Luxembourg

1.1 CATV: National brief overview

Luxembourg is one of the most cabled countries in the world, with 146 964 households out of 154 113 equipped and thus, an estimated potential penetration rate of 95.4% and an effective penetration rate of 84.7% among private households. Only 4.7% of the households (7243) are not connectable and only 10 municipalities have no CATV on their territory.

This very high penetration rate may be analysed as a historical result of a governmental decision taken in the late sixties to withdraw from any public intervention and to favour a completely liberalised frame for the developing of CATV in Luxembourg. Since 1967, over 150 independent networks, with no or little technical common specifications, have arisen and are, until today, owned by about as many different entities.

1.2 CATV: Operating companies

The operating landscape is very scattered. Four main cable operators own and/or operate thirty eight networks covering 42% of the connected households. Forty five municipalities own their own networks and provide CATV to 47% of the connected households. Sixty five non-profit associations cover 11% of the households, mainly in rural areas and two private real estate promoters are providing CATV to 0.3% of the households. As a result, the households of the City of Luxembourg for instance are provided by five different operators and even in some villages, up to four different operators may coexist.

Technical support and maintenance are again thoroughly dispersed among ten different companies, including some cable operators: AEG, CODITEL, ELTRONA, FABER, GOOSE, KONZ, LAUSMANN, RUCKEN-KAUFMANN & BIESEN, SIEMENS, SOGEL, ELTECNIC, EMERINGER.

A private American investor has approached the CATV sector in 1998 to propose the global acquisition of all the infrastructure, at national level. His project, called AURORA, was based on digital multiplexing but presented some technical and legal problems. For several reasons, and also because of the dispersed ownership and the distinctive status of CATV operators, the project has not succeeded that far. Furthermore, the issue of a sufficient audience would have to be solved by co-operation agreements with neighbouring CATV operators in France, Belgium or Germany.

1.3 CATV: Infrastructure deregulation

There has been little regulation on CATV until now: since the sixties, private entities were invited to develop their own infrastructure and to practice mainly on own rules concerning broadcasting, fees, price scaling, quality, etc.

Regulations regarding the cable are included in the 1991 Law on Electronic Media, articles 19 § 4 and 5, article 22 and article 23. Those articles rule the selection of programs allowed on the cable, and specifically the possibility of diffusing local productions. On the other hand, the March 97 Law on telecommunications, imposes the creation of an inventory of existing CATV networks and operators and the organisation of a licensing process with to-be-defined rights an duties. This new regulatory framework will necessary influence the nature of the Luxembourger CATV sector in the future.

But, until nowadays, there is for instance no "must-carry" regulation and programs vary from one place to the other depending on the local decisions of dispersed and small private cable operators: over 50 different programs are carried, but some operators carry up to 36 channels, while others propose only 8. Some operators decode Canal+ and propose it free to their clients. Some others illegally broadcast video-recordings. Most of the networks, 98 out of 150, transcode the SECAM norm (mainly French broadcasting) to PAL, but not all.

1.4 CATV: New opportunities

The Luxembourger CATV sector seems to have great difficulties to implicate itself in the developing of the Information Society. Major obstacles restrain most initiatives:

• the ownership of infrastructures is very dispersed, there is no co-ordinated decision-making process and the sector lacks of investment potential.
• part of the ownership relies upon local non-profit associations being simultaneously the first clients of the infrastructure. Thus, there is no obvious pressure to modify the existing situation considered locally as satisfactory (low cost, sufficient broadcasting supply, etc.).
• the networks have not been upgraded and are mainly old, one-way, arborescent, multipoint broadcasting infrastructures. This impeaches an immediate switch to interactive services. CODITEL, in Walferdange, owns one of the rare upgraded infrastructures and announced some interactive applications in 1998, such as Internet access. It also asked for a telecom licence early 1998; its links with CODITEL Belgium and with the powerful ELECTRABEL industrial holding may well favour further developments.
• the CATV operators are confronted with a major author’s rights invoicing problem: a 1997 Court sentence condemns most cable operators to the due payment of past and present authors’ rights to the SACEM (Société des Auteurs-Compositeurs).

2. Other alternative infrastructures

2.1 Electricity distribution: Compagnie Grand-Ducale d’Electricité du Luxembourg - CEGEDEL

CEGEDEL is the major, even though not the only, electricity supplier in Luxembourg, and covers about 70% of the total electricity supply by importing it mainly from Germany (92.3% from RWE Energy AG).

