Two of the largest satellite operators in the world are headquartered in Luxembourg—SES and Intelsat. Luxembourg is aiming to be a broadband hub for Europe. At the forefront of these initiatives is Jean-Paul Zens, Director of Media and Communications of the Luxembourg government. He spoke recently to Satellite Markets and Research Editor-in Chief Virgil Labrador on how Luxembourg managed to achieve its premier status as a media hub for Europe and other issues. Excerpts of the interview follows:
Virgil Labrador (VL):How does a small country like Luxembourg get into the media business ahead of other larger countries? What is it with the Luxembourg culture and political situation that engenders media development?
Jean-Paul Zens: You must understand that if a country has no natural resources and doesn't have its own big market to help its domestic industry and service sector to develop, it has to look for sectors where it can export services and products. If you are so small, you have to rely on exports if you want to increase you wealth.The second point is, if you have a strategic geographic position like Luxembourg in the middle between Germany, France, Belgium, close to Holland and an hour’s flight away to other major cities of Europe then you have a central location. That means you can build a central role especially when it comes to the distribution sector. You should also know that Luxembourg originated one of the major cargo carriers which is Cargolux—a Luxembourg company.
Distributing from Luxembourg makes sense because of its strategic position where there are huge markets in proximity of Luxembourg to target. Luxembourg’s multicultural and multilingual population has the ability to speak a lot of European languages and understand the cultures of its neighboring countries. Unlike the US, Europe is quite a fragmented economy. You would need an understanding or what I would call “intelligence” of the individual European countries or markets in order to be successful. I can say that Luxembourg has learned during the last centuries on how to deal with its neighbors and how also to help them with developing their businesses. A lot of business people from our neighboring countries have used Luxembourg to develop their business Europe-wide. It is easier to do it in Luxembourg than to do it in any other country. Luxembourg is a kind of a neutral place in the heart of Europe.
VL: How does the government promote the development of Luxembourg as a media hub? Does the government provide any incentives to companies?
Zens: I must say that I've been here for a long time in this business of developing and diversifying Luxembourg’s media and communication sector. And from my experience, incentives are certainly not the most important element. We realize that you have to create a business-friendly environment. Attracting companies is kind of a private-public partnership relationship because the government have to rely on new companies for its development. So we will do all we can in order to create a business friendly framework to develop the communications infrastructure, to make sure that the regulations fit the needs of business and of course always have access to top political decision makers. Some say decision-making in Luxembourg is very easy and very efficient.
VL: But are you building facilities? Is there a physical area for companies may locate?
Zens: Yes, we have specialized and dedicated areas where there is first-rate connectivity that serves as a switching point where everything comes together and flows in and out of Luxembourg. One of these points is clearly the headquarters of SES, the global satellite company, and there are other points that act as specialized data centers for e-commerce. They are all connected together with fiber links. I would say Luxembourg is a content distribution hub for the future. We want to be a part of the future which we are convinced is coming rapidly because we think that hybrid TVs will bring Internet and satellite together on the screen and will open new ways of using the satellite to feed content into the Internet. I am convinced that the Internet will empower the satellite and the satellite will empower the Internet, if you combine them the right way.
VL: Luxembourg’s track record has been stellar with radio, TV and satellite businesses. Now you're going into broadband services. What advantages does Luxembourg have as media distribution hub in the Internet age?
Zens: We can count on the advantages as I described earlier and we are getting very positive feedback. In this context we like to point out the companies that are already based in Luxembourg including leading American IT companies such as Amazon, PayPal, eBay and iTunes.
VL: Luxembourg are their European headquarters?
Zens: Yes, some have located their headquarters and others have located functions of their European headquarters here. You’d be interested to know that Skype was founded in Luxembourg by Luxembourg residents and is headquartered here. The American companies I mentioned are the ones who have moved in here the last five years. They can tell you their reasons why they had made their choice and I started explaining part of it. If you have to introduce an American company into Europe, it is a very tough job since Europe means 40 to 50 different countries, 30 different languages and so many regulations. Even though European countries are for the most part integrated into the EU, there are still a lot of differences. Luxembourg is certainly one of those places where you can resolve this fragmentation and have a better start in the business. Normally American companies totally underestimate the complexities of developing their businesses to Europe. We can help them manage through the complexities.
VL:Talking about the satellite business, recently Luxembourg had attracted the biggest satellite operator in the world, Intelsat, to located its world headquarters here. Are you trying to attract more satellite companies?
Zens: You know, Luxembourg is one of the leading financial centers in Europe so some companies also tend to use Luxembourg to organize and optimize their corporate structure. I could imagine that Intelsat’s move to Luxembourg was partly due to the fact that Luxembourg has this optimal regulatory and financial environment in favor of satellite companies.
VL: How do you see Luxembourg developing as a media hub in the next few years?
Zens: I think one has to go back 50 years to see what will happen in the next 10 years because the next 10 years will pass as rapidly as the past 50 years in the technology sector. We have been working with the distribution of content for the past 50 years in the radio sector and then the TV sector and later we added satellites. This is all about distribution of content. I continue to believe that distribution of content will remain an important driver of the Luxembourg media hub initiative and so we will be everywhere from the technology point of view. We will be where content is gathered, transformed, and distributed. Luxembourg will become a major hub for distributing content into Europe. You see in the value chain, I see the transformation part of it, the hosting and archiving part of it, and the distribution part of it. Luxembourg wants to be positioned in all three parts of the value chain.So if you see where we came from, and what we have achieved, I think the chances are quite good that we will succeed in the next 10 years in developing as a media distribution center in the heart of Europe.
For more information on opportunities in Luxembourg go to: www.promoteluxembourg.com
To listen or download the full audio podcast of this interview go to: http://marketcasts.satellitemarkets.com/node/61
