Luxembourg: Technology, Media And Telecommunications 2017

Last Updated: 5 January 2018
Article by Linda Funck
Most Popular Article in Luxembourg, January 2018

I. OVERVIEW

The Luxembourg 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 infrastructure and telecommunication networks and is counted among the top locations for electronic communication services and infrastructure. In the 2016 edition of the Global Information Technology Report (GITR Report) published by the World Economic Forum, Luxembourg is listed ninth out of 139 countries with regard to innovation in the digital economy, and its steady upward trend relating to its overall score is recognised.

The ICT development index 2016, analysing the introduction of ICT and the potential for ICT-related development, ranked Luxembourg 11th out of 175 countries.2

Traditionally, the sector was limited to a very few players. Telecommunication and postal services were operated for several decades as a public monopoly of the state-owned Entreprise des Postes et Télécommunications (EPT).3 The radio and television sector was 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. The privately held operator was ensured a leading role in the national and international development of the radio and television sector, and today RTL Group ranks as the top television and radio broadcaster in Europe. Luxembourg has also been a pioneer in non-terrestrial communication technology. SES-Astra, a Luxembourg-based company created in 1985, was Europe's first private satellite operator, and SES now has global standing.

The presence of important market players in the TMT and TMT-related sectors in Luxembourg and related know-how and experience have led the government to make efforts to maintain, create and further develop its electronic telecommunication technologies with the aims of being among the best places in Europe and abroad to do business within the sector and of being a hub for e-services in Europe. These aims have been continuously pursued and reaffirmed by the government since 2010 to date. To reach these aims, the government, together with a group of private investors, set up a fund dedicated to ICT4 start-ups: the Digital Tech Fund. The GITR Report confirms the success of these efforts, as Luxembourg is in first and second position, respectively, in relation to its political and regulatory environment regarding individual usage. Luxembourg is ranked fifth and sixth, respectively, in terms of the importance of ICT in the government vision's and governmental success in ICT promotion. According to the Digital Economy and Society Index of the European Commission, Luxembourg is ranked second among all European Union countries in regard to its connectivity and human capital.5

Luxembourg combines many features that are beneficial to the development of an ICT sector, including the diversity and multilingual skills of the 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, and cutting-edge research, safety and security, all of which contribute to Luxembourg's increasing attractiveness to technology organisations and electronic communication services, and also to financial institutions, companies active in biotechnology and medicine, and other e-businesses. Luxembourg figures among the top locations for ICT infrastructure (data centres, high speed connectivity and internet traffic, low latency internet), and it offers specialised expertise to keep data safe.

The presence of regulated ICT 'support' professionals of the financial sector (PSFs), 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.

More recently, Luxembourg has focused strongly on developing the FinTech industry, for which Luxembourg is very attractive as it combines a huge range and variety of financial services, performant and innovative technology, and open-minded regulators, public authorities, private players and associations who are ambitious to follow and develop a sector that is evolving rapidly and is omnipresent in the overall global economy.

The quality of the communication infrastructure has led numerous actors in the gaming (online video games) and gambling sectors to set up their headquarters in Luxembourg.6 Global brands in the media and internet world such as Amazon, eBay, PayPal, Vodafone Procurement, Intelsat, RTL Group, Milicom and Skype all have European headquarters or major operations in Luxembourg.

The presence of Level 3 in Luxembourg (one of the most important operators of telecommunication services at the level of the backbone internet) confirms Luxembourg as a centre of excellence in the internet sector. 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 Digicash, Amazon Payments, Mercedes Pay SA, Yapital, Six Payment Services, Rakuten and Mangopay all based in Luxembourg. Several software giants, including Microsoft, Symantec 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 CSSF, Luxembourg's financial sector supervisory commission, has granted Bitstamp a payment institution licence, and has made the company the first nationally licensed bitcoin exchange. Many other companies active in the virtual currencies sector want to establish themselves in Luxembourg, and are currently trying to obtain a licence, once more confirming the attractiveness of Luxembourg for ICT businesses.

Luxembourg has a long-standing 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 will host the Luxembourg city incubator, a project conducted by the Luxembourg Chamber of Commerce, Lux Innovation and the Ministry of Economy that intends to accompany between 150 and 200 innovative start-ups in a variety of industry sectors.7

In 2016, the proportion of employees in the ICT sector in relation to the total of all employees was 4.6 per cent, constituting the fifth-highest proportion in the European Union, with an average of only 3.5 per cent in the European Union.8

Efforts are also being made in ICT research, with a focus on the security, reliability and trustworthiness of ICT systems and services.9 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 of the success of the digital economy. Important improvements are being made to the legislation in order to adapt the national legal framework to overcome barriers related to the use of new technologies.

Luxembourg is keen to join forces with other European countries. In 2016, for example, Luxembourg started planning, in cooperation with the European Commission, France, Spain and Italy, the creation of a European supercalculator, allowing private and public players to access top-notch software tools.10 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 will join forces to implement the strategy for a European HPC network, of which Luxembourg was the initiator.11

Luxembourg is highly present at European-level discussions and negotiations, and 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 is conducted by a number of government-promoted institutions.12 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 so as to promote a more competitive telecoms environment. The government has been very active in negotiating and defending the interests of Luxembourg in the adoption process of the European Telecoms Package. Similarly, the government has actively taken part in the discussions regarding the Data Protection Regulation (GDPR): adopted on 14 April 2016, it will be applicable from 28 May 2018.

