A general introduction to technology, media and telecommunications in Luxembourg

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Introduction

The Luxembourg technology, media and telecom (TMT) sector has evolved from being predominantly a provider of voice services into a diverse, competitive and interconnected industry using terrestrial, satellite and wireless transmission systems. Today, Luxembourg has first-class infrastructures and telecommunication networks and counts among the top locations for electronic communication services and infrastructures. The current challenge for Luxembourg is to become one of the first countries in the EU with a global 5G network covering the entire Luxembourg territory. The Luxembourg government together with relevant associations and operators actively work in the implementation of the national strategy for ultra-high-speed networks for 2021–2025.² As a pioneer in telecommunication networks, Luxembourg pursues efforts to remain within the top players in electronic communication services. As a result of the efforts undertaken by the government and various players in the market, Luxembourg figures among those Member States that have, in 2020, assigned spectrum in the 5G bands. Almost 94 per cent of the population in Luxembourg has 5G coverage.³ In the 2023 IMD World Competiveness Ranking, Luxembourg ranks 20 out of 64 countries.⁴

Traditionally, the sector was limited to very few players. For several decades, telecommunication and postal services were operated as a public monopoly of the state-owned Entreprise des Postes et Télécommunications (EPT).⁵ Not surprisingly, POST (formerly EPT) was the first operator to offer 5G services in Luxembourg, which started on 16 October 2020. POST has in accordance with its plan managed to extend 5G coverage to 94 per cent of the population on the Luxembourg territory, not far from the 100 per cent planned by the end of 2024. Over the past few years, other operators have increased their presence in the telecommunication sector, increasing competitiveness among players on the Luxembourg market. The radio and television sector is traditionally controlled and developed from its early years by a privately owned company. Indeed, the first radio broadcasting in Luxembourg was initiated by the founders of the current broadcaster, CLT-UFA. Today, RTL Group ranks as the top television and radio broadcaster in Europe and has become a leading European media company in digital video. Luxembourg is also a pioneer in non-terrestrial communication technology. SES-Astra, a Luxembourg-based company created in 1985, was Europe's first private satellite operator and has global standing today. Luxembourg has since attracted numerous companies active in exploring the space,⁶ ranging from space segment, ground segment companies to service segment companies.

The presence of important market players in the TMT and TMT-related sectors in Luxembourg, and the related know-how and experience, have led the government to make efforts to maintain, create and further develop its electronic telecommunication technologies. The aim is to be among the best places in Europe and abroad to do business within the sector and to be a hub for e-services in Europe. This is an aim that has been constantly pursued and publicly reaffirmed by the government since 2010. The government, together with a group of private investors, set up a fund dedicated to information and communications technology (ICT) start-ups called the digital tech fund, which pursues investments in companies active in cybersecurity, fintech, big data, digital health, media and next-generation communication networks, digital learning, the internet of things, and telecommunications and satellite services.⁷ The Luxembourg support to the TMT sector is also strengthened through the set-up of a €150 million fund by the European Investment Bank (BEI and the Société Nationale de Crédit et d'Investissement (SNCI)) which invests directly or indirectly in venture capital funds and small and medium-sized enterprises (SMEs) to foster the sustainable development of the Luxembourg strategic sector (i.e., companies active in ICT, clean tech and other technology sectors).⁸

The Ministry of Economy has prioritised boosting the digital transformation of the national economy. It has laid out its vision of digitalisation for priority economic development sectors and a data-driven innovation strategy for the development of a trusted and sustainable economy. The development plans have been made in synergy with the artificial intelligence vision of the Ministry of Digitalisation.

Luxembourg combines many features that are beneficial to the development of an ICT sector, including the diversity and multilingual skills of its population and workforce, a geographical location in the centre of Europe and an important financial industry in need of high-performance communication technologies. In addition, Luxembourg has gradually developed a state-of-the-art digital infrastructure, international telecommunication connections (offering fast and reliable connectivity to other European cities at very low latency rates), efficient national communication networks, performant data centres, a comprehensive, evolving and innovative legal framework, as well as cutting-edge research, safety and security.⁹ All these elements contribute to Luxembourg's increasing attractiveness to technology organisations and electronic communication services, but also to financial institutions, and companies active in biotechnology, health, space, ecotech, automotive, logistics and media and other businesses. Luxembourg figures among the top locations for ICT infrastructures (data centres, high-speed connectivity and internet traffic, low latency internet) and offers specialised expertise to keep data safe.

