By Emanuele Berro
Nov 5 (Reuters) - Deutsche Telekom is preparing for the arrival of Elon Musk's SpaceX in the U.S. mobile market, with Chief Executive Tim Hoettges saying on Thursday investors were already pricing in lower long-term profitability for established wireless operators.
Hoettges said Deutsche Telekom had to assume SpaceX's entry into the U.S. mobile market would materialise, even though building a nationwide network would require significant investment and time.
"We have to assume that
it is coming," he told reporters.
SpaceX's push into mobile communications could pose a significant threat to Deutsche Telekom, whose main source of earnings growth is T-Mobile US.
Hoettges said declining sector valuations reflected expectations that a new entrant would erode profitability and intensify competition.
"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 expected a new rival to gain market share and increase pricing pressure, he added.
Hoettges said SpaceX could pursue a different business model from traditional telecom operators, but 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 German telecom operator reported on Thursday 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.
($1 = 0.8880 euros)
(Reporting by Emanuele Berro in Gdansk)
