?, DT AI factory...

Research evidence excerpt

Telco Chatter May 18: DT/Tele2 update, BT Global deal?, DT AI factory...

end growth of ~20% y/y to

SEK 12.5/share is 14% above consensus, underpinned by leverage at 1.7x versus a 2.6-2.7x

investment grade ceiling. Additionally, we expect strategic continuity under new CEO

Nicholas Högberg. Tele2 is +18% YTD (sector: +25%), despite delivering solid Q1

numbers (here). Upcoming catalysts include potential guidance upgrades through 2026 and

further dividend upside as lower leverage post the Baltic TowerCo transaction allows for

>100% EFCF payout. We remain OW with a PT of SEK 212 (previously SEK 214). On

2027e, Tele2 trades on 18x PE and 7% EFCF yield. Within our base case, Tele2 trades on

2027e TSR yield of 8% (upside scenario: 9%) and 2030e TSR yield of 12% (upside

scenario: 14%).

BT – Revives talks over Global unit

BT has revived discussions about a potential sale or partnership for its international

operations, previously known as BT Global, according to Sky News. BT and its advisers

are planning to hold talks with companies including AT&T, Orange, and Verizon about a

possible transaction involving the division, which has been carved out of BT's Business

division and comprises operations in countries including Argentina, Brazil, and Canada,

providing corporate clients overseas with network-related, cloud, and security services. A

potential divestment would align with CEO Allison Kirkby's strategy of refocusing the

company on its core UK operations, which also includes a revival of the BT Mobile brand

alongside EE. Renewed talks come nearly a year after BT paused earlier negotiations on a

deal. (Source: Alliance News, Sky News)

DT – Mulls Munich AI Factory expansion

DT’s CEO Tim Höttges said the operator is "considering expanding" its AI Factory in