OpenStack for Telcos and CSPs: The Platform for Building a European Cloud Provider

by Andrea Martra — CTO & Co-Founder, Epic Edge

The European telco market has changed dramatically in recent years. The rising costs of proprietary platforms, the spread of 5G, and the growing demand for sovereign cloud are pushing operators and cloud service providers to completely rethink their infrastructure.

In this scenario, many of the major European operators have chosen OpenStack as a strategic open-source cloud platform to support network virtualization, the sovereign cloud and new digital services.

Context: Why European Telcos Are Migrating to OpenStack

For decades, telcos operated with proprietary infrastructure—dedicated hardware, vendor-specific software, and multi-year contracts with vendors like VMware, Cisco, and Nokia. This model guaranteed stability, but at increasing costs and with increasingly limited flexibility.

Three forces are structurally changing this scenario.

5G and network function virtualization. 5G isn't just a faster network: it's an architecture that requires Network Function Virtualization (NFV) and Software Defined Networking (SDN) to unleash its potential. Network functions that previously ran on dedicated hardware must now be virtualized and orchestrated on cloud platforms. OpenStack is one of the most widely adopted open-source platforms in the Telco/NFV sector in Europe.

Cost pressures after Broadcom. In many cases, the licensing increases introduced after Broadcom's acquisition of VMware have pushed many organizations—including telcos, among the platform's largest users—to reevaluate their infrastructure strategies and seriously consider open-source alternatives.

Demand for IaaS and PaaS services. Telco clients are increasingly demanding cloud services in addition to connectivity. Operators that can offer IaaS, PaaS, and managed services directly on their own infrastructure have a significant competitive advantage over those who limit themselves to data transport.

Why OpenStack is a natural fit for European telcos

To understand why OpenStack has become one of the reference platforms for the Telco sector, it is sufficient to observe the features that the platform offers natively.

Native multi-tenant architecture. OpenStack is designed to manage hundreds or thousands of independent tenants on the same physical infrastructure. Each tenant has its own isolated virtual network, resource quotas, separate storage, and authentication domain. This is a key feature for a telecom company offering cloud services to dozens or hundreds of corporate clients.

Horizontal scalability. The platform scales horizontally by adding compute, storage, and networking nodes without service disruption. A CSP can start with a cluster of just a few nodes and grow to hundreds or thousands while maintaining the same cloud architecture and software.

Stable APIs and automation. OpenStack exposes stable and well-documented APIs, with SDKs and tools compatible with leading cloud and DevOps workflows. This simplifies automation and integration with existing Infrastructure-as-Code pipelines, lowering the adoption barrier for those looking to migrate workloads to a private or sovereign infrastructure.

NFV support. OpenStack is one of the reference platforms for the ETSI NFV ecosystem. Components like Nova and Neutron, along with dedicated tools like Tacker (when adopted), are designed to cover network function virtualization use cases typical of the telecommunications industry.

Established European ecosystem. A significant portion of contributions to the OpenStack project come from Europe. Operators and vendors such as Deutsche Telekom, Orange, Ericsson, and Nokia are actively participating in the platform's development, helping to keep European market requirements aligned with the project's evolution.

In summary, here's how the open-source stack covers the typical requirements of a telco cloud provider:

Cloud provider requirement	Stack component
Multi-tenant isolation	Keystone + Neutron
API and Automation (IaC)	OpenStack + Terraform / Ansible API
Network Functions Virtualization (NFV)	Nova, Neutron, Tacker
High-performance networking	SR-IOV, DPDK, VXLAN, BGP
Distributed and highly available storage	Ceph (Block · Object · File)
Cloud-native and PaaS workloads	Kubernetes on OpenStack
Sovereignty and compliance (EU)	Fully European infrastructure and operations

Why not a proprietary platform?

Many telcos already have established proprietary virtualization infrastructures, often based on VMware. However, when you move from consolidating internal workloads to building a multi-tenant, API-driven cloud provider with NFV requirements and large-scale growth, the constraints change profoundly.

OpenStack was created specifically to build distributed, scalable, and API-governed cloud infrastructures, while many proprietary platforms were designed with different goals—and with licensing models that are poorly suited to CSP growth. This is why many operators are considering moving toward open-source architectures, where costs grow predictably with the infrastructure, rather than based on per-core or per-socket licensing.

OpenStack Architecture for Telcos and CSPs: Key Components

An OpenStack deployment for a telco or CSP has different architectural requirements than a standard enterprise cloud infrastructure. Here are the most relevant components and choices.

Highly available control plane. The OpenStack control plane—Keystone, Nova API, Neutron API, Glance—must be redundant across at least three nodes with load balancing and automatic failover. For a telco, a control plane outage means the inability to create or modify resources for all customers simultaneously—an unacceptable condition in production.

Advanced networking with Neutron. Networking is the most critical component for telco use cases. Neutron must be configured with support for VLANs, VXLANs, BGP for dynamic routing, QoS for bandwidth management, and granular Security Groups for tenant isolation. For NFV and low-latency scenarios, SR-IOV and DPDK are essential to achieve near-bare-metal network performance.

Multi-tenant isolation with Keystone and Neutron. Tenant isolation is provided by Keystone for authentication and authorization and Neutron for network separation. Each tenant operates in a separate environment: a private virtual network, independent security groups, and dedicated resource quotas.

Orchestration with Heat and NFV components. Heat manages the deployment of complex application stacks through declarative templates. For the Virtual Network Functions lifecycle—deployment, scaling, healing—the ETSI NFV model can be covered by components like Tacker, which can be adopted based on the project's actual needs.

Telemetry and billing. For a CSP that bills customers based on consumption, a layer is needed to collect usage metrics (Ceilometer/Gnocchi) and transform them into rating and billing data. CloudKitty is one possible open-source solution for this purpose; many operators integrate proprietary or third-party billing systems already present in their commercial stack.

Why Ceph is the natural complement to OpenStack

A cloud provider's storage must be distributed, highly available, and linearly scalable. Ceph meets these requirements by offering block (Cinder), object (S3/Swift compatible), and image (Glance) storage on a single software-defined platform.

Data replication across multiple nodes ensures operational continuity even in the event of a hardware failure, while adding new nodes allows for capacity and performance growth without redesigning the architecture. For a telco operator, this means eliminating dependence on proprietary storage arrays and bringing the data persistence layer under the same open, scalable, and sovereign model as the entire platform. This is also why Ceph is now the reference distributed storage in most enterprise and telco OpenStack deployments.

Kubernetes and OpenStack: The Pairing for Cloud-Native Services

Today, no operator builds a cloud provider based solely on virtual machines. More and more CSPs are using Kubernetes on top of OpenStack to offer PaaS services, AI/ML platforms, enterprise containers, and cloud-native workloads.

The division of roles is clear: OpenStack provides networking, storage, and infrastructure virtualization, while Kubernetes manages the containerized application lifecycle. This combination is now one of the most popular approaches in next-generation telco cloud architectures and allows an operator to cover both traditional and modern workloads with a single platform.

The case of European telcos: what they chose and why

Several major European operators have built cloud infrastructures based on OpenStack—not to follow a trend, but for concrete technical and economic reasons.

Deutsche Telekom uses OpenStack in several cloud and infrastructure projects, both for internal services and as the technological foundation for its IaaS offering for business customers, positioned as a European alternative to US hyperscalers.

Orange uses OpenStack as the foundation for its Flexible Engine IaaS platform, born from the need to offer enterprise customers a sovereign alternative to American hyperscalers, with data hosted in Europe and GDPR compliance.

Ericsson adopts OpenStack as the platform for its NFV services and as a component of its telco and 5G stacks, confirming the platform's role in industrial-scale network virtualization contexts.

The pattern is clear: European operators choose OpenStack when they need control, scalability, and sovereignty—three characteristics that American hyperscalers cannot structurally guarantee.

How Epic Edge Supports Telcos and CSPs in Building OpenStack Cloud Providers

The Epic Edge team has experience designing and managing OpenStack, Ceph, and Kubernetes infrastructure for telcos, cloud providers, and mission-critical enterprise infrastructure. The typical path to building a cloud provider on OpenStack follows four phases.

