Luxembourg launched its first 4G network in late-2012 together with other major European countries, like France, Italy, Netherlands and the UK. Although Luxembourg launched 4G 3 years after the technology was first available, it managed to become one of the leading nations in 4G deployment. In fact, as per a recent report, Luxembourg had the 6th fastest 4G speed in the world and the 3rd fastest in EU28.

inCITES Consulting’s Mobile Connectivity database shows that, despite the very fast and reliable 4G service that Luxembourg operators offers coupled with extensive network coverage, the take up rate of 4G has not been on par with other major European countries that launched LTE at a similar time frame (see figure above).

inCITES Consulting attributes this lag to three main reasons amongst others. Firstly, Luxembourg has one of the highest ARPUs in the region (see Top 10 below) and, although it also has one of the highest GDP per capita ratios, the perceived high cost of 4G service might act as a deterrent for some consumers to adopting this service. As a result, mobile subscribers in Luxembourg might be limiting their use of data-intensive applications, such as video streaming on the go due to the perceived high cost of the service.

Top 10 countries by ARPU in 2016:
1. Norway
2. Switzerland
3. Luxembourg
4. Iceland
5. Ireland
6. Belgium
7. Sweden
8. The Netherlands
9. Germany
10. United Kingdom

Secondly, almost 180,000 people (~31% of Luxembourg’s total population) cross the borders of Germany, Belgium and France daily to work in Luxembourg. These people will most likely already have a mobile connection with the local provider in their country of residence and they would most likely also own a second device with a Luxembourgish mobile operator, which might be more useful for Voice and SMS services, rather than data. However, with the abolition of roaming charges within the EU, multi-SIM ownership is expected to decline and this will likely spur faster adoption of 4G services in the European markets.

Free Wi-Fi

Network operators should aim to migrate their customers to their 4G networks by offering attractive data-centric plans in order to capitalise on the current data growth and offer better value-for-money services to their subscribers. In addition, the faster the tech migration to 4G for the customer base the quicker the shutdown of older generation networks will be and, hence, the higher the focus of resources and spectrum to newer technologies and 5G.

Despite the slow adoption of 4G in Luxembourg so far, Luxembourg seems very keen to get on the 5G ladder as early as possible in the new digital era. In fact, Luxembourg will participate alongside Germany and France in self driving/autonomous vehicles testing on a 5G network in 2018. However, deployment of a commercial 5G network is not expected to happen before 2020 as some operators have hinted. This is in-line with most of the major European countries that have similar roadmaps for commercial 5G network deployments.

inCITES Consulting forecasts that 5G in Luxembourg will reach nearly 70k mobile subscriptions by end-2022, growing approximately 1.4x faster than 4G and 1.9x faster than 3G for the first 3 years after launch on a like-for-like basis. Higher tech savviness, larger 5G-enabled devices installed base, stronger demand for faster and more reliable mobile connectivity and faster expected price erosion of 5G-enabled devices are the main assumptions behind our expectations for 5G adoption.