• The company: CEGEDEL is owned mainly by three shareholders: the Luxembourger State (41.1%), Luxempart SA (15.1%), Indelec (7.9%). It has an annual turn-over of about 250 millions ECUs and employs a little less than 500 workers. It accounts for approx. 125.000 private and corporate clients.
• The alternative infrastructure: CEGEDEL has its own telecommunication network for internal controlling and piloting duties. This network shows segmented optic fibre parts. But CEGEDEL does not own any major fibre backbone and installs fibre only whenever completing its network.
• Infrastructure deregulation: CEGEDEL has to combine a twofold activity status: on one hand it distributes electricity under a quasi monopolistic concession regime, on the other hand it may develop other services in a full competitive framework. The new Law on Telecommunications may favour and even accelerate a diversification of its activities, mainly under the banners of its financial subsidiary, or through CEGECOM as operational partner. Both decisions may necessitate to obtain a licence from the ILT. No licence has been demanded as far as June 1998.
• New opportunities: Observers considered it could take advantage of its numerous dispersed sites, its clients portfolio, its invoicing system, its separate accountancy, its subsidiaries, its recent status change (March 97) and its maintenance networks to propose a joint venture to financial partners and foreign telecom operators to develop telecom activities. Such a scenario took place end July 97, with the offer of LUXCALL in response to the State’s mobile bid, but another company, MILLICOM SA, won the bid for this second mobile licence in Luxembourg.

2.2 Railroad transportation: Société Nationale des Chemins de Fers Luxembourgeois - CFL

• the company: The Société Nationale des Chemins de Fers Luxembourgeois - CFL is a 100% state-owned company. It runs a 275 km long railroad network with a personnel of about 3 200. Since the vote of a Law on 10th of May 1995, the company is to be divided in two separate entities in charge, separately, of the transport exploitation on one hand, the infrastructure on the other, in line with the 29th of July 1991 EC Directive. Both entities will still be 100% state-owned (under the auspices of the Ministry of Transport) and their main priority is to propose secure train transportation with an equilibrated budget: thus, telecom investment is not considered a priority.
• The alternative infrastructure: Even though CFL has upgraded and modernised its network in successive stages since 1982, it owns a traditional 275 km-long copper telecommunication network for internal piloting and controlling necessities. Optic fibre technology has not been that far a priority because of short distances and a wait-and-see strategy due to the interdependency of neighbouring counterparts such as SNCF, DB AG and the Belgian SNCB. Further modernisation of the network concerns the triangulation of the Luxembourg - Bettembourg - Pétange main stations, south of the country, between 1998 and 2003.
• Infrastructure deregulation: Since the 10th of May 1995 Law, the infrastructures and their operating business depend of two separate entities. In fact, CFL may not take advantage of those infrastructure potentialities. The telecom strategy depends thus directly of the Minister of Transport, Mrs M. Delvaux-Stehres, who presently is, as a matter of fact, also the Minister of Telecommunications. In such circumstances, most observers assume that any move in favour of railroad telecom infrastructure leasing is not expectable.
• New opportunities: As such, theoretical opportunities exist, but raise series of obstacles. Backbone leasing, even for redundancy purpose, would necessitate more investments. Telecom operating is impeached by the absence of local loops, mobile installations would necessitate sites which are mainly owned by the Minister and not the CFL as operating company. Finally, the company could have the ambition to join the European HERMES Railtel joint venture, but unless future re-orientations demonstrate the contrary, this project does not seem to link with Luxembourg that far.

2.3 Satellite broadcasting: Société Européenne des Satellites - SES

• The Company: SES is a private company, established since 1985 in Luxembourg and operating the first European private satellite system ASTRA which broadcasts TV and radio stations since 1989 throughout Europe. It actively participates to the creation of "de facto" standards  in the area of satellite analogue and digital (Digital Video Broadcasting - DVB) transmission.
• The alternative infrastructure: The ASTRA satellite system is composed of 6 ASTRA satellites: ASTRA 1A (1988), 1B (1991), 1C (1993), 1D (1994), 1E & 1F (1996), the so-called ASTRA satellite system 19.2°East, and another digital satellite system composed of two more 19.2 East satellites. ASTRA 1E & 1F are the first satellites dedicated to digital broadcasting. Two more satellites (ASTRA 2 series) were launched in 1997 and 1998 at a 28.2° East orbital position. Together, these satellites enable 160 repeaters (répéteurs), among which 100 digital, to broadcast TV and radio signals in several European countries.
• Infrastructure deregulation: SES has a concession agreement with the Luxembourger State until 2010. This concession covers broadcasting, but also other commercial applications. This opens up for the development of advanced services in the framework of the new Law on Telecommunications.
• New opportunities: SES is open to diversification and has the ambition of operating multimedia broadband applications allowing a 38Mbits/s transmission speed. Together with INTEL Corp., it has announced on 12 March 1997 the launch of a subsidiary, European Satellite Multimedia Services SA - ESM, due to operate ASTRA NET, an open communication satellite platform, and to transmit multimedia contents to Pentium PCs equipped with a DVB card and a satellite antenna. The ASTRA satellite system should then be completed with four more digital satellites. Since April 97, other shareholders of ESMS are: Deutsche Telekom (DTAG), Hughes Network Systems (HNS) and the Luxembourger P&T. SES keeps a majority share in this initially 15 millions US $ joint venture.

The commercial launch of ESM products started on 8^th February 1998. ESM accounted in 1998 for a dozens of major corporate clients such as DT AG (Telecoms), DEUROMEDIA (Software downloading), SATWAY (Corporate Video downloading), ELSACOM, a subsidiary of Elsag Bailey (VSAT and telecoms), FAINEX plc.(Financial information), AXEDIA (Distribution) AUDIOSOFT (Music programs downloading), SCALA (Visual corporate communication channels), etc.