Executive summary
National fibre strategy positions Luxembourg at the forefront of Europe’s 1Gb/s fibre future
Luxembourg has one of the smallest telecom markets in Europe, greatly supported by an influx of workers and migrants from larger neighbouring countries. Luxembourg City is also one of the political centres of the European Union, and so attracts affluent migrant employees.
Overall revenue from electronic communications services reached €494 million in 2010, about the same as in 2009. Revenue from mobile services increased 6.5% in the year while fixed-line service revenue fell 6.1%. Continued steady growth is expected during the next few years at least as the Duchy’s upgraded network infrastructure attracts international interest from companies seeking high-end connectivity.
Total investment in fixed-line and mobile infrastructure has also risen steadily, and do so for the next five year as operators migrate from copper to FttH and FttC. Equally, there is considerable investment in mobile networks to provide mobile broadband connectivity to subscribers based on HSPA and LTE technologies.
Investment has been maintained in spite of the impact of the financial crisis and by the effects of Luxembourg’s general economic slump, which saw GDP fall 3.7% in 2009 before showing strong recovery in 2010, with growth at 3.4%. Similar growth, at about 3%, is forecast for 2011, while GDP per capita, at about US$120,000, provides one of the highest disposable incomes in Europe to maintain consumer spend on telecom services.
The incumbent P&T retains the dominant player in all market sectors, despite the telecoms market having been liberalised in 1998. Regulatory measures during the last few years have encouraged broadband competition through local loop unbundling, yet the proportion of unbundled lines remains relatively low. As yet, there are few broadband subscribers on fibre networks but this is set to change as the country migrates to FttH architecture. P&T has set aside €500 million to build its NGN, an open access platform which should allow for effective competition though high wholesale access prices may need to be addressed by the regulator.
In common with most other markets, revenue from the fixed line sector has been falling steadily. Indeed since 2005 income generated by mobile telecoms has far exceeded that from of fixed lines, while revenue from the broadband sector has propped up total revenue.
High mobile penetration has slowed subscriber growth in the mobile market since 2005. Partly as a result of fixed-mobile substitution, Luxembourg has one of the lowest fixed-line densities in Europe, at about 50%. As a consequence, revenue from the fixed line sector has been falling steadily as consumers migrate to mobile-only solutions. In 2005 income generated by mobile telecommunications exceeded those of fixed lines for the first time.
Luxembourg – key telecom parameters – 2010; 2012
Sector
| 2010
| 2012 (e)
|
|---|
Subscribers to telecoms services:
|
|---|
Fixed broadband
| 165,000
| 210,000
|
Fixed-line telephony
| 272,000
| 280,000
|
Mobile
| 729,000
| 730,000
|
Penetration rate by service
|
|---|
Fixed-line
| 51%
| 53%
|
Broadband
| 33%
| 37%
|
Mobile (SIM):
| 151%
| 153%
|
(Source: BuddeComm)
Market highlights:
- In late 2011 P&T completed a 100Gb/s data connection between Luxembourg and Frankfurt, providing connectivity to other terrestrial cable systems. The development will help consolidate the Duchy as a base for business and for companies seeking high-end connectivity in the region
- The government’s ‘National Strategy for very high-speed networks’ aims to encourage telcos to implement FttH nationally, providing at least 100Mb/s connectivity by 2015 and 1Gb/s by 2020. The progressive roll-out calls for some 80% of the population to have access to 100Mb/s by the end of 2013 and 50% to have access to 1Gb/s downlink by the end of 2015.
- A number of geographic zones reserved for economic activity have been prioritized for the FttH service: since the beginning of 2011 buildings have been equipped with passive in-house ducts and equipment required for FttH. A national infrastructure inventory (similar to one developed in Germany) as well as more efficient use of civil engineering works have helped reduce roll out costs: a registry of civil engineering works is intended to identify work permits usable for fibre deployment. In addition, the regulator has worked on a framework to release appropriate spectrum bands for use in mobile broadband.
- Luxembourg’s mobile SIM penetration continues to be the highest in Europe, largely due to the high number of transient workers and to the popularity of multiple SIM use.
Henry Lancaster
October 2011
Data in this report is the latest available at the time of preparation and may not be for the current year.
This report covers trends and developments in telecommunications, mobile, internet, broadband, digital TV and converging media including VoIP and IPTV developments. Subjects include:
- Market and industry analyses, trends and developments;
- Facts, figures and statistics;
- Industry and regulatory issues;
- Infrastructure;
- Major Players, Revenues, Subscribers;
- Internet, VoIP, IPTV;
- Mobile Voice and Data Markets;
- Broadband (FttH, DSL, cable TV, wireless);
- Convergence and Digital Media;
- Broadband market forecasts for selective years to 2020.