The presence of regulated ICT support professionals of the financial sector (PSF), who are subject to the same confidentiality obligation as banks, provides considerable comfort and security to clients in the financial sector in areas such as the outsourcing of IT functions.

In the past few years, Luxembourg has been focusing strongly on the development of the fintech industry, being an attractive country as it combines a huge range and variety of financial services and performant and innovative technology, with open-minded regulators, public authorities, private players and associations, all of whom have ambitions to follow and develop a sector that is evolving rapidly and that is omnipresent in the overall global economy. Luxembourg, as a hub for financial services, offers an ideal environment for fintech and regtech companies to develop their services and expand their business. In fact, many start-ups have chosen Luxembourg to develop fintech activities, ranging from compliance and risk-management, regulatory reporting, through blockchain and cryptocurrency, security and authentication, automated investment services and big data analytics, to mobile and e-payments.

The quality of the communication infrastructure continues to lead numerous actors in the gaming sector (online video games) and gambling sector to set up their headquarters in Luxembourg.¹⁰ Global brands in the media and internet world, such as Amazon, eBay, PayPal, Vodafone Procurement, Intelsat, RTL Group, SES, Milicom, Fanuc (Robotics and CNC), Telindus (Proximus), Skype, Fujitsu, Sogeti, NTT, Devoteam, Spire, Talkwalker, Centurylink Communication and Oracle all have European headquarters or major operations in Luxembourg.

Luxembourg is also attractive to a number of e-payment and e-money services institutions and can be considered as Europe's e-payment hub with brands including Payconiq International (formerly Digicash), Amazon Payments, Six Payment Services, Rakuten, Airbnb Payments (for all EU payments), eBay, Ping Pong Europe and Mangopay all based on its territory. Several software giants, including Microsoft and Open Text, also have places of business in Luxembourg.

Luxembourg also has a strong reputation for service availability, security and data protection and responsive and open-minded authorities.

The Luxembourg Commission de Surveillance du Secteur Financier has granted Bitflyer a payment institution licence and has made this company the first nationally licensed bitcoin exchange. More licences have been granted since then. There are many other companies, active in the virtual currencies sector, that want to establish themselves in Luxembourg and obtain their licence. This is yet another example confirming the attractiveness of Luxembourg for ICT businesses and the country's open-mindedness.

Luxembourg has a longstanding official policy of welcoming pan-European companies in addition to creating the appropriate framework for the development of local businesses and offers multiple opportunities to start-ups by creating an environment that allows existing market players to come into contact with young entrepreneurs. For example, the House of Start-Ups hosts the Luxembourg-City Incubator, a project conducted by the Luxembourg Chamber of Commerce, and currently accompanies a large number of innovative start-ups in a variety of industry sectors. Further, the House of Start-Ups hosts the Luxembourg House of Financial Technology (Lhoft), the Luxembourg-City Incubator (LCI), the Hub @ Luxembourg and the International Climate Finance Accelerator Luxembourg (ICFA).¹¹

According to the Digital Economy and Society Index (DESI), the proportion of ICT specialists in the context of total employment is 6.3 per cent (up 0.7 per cent from last year), which is higher than the average of 4.3 per cent in the European Union.¹²

Efforts are also being made in ICT research with a focus on the security, reliability and trustworthiness of ICT systems and services.¹³ In the context of increasing the influence of digital technologies in every aspect of our lives and throughout all business areas and with the further and constantly evolving development in cloud computing and e-archiving, digital security is a key element for the success of the digital economy. Important improvements are being made to the legislation to adapt the national legal framework with the aim of overcoming barriers related to the use of new technologies.