The development of the information society is a key government priority. In addition to the aforementioned policies, it has created an action plan called 'e-Luxembourg' with the ultimate goal that Luxembourg administrations, corporations, education personnel and individuals may efficiently use and have access to electronic communication means to help improve their quality of life. Many filings, registrations and requests to public administrations (such as those of the tax, social security and energy sectors) can be made online. In 2015, 135,000 administrative procedures were transmitted electronically, representing an increase of 330 per cent compared to 2014.13 The government has adopted a GED system (electronic document management) and banned the use of paper with the aim of streamlining internal government structures so as to become more cost-effective. Luxembourg has also introduced electronic identity cards.

In 2014, the Council of Government announced the launch of a strategy called 'Digital Luxembourg'. The objective of this strategy is to strengthen and consolidate the position of Luxembourg in the ICT sector. The Digital Luxembourg platform aims to assemble private players and public institutions federating inter-sectoral and cross-sectoral interaction. Taking into account the constant need for a workforce with strong skills in IT, Luxembourg implemented the 'Digital (4) Education' strategy. The first WebForce3 school has been established, which aims to train people to become qualified for a developer or junior integrator job in three-and-a-half months.14 The school is part of the 'Fit4coding' initiative launched by the government and co-financed by the European Social Fund.

Luxembourg strongly encourages the development of a Digital Single Market, for instance through the eIDAS Regulation and the Directive on network and information security (NIS), as this will strengthen Luxembourg's position within the European area. In addition, the government is aware of the fact that the continuance of the success and competitiveness of Luxembourg's financial sector will depend on, inter alia, the availability of cutting-edge services based on FinTech.15 A FinTech working group has been established with representatives from different associations active in the financial and technological sectors with the aim to solve and answer specific problems and questions related to FinTech. The Luxembourg House of Financial Technology was officially launched on 25 April 2017, which is an initiative for finance. It is a public–private partnership aiming to establish Luxembourg as a European FinTech centre by offering start-up incubation and co-working spaces.16

In January 2017, the Secretary of State of the Economy presented the Creative Industries Cluster Luxembourg, which aims to support the economic development of the sector, and which includes activities such as architecture, crafts, visual arts, design, styling, the games industry, marketing and communication, literature, publishing, the performing arts and new media.

Convergence has been achieved by creating rules and regulations, regulatory authorities and consulting entities at the national, European and international level that 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 regulatory framework that was introduced into Luxembourg law by two laws of 27 February 2011 (Telecoms Package). The Telecoms Package is designed to provide for one set of rules for all electronic communication services and networks. The continuing development of the ICT sector constantly calls for adjustments to the current legislation and regulations at both national and European level (see Section II.ii).

As a result of 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 the infrastructure or networks make these available to the other participants in the TMT sector. This is particularly true in Luxembourg because of the small size of the market. Efforts are continually undertaken to ensure competitiveness among players in the TMT sector. Ensuring Luxembourg's international connectivity will be at the top of the political agenda in future with the aim of ensuring the lowest latency rates with major capitals, the lowest prices and the presence of the most important carriers.

Importantly, the government supports the principles of network neutrality (i.e., keeping a free architecture, open and non-discriminatory terms, guaranteed access without unjustified conditions on electronic communication networks) and pushed towards the adoption of EU Regulation 2015/2120, laying down measures concerning open internet access and amending Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the European Union, which was finally adopted on 25 November 2015 during Luxembourg's presidency of the European Union Council. This Regulation is seen as a major achievement for the Digital Single Market.

Competition among incumbent operators and alternative operators remains an important element for e-industry players.

To view the full article click here

Footnotes

1 Linda Funck is a partner at Elvinger Hoss Prussen.

2 http://www.luxembourg.public.lu/en/actualites/2016/12/06-rapportITU/index.html.

3 The new commercial name is 'Post Luxembourg'.

4 Information and communication technologies.

5 https://ec.europa.eu/digital-single-market/en/desi.

6 Big Fish Games, Bigpoint, Innova.

7 http://www.luxembourg.public.lu/en/actualites/2017/07/12-startup/index.html.

8 https://ec.europa.eu/digital-single-market/en/scoreboard/luxembourg.

9 Interdisciplinary Centre for Security, Reliability and Trust, Computer Science and Communication.

10 www.digital-luxembourg.public.lu/fr/actualites/promotion/2016/itwXavierBettel/index.html.

11 http://www.luxembourg.public.lu/en/actualites/2017/03/27-hpc/index.html.

12 For instance, the Luxembourg Institute of Science and Technology (LIST).

13 Rapport du Gouvernement 2015, p.11.

14 http://www.gouvernement.lu/5507489/08-ecole-webforce.

15 Financial sector-related technology.

16 https://www.wort.lu/en/luxembourg/FinTech-luxembourg-house-of-financial-technology-open- for-business-58ff0984a5e74263e13bcf3d.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions