Deutsche Telekom today announced that Budapest, Hungary, is the first production site for its new pan-European network. DT is trying to virtualize its networks – like its Tier 1 brethren in the U.S. But the European service provider has the added complexity of networks that cross multiple national borders in 13 different countries.

The production site, or basically a data center, in Hungary will be fully operational and ready to run the first services for all European subsidiaries by year-end.

DT plans to bring two more production sites online in 2017 – in Poland and Greece. The three initial sites together will form the backend of Deutsche Telekom’s future infrastructure in Europe .

DT is architecting its network to deliver individual services for all countries in the form of building-block modules. Then each country can put these building blocks together in ways that address their needs and compliance requirements.

The service provider’s news today was rather simplified and more of a big-picture announcement. But virtualization will be a key element of its Pan-European network. As part of that, DT has been working to transform its network to all-IP, which it hopes to achieve by 2018.

At Mobile World Congress in February 2016, DT Vice President and CTO Axel Clauberg told SDxCentral, “Only if you have converted everything to IP can you take the benefits of SDN and NFV. We’re retiring a lot of hardware; saving energy costs. Once you move everything to IP, you have to produce IP services in the best possible way.”

That appears to be DT’s move in terms of basing its services out of three data centers at the core of its Pan-European Network.

At Mobile World Congress, Clauberg referred to them as “I/O optimized data centers” and “the infrastructure cloud.” He said after the cleanup of the network to all-IP and the establishment of the I/O optimized data centers, the next step would be “a new way of controlling” using standardized technologies.