Luxembourg joined forces with other European countries in cooperation with the European Commission, as it is 'aiming to deploy in Europe a world-class supercomputing infrastructure and a competitive innovation ecosystem in supercomputing technologies, applications and skills'.¹⁴ The declaration of European Cooperation in the context of high performance computing (HPC) was signed by the Luxembourg Minister of Economy on 23 March 2017, which marked the official start of the collaboration between the signatory countries (Luxembourg, Germany, Spain, Italy, Portugal, France and the Netherlands). These countries joined forces to implement the strategy of a European HPC network, of which the Grand Duchy is the initiator. The European HPC European high-performance computing joint undertaking is a public–private partnership in HPC and has its headquarters in Luxembourg. In the context of HPC, Luxembourg has been given a leading role in the 'Driveless cars: The Future Smart Mobility made possible by High Performance Computers' project.¹⁵ In September 2020, Luxembourg acquired MeluXina, a petascale supercomputer capable of executing more than 10 petaflops and 10 million billion calculations per second and powered by green energy from a cogeneration plant powered by waste wood. This new supercomputing system was launched on 7 June 2021 and ranks among the world's top 50 supercomputers according to the European High Performance Computing Joint Undertaking.¹⁶ MeluXina is funded via a joint investment of about €30 million of the European Union and Luxembourg.¹⁷ Recently, LuxProvide, the organisation managing Meluxina has launched 'Initiate' to provide early-stage start-ups with the possibility to use Meluxina for their commercial development while also providing them with technical training, expert mentorship, storage capacity and 24 free assistant tickets.¹⁸

Luxembourg is very present at European-level discussions and negotiations, and it is stout in its defence of its position in the global process of harmonisation and liberalisation, while supporting the direction of European regulation. At a national level, research and development in the ICT sector are conducted by a number of government-promoted institutions.¹⁹ In developing its communication networks in the context of the investment realities and opportunities in the telecoms and media sector, the challenge is to direct investment in a way that ensures that the right type of network is built and that public investment works in cooperation with the private sector to promote a more competitive telecoms environment.

The ongoing effort to further develop the information society remains one of the key priorities of the government. In addition to the aforementioned policies, Luxembourg pursues the e-Luxembourg action plan with the ultimate goal that its administrations, corporations, education personnel and individuals may efficiently use and have access to electronic communication means and to help improve their quality of life. A Digital Ministry was created in 2018 to specifically follow and drive the development of the digitalisation in all sectors (both public and private). As an example of this dynamic led by the government, regarding corporate matters, the new law of 7 July 2023 is digitising the notarial profession by allowing certain notarial deeds to be passed online via an electronic platform of the Notaries' Chamber and with an electronic signature.²⁰ Also, an increasing number of filings, registrations and requests to public administrations (such as those of the tax, social security, public and energy sectors) can be and are made online; for example, it is now possible to apply for a direct road building permit.²¹Between 1 January and 31 September 2021, more than 2.6 (from 1.3 in 2020) million requests were filed via a new mobile application,²² MyGuichet.lu, which is double the number of requests filed during the same period in 2019.²³ MyGuichet.lu was launched on 5 July 2021.²⁴ This application represents a major achievement in terms of the commitment set out in the e-Governance 2021–2025 strategy to provide citizens with cross-media accessibility to digital public services accessible on smartphones and tablets;²⁵ for example, it is possible to file a tax return thanks to MyGuichet.lu, with more people eligible in 2023.²⁶ It is notably thanks to MyGuichet.lu that Luxembourg ranked third at the eGovernment Benchmark 2022.²⁷ Luxembourg ranges as second out of 28 countries with a score of 94.78 (0 to 100) on the indicator digital public services for citizens.²⁸ Other authorities such as the supervisory authority of the financial sector (CSSF) have launched eRISS (electronic Reporting for Information concerning Issuer of Securities) in 2022, which replaces email-based filings.²⁹ Recently, the government has launched the application Luxchat4Gov to provide the 25,000 state agents with an efficient and secured instant messaging service.³⁰

A recent bill of law intends to introduce a legal basis for the introduction by the State of a mobile personal digital wallet application that will allow citizens to prove their identity electronically.³¹

The covid-19 crisis has evidenced the importance of digitalisation and efficient means of electronic communication. Administrative online platforms such as eHealth, which facilitate the possibility of carrying out administrative procedures electronically via online applications, have proven to be efficient, specifically during the covid-19 crisis. The government has adopted a document and email management system (GED) and has banned the use of paper with the aim of streamlining internal government structures to become more cost effective. The government encourages and is very keen on actively assisting Luxembourg small and middle-sized companies to familiarise themselves with, and develop and enhance the digitalisation of, their businesses and operations to increase productivity and competitiveness for the long-term sustainability of their enterprises. In its fifth national action plan for SMEs, Luxembourg wants to stimulate digitisation of SMEs.³² In that context, a Digital Skill Bridge programme has been created, allowing businesses and their employees to be aware of the possibilities that digitalisation may offer.³³ In its efforts to promote itself as a European logistics hub, Luxembourg has introduced the Single Window Logistic programme, which will simplify and digitalise relations between all actors in the logistic chain and thus increase efficiency and competitiveness.

