United Internet’s eSIM Bet: Turning Mail & Media’s 25 Million Users into a Mobile Growth Engine
Q2 2026 call: eSIM launch planned for Q4, AI-driven cost cuts accelerate, and CEO doubles down on IONOS valuation.
UTDI.DE · Earnings Call · 2026-08-06
The Steady H1 and the Quiet Catalyst
United Internet delivered an uneventful H1 2026 at first glance. The 1&1 segment lost 140,000 mobile contracts, but EBITDA still grew 5.1%. IONOS added 500,000 customers and revenue rose 6.9% (8.2% FX-adjusted). Mail & Media saw a 190,000 increase in pay accounts, pushing revenue up 8.4%. Management re-confirmed FY2026 guidance of €6.25B revenue, €1.45B EBITDA, and €600–650M CapEx. But beneath these numbers, the call surfaced something genuinely new — a concrete plan to weaponize the company's 25 million active app users for eSIM distribution.
The eSIM Pivot: From Trial to Q4 Launch
CEO Ralph Dommermuth outlined the logic: “we can do an eSIM within 3 minutes” — Unknown Executive, Executive · 2026-08-06 and plans to start in Q4. This is a tangible shift from the earlier stance. On the May 2024 call, the CFO described eSIM as “we are still in the trial period” — Ralf Hartings, CFO · 2024-05-11 and the plan is now clearly set to go live. The opportunity—selling SIM-only plans to the millions of pay accounts and free accounts that already use GMX and WEB.DE—represents a potential low-cost customer acquisition engine. Dommermuth also hinted at bundling eSIM with cloud storage, aiming at younger users who are not heavy hardware buyers. The portal network, already monetized through small screen advertising, becomes a distribution channel for core telecom services.
Today, 1&1 is mainly for contracts with cell phones, bundled. 85% of the contracts in 1&1 is on hardware. We have very few SIM only. And our discount brands nearly always only sell SIM only... And we are considering whether we could do more with the portals. The portal should have more range. And as they have so many apps, is it 25 million? We can do an eSIM within 3 minutes.
AI as the Efficiency Engine
A second new theme was the systematic use of AI to cut costs. CFO Carsten Theurer noted that headcount has fallen from 11,000 to 10,400 and will likely drop further. He described AI handling customer service calls through a concierge function, real-time agent assistance, and automated content generation. This is not just a futuristic promise; the company is already deploying phone assistant technology across its support operations. Theurer emphasized that AI-driven efficiency will compound over years, directly boosting EBITDA margins. In a prior call (March 2025), management had discussed AI as a growth tool, but here the emphasis on cost reduction is more explicit and quantified.
IONOS Valuation and Group Structure
Finally, the CEO made a pointed statement about IONOS' worth: “if IONOS keeps its figures today, if I had normal EBITDA factor 5 by next year, the share should be at 60, not 30.” — Unknown Executive, Executive · 2026-08-06 This is a clear signal that management views the market as underpricing IONOS, and it reinforces their reluctance to spin it off. In prior quarters, they consistently dismissed separation, and again in Q2 they affirmed IONOS' strategic role, citing its own datacenters and sales force as competitive advantages. The call also touched on the AdTech unit within IONOS; the CFO confirmed that clarity on its future will come within 12 months.
What Has Actually Changed
While the headline numbers were stable, the eSIM launch is a genuine pivot—it turns Mail & Media from a cash cow into a customer-acquisition machine. The AI cost-cutting program is a new efficiency lever, and the CEO's valuation comment adds fuel to the IONOS debate. For investors, the key takeaway is that United Internet is no longer just a holding company for mature assets; it is actively repurposing its user base and technology to drive growth and margin expansion. The next two quarters will show whether the eSIM rollout and AI savings translate into the promised H2 EBITDA acceleration.