Telefónica is converting its telephone exchanges into small data centers: the cloud will have a neighborhood version

Telefónica is pioneering a new era of distributed cloud infrastructure by transforming its disused telephone exchanges into miniature data centers across Spain. This strategic initiative, dubbed "edge computing," aims to bring compute, storage, and AI capabilities closer to end-users, significantly reducing latency and enhancing data sovereignty. The move is crucial for enabling real-time applications and addressing regulatory requirements for data localization. The company has already launched ten such nodes in major Spanish cities, with plans to expand to seventeen before June and potentially a hundred within five to seven years. These facilities are repurposing infrastructure from the phase-out of copper networks, leveraging existing electricity, fiber, and 5G connections. Each mini-data center is equipped with NVIDIA accelerators for AI inference, aggregating 3 MW of power initially, expandable based on demand, offering a localized cloud solution for enhanced performance and security. This development is particularly significant for European telcos seeking to diversify their business models beyond connectivity. By transforming legacy assets into advanced digital services, Telefónica is creating a complementary offering to major cloud providers, focusing on use cases requiring ultra-low latency. The initiative also aligns with a broader European trend towards digital sovereignty, with other telcos like Orange and Deutsche Telekom deploying similar distributed networks. The implications of this distributed network extend to a wide range of demanding applications. Real-time video analytics, drone and autonomous fleet management, industrial digital twins, assisted driving systems, and medical image processing stand to benefit immensely from the reduced latency and enhanced data proximity. Telefónica is even in discussions with hyperscalers to offer their services on this new distributed infrastructure, promising a premium, integrated solution for demanding digital needs.