In 2014, the Council of Government launched the Digital Luxembourg strategy, which actively focuses on developing high-level ICT infrastructures, facilitates the regulation and flow of data, promotes digital competences, modernises online administration and creates an innovative ecosystem. The Digital Luxembourg platform assembles private players and public institutions federating inter-sectoral and cross-sectoral interaction. Taking into account the constant need for a workforce with strong IT skills, Luxembourg implemented the Digital (4) Education strategy and related Digital Learning Hub.³⁴ The first 'WebForce3' school was created in 2015 and aims to train people in a very short time, to allow them to become qualified for a developer or junior integrator job.³⁵ This school is part of the Fit4coding initiative launched by the government and co-financed by the European Social Fund. Nowadays, the most important signal sent to the market is the recent arrival of 'Ecole 42' which will provide Luxembourg with a strong and recognised formation in coding; this opening aims to resolve the constant need for specialists in Luxembourg as well as strengthening Luxembourg as an attractive place regarding digital matters. In this context, Luxembourg has also launched in 2023 its new version of 'Digitalskills.lu' which aim at gathering courses, activities, conferences and job offers related to the digital sector. It is also directly connected to the initiatives of other EU Member States by means of an interoperability system with the EU platform 'Digital Skills and Jobs Platform'.

In the context of the Digital (4) Education strategy and the effort to raise awareness of the importance of technologies at a very early stage, high schools innovating in ICT have been able to use the label 'Future Hub' since 2017. The Ministry for Education is currently updating the infrastructure of all high schools to provide high-speed internet through fibre. Luxembourg ranked sixth (up two places from the previous year) out of the 27 EU Member States in the Women in Digital Scoreboard 2021, attesting to the effectiveness of government (through Digital Luxembourg) Women in Digital Empowerment initiatives, which actively support girls and women in the acquisition of digital skills.³⁶ Generally, Luxembourg's share of ICT specialists is above EU average, with 20 per cent of them being women. ICT specialists represent 7.4 per cent of the workforce.³⁷

In addition, the government is fully aware that the continuance of the success and the competitiveness of Luxembourg's financial sector will depend, inter alia, on the availability of cutting-edge services based on fintech.³⁸

The Luxembourg Creative Industries Cluster aims to support the economic development of a sector that includes activities such as architecture, crafts, visual arts, design, styling, the games industry, marketing and communication, literature, publishing, the performing arts and new media.³⁹

Convergence has been achieved by creating rules and regulations, and regulatory authorities and consulting entities, at the national, European and international levels, all of which embrace the diversity, interconnectivity and interrelatedness of the various industries and players. The increasing convergence between telecommunications, information technology and media has led to the adoption of the new Law of 17 December 2021 introducing the Electronic Communication Code, which has replaced the previous telecoms package. One of the main novelties that this Law introduced is the application of the electronic communication legislation to over-the-top (OTT) operators providing number independent interpersonal communication services. The continuing development of the ICT sector constantly calls for adjustment of the current legislation and regulations at the national and European levels (see Section II.i).

As a result of such convergence, it is extremely important that interconnectivity and free access to all operators and service providers within the TMT sector is ensured in an equal manner. The use of one infrastructure for different types of services is of particular importance, and it is crucial that the operators and owners of infrastructure or networks make these available to other participants in the TMT sector. This is particularly true in Luxembourg because of the small size of the market. The New Electronic Communication Law (as required by the Electronic Communication Code Directive) provides for a specific standardised declaration process facilitating the exercise of rights of interconnection. Ensuring Luxembourg's international connectivity remains at the top of the agenda, the aim being to ensure the lowest latency rates with major capitals, the lowest prices and the presence of the most important carriers. The New Electronic Communication Law shall enhance investments in new high-speed networks; it covers spectrum availability and prohibits redundant restrictions to the interconnexion of radio local area network (RLAN) access points, and the universal service has been extended to access to high-speed internet.

The government supports the principles of network neutrality (i.e., keeping a free architecture, open and non-discriminatory terms, guaranteed access without unjustified conditions onto electronic communication networks), and pushed for the adoption of Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015 laying down measures concerning open internet access and of Regulation (EU) No. 531/2012 on roaming on public mobile communications networks within the European Union, adopted on 25 November 2015, during Luxembourg's presidency of the European Union Council.

Finally, competition among incumbent operators and alternative operators remains an important element for e-industry players.