Architecture assessment and design. The first phase analyzes the customer's specific requirements—the expected number of tenants, NFV workloads, performance, compliance, and data sovereignty requirements—and produces a detailed target architecture, including hardware sizing, component selection, and deployment plan.

Implementation with Infrastructure as Code. Deployment is performed with tools like Terraform and Ansible: each infrastructure component is coded, versioned, and reproducible. This ensures that the environment can be replicated, updated, or scaled in a controlled manner, without depending on the memory of individual engineers.

Billing and self-service portal integration. For a CSP wishing to offer services to its customers, consumption rating and billing systems and self-service portals are integrated, allowing end users to independently create and manage their resources, within the limits and quotas defined by the provider.

Managed services and ongoing support. Once in production, the infrastructure is managed with full-stack monitoring, patching, incident response, and continuous optimization, with managed services and enterprise support tailored to the customer's operational needs.

OpenStack and 5G: The Role of MEC and NFV

5G introduces an architectural paradigm that OpenStack is ideally positioned to support: Multi-access Edge Computing (MEC).

The MEC moves processing close to the antenna, reducing latency to a few milliseconds for critical applications like autonomous vehicles, industrial automation, and real-time scenarios. Each MEC site is effectively a mini data center that must run virtualized network functions and real-time edge applications.

With support for NFV, SR-IOV, DPDK, and distributed management, OpenStack is one of the most mature platforms for MEC deployments. Designing distributed edge architectures that are consistent with the core and can be managed with the same tools as the central cloud is one of the most relevant areas for operators building their 5G networks.

The Competitive Advantage: Data Sovereignty as a Differentiator

For European telcos competing with AWS, Azure, and Google Cloud, data sovereignty isn’t just a compliance requirement: it’s a business differentiator.

European companies in regulated sectors—finance, healthcare, defense, and public administration—have obligations that make it difficult or impossible to rely on cloud services governed by non-EU jurisdictions. A European telco offering IaaS on OpenStack with data secured in the EU has a structural advantage in these markets that is difficult for a US hyperscaler to replicate.

This advantage is set to grow. The European regulatory and industrial framework is moving decisively toward digital sovereignty: the EU Commission has published its own framework for assessing the sovereignty of cloud services, the Cloud and AI Development Act is expected, and initiatives like EuroStack are moving the topic of infrastructure sovereignty from academic to industrial and public procurement debates. On the open-source front, projects like Sovereign Cloud Stack and Gaia-X represent concrete attempts—albeit with challenging paths—to define common standards for federated and interoperable clouds. Added to this is the push from the NIS2 Directive, now implemented by most Member States, which raises the bar on resilience and risk management for operators of essential services.

In this scenario, an open-source cloud platform like OpenStack, auditable and operable entirely by European personnel and infrastructure, becomes a strategic asset, not just a technological choice.

Conclusion: the advantage is for those who start today

The technologies are mature, the expertise ecosystem is available, the regulatory framework is pushing for sovereignty, and enterprise customers' demand for a sovereign cloud is steadily growing. European telcos and CSPs that have not yet built their own open-source cloud infrastructure now have all the necessary conditions to do so.

OpenStack is no longer simply an alternative to proprietary platforms. For European telcos, it has become the technological foundation upon which to build cloud services, edge computing, AI platforms, and truly sovereign digital infrastructures.

The question is no longer whether the open-source cloud is mature enough: it is. The real question is how much of a competitive advantage those who start today can gain over those who continue to wait.

Are you evaluating OpenStack for your infrastructure?

Every telco or CSP project has different requirements in terms of networking, performance, resilience, and compliance.

Epic Edge supports operators and cloud providers in the design, implementation and management of OpenStack, Ceph and Kubernetes infrastructures, through architectural assessments, Infrastructure as Code deployments and specialized support services.

Andrea Martra is CTO and co-founder of Epic Edge. For over twenty years, he has designed and built enterprise cloud infrastructures based on OpenStack, Ceph, and Kubernetes for cloud providers, telcos, and large European organizations.