By Yass Sumitomo, General Manager, Sumitomo Electric Europe
In this post: why telecom carriers hold the advantage in the EU and UK data centre build-out—the fibre already in the ground, the exchange buildings turning into edge capacity, and the sovereignty rules that favour both.
Data sovereignty, grid constraints, and surging AI demand have settled one question about data centre expansion across the European Union and United Kingdom: the region needs far more locally controlled compute capacity—and quickly. The harder question to answer is who will build it. It is fair to say that carriers have the clear advantage, as they have been in the data centre business all along.
According to Connect Europe’s 2026 State of Digital Communications report, telecom operators owned roughly 600 data centres at the end of 2025, nearly one in five across Europe, plus approximately 750 smaller edge nodes. Carriers built much of this footprint long before the cloud- and AI-based build-out began.
This head start is significant in the EU and UK, where sovereignty regulations and scarcity favour organisations that hold the assets hardest to acquire. Carriers, whose infrastructure location, operation, and ownership are easily verified, established their metro rights-of-way over decades. Their dark fibre is already in the ground in London, Frankfurt, Amsterdam, and throughout major corridors in the region. Their central offices and exchange buildings sit on power, cooling, and fibre in the centres of the cities where demand is strongest.
To claim any share of this market, challengers must first find a foothold—and they are up against limited real estate in the metros where demand concentrates. Then come the complex permit processes and grid connection queues that now stretch years in markets from Dublin to west London.
Even the hyperscalers, which generally prefer to physically own their network routes, lease dark fibre or lit wavelengths from carriers across dense European metros. Where right-of-way constraints make new construction slow and expensive, the carriers’ existing plant becomes more valuable. Therefore, carriers are well positioned on both sides of their business: retail services to subscribers, wholesale capacity to the industry.
At Mobile World Congress 2026, Deutsche Telekom, Orange, Telefónica, TIM, and Vodafone demonstrated the European Edge Continuum, the first federated edge cloud in Europe. Five operators that have spent decades competing now jointly offer one entry point across the continent’s five largest networks.
Built with components from the EU’s €1.2 billion IPCEI-CIS programme, the federation runs in lab and pre-production today. Commercial roll-out comes next, with target workloads including AI inference near users, industrial automation, and connected mobility.
The European Commission has since launched EURO-3C, connecting operators, cloud providers, and research institutions across more than 70 edge and cloud nodes in more than 13 countries, as a means of reducing reliance on providers outside the region.
Neither project asks for much new infrastructure, and that is deliberate: European telecom capital expenditure fell for the second consecutive year in 2024, Connect Europe reports, and both federations are designed to earn new revenue from infrastructure the operators already own.
The same conversion is underway in the UK, driven by the market rather than a programme, because carrier fibre already reaches nearly everywhere its customers are. By thinkbroadband’s independent count, Openreach’s full-fibre network passed 23 million premises in early July 2026, covering 68.7% of the UK—and the ducts, exchanges, and spine routes behind that build are the same plant that carries the dedicated circuits connecting data centres to their customers, clouds, and each other.
Some of those exchanges may soon house compute for cloud services and AI workloads. BT is weighing whether to repurpose some of the roughly 1,000 exchanges it will keep after retiring its copper network, plus tower sites, for edge data centre use, Data Center Dynamics reported last year. The head start is undeniable; BT’s buildings already have power, cooling, and fibre in places where it takes years to install them. Telecoms consultancy STL Partners expects network-edge data centres worldwide to more than double by 2028, with converted carrier facilities driving much of the growth.
Even the market itself is consolidating into something easier to build with: nexfibre’s proposed acquisition of Substantial Group would create an 8-million-premises platform, and Ofcom’s Telecoms Access Review sets the rules for wholesale access until March 2031. For a data centre developer, that means leasing from a handful of large networks instead of dozens, at costs that hold for the term of the lease. The alternative, building new routes, means trenches, permits, and years of construction.
A federated edge node or a converted telephone exchange performs only as well as the optical infrastructure within and between its walls. Conversions make a particular demand, with the work happening inside buildings that never stop operating in service of networks that cannot go dark. In these buildings, fibre pathways must take on new capacity without downtime. Cable, duct, and connectivity choices determine whether they can.
Those choices are where Sumitomo Electric works. We help carriers upgrade the facilities they already own and build the networks that interconnect the region’s data centres, and the decisions made in those projects today will set carriers up for AI-era services.
Connect with us to start a conversation about your role in the region’s data centre build-out. For more Next Generation Thinking™, follow us on LinkedIn and YouTube.
Connect with us to start a conversation about your infrastructure plans. For more Next Generation Thinking™, follow us on LinkedIn and YouTube.
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About the author: Yasunori "Yass", is currently serving as general manager for Sumitomo Electric Europe. He has spent his career driving global strategies in core markets like fibre optics including data centres, submarine fibre and emerging hydrogen infrastructure.
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