Luxembourg a bastion of state ownership

Nico Binsfeld, Jason Whalley and Lee Pugalis

25th European Regional ITS Conference, Brussels 2014 from International Telecommunications Society (ITS)

Abstract: Akin to many other European Union member states, over recent times the Luxembourgish telecommunications market is undergoing a process of market liberalisation, which is itself encapsulated by broader neoliberal tendencies. While many aspects of market liberalisation are similar to those in other European Union member states, there are others that appear to be highly distinctive. The government has simultaneously sought to liberalise the small telecommunications market while protecting the wholly state owned incumbent. Moreover, the state has created or participated in the creation of new companies, thereby deepening its presence within the telecommunications market, although the incumbent operator remains the predominant player. As a result, competition and market penetration - especially by way of international investment - has been curtailed and alternative fixed operators have found it difficult to gain access to public infrastructures while being unable to build out their own network infrastructure. The current nature of the market raises four key questions that this paper will explore and seek to address. Firstly, how competitive (or 'open') is the marketplace? Secondly, how has the extensive presence of the state in the market shaped its development? Thirdly, will Luxembourg be able to maintain its current international ICT competitiveness in the short and medium term? Fourthly, why have international operators invested (or not) in a market as small as Luxembourg? To answer these questions, we construct an extensive and detailed timeline of political, technological, regulatory and competitive developments within the Luxembourgish market. Contrary to prevailing international trends displaying the hegemony of neoliberalism, we reveal how the Luxembourgish telecommunications sector has benefitted from the deepening of state involvement over time. This leads us to conclude that Luxembourg is indeed a bastion of state ownership, as the government has not followed other European countries to reduce both its ownership and intervention in the telecommunications market.

Keywords: Luxembourg; state-ownership; market evolution; competition (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:itse14:101425

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