Luxembourg: model of a successful muni Wi-Fi network

Earlier this year, Paul Helminger,  mayor of the city of Luxembourg launched a partnership with Esch-sur-Alzette, the second largest municipality in the country, to share the HotCity platform created by the city of Luxembourg. Considered to be the most successful municipal Wi-Fi network in Europe, HotCity is now sharing its expertise with other cities. It is establishing a company called HotCity SA to manage and support the network, and the services to be offered through the network.

“Five years ago,” says Paul Helminger, “the municipality of Luxembourg published a white paper  (eCity Luxembourg – Ville Virtuelle, PDF in French) explaining its intention to digitize all documents and procedures governing the relationship between the city and its citizens. We started with a portal and a back office to manage it. In parallel we equipped schools with computers, and started to educate people on how to use the portal. The third step we took was to allow people to log onto the city’s website while they are on the go, so we installed several Wi-Fi hot spots in the city.”

Luxembourg HotCity is a platform for wireless services offered to citizens

Launched in July 2007 with a small number of Wi-Fi hot spots, HotCity has expanded and now covers half of the city with 200 Wi-Fi access points. For a short period after the launch, use of the network was free of charge to all users. Since November 2008, the city has been offering paid and free access. The network expects to serve 85,000 people by the end of 2009 with 450 Wi-Fi hot spots (an investment of €2.5 to €3 million). “We just want to offer a network that is accessible from everywhere to our all citizens,” explains Helminger, “just like GSM. One of the key issues in the project was the early partnership with Cisco. Not only did they provide the equipment for the network, they also lent their considerable experience to the design, management and expansion of the network.”

Neutral and open network is mandatory

The most important decision that Helminger took was to create an open network:

“We understood that the majority of failures in municipal network developments all around the world was the result of (1) either the network being limited to the users of one operator or (2) the network delivering only one or few specific services.”

The three goals of the city for the wireless network were to improve communications for the day-to-day operations of municipal workers, to give all citizens better mobile access to municipal resources and services, and to open the network to a large set of commercial services.

The focus of the first part of the network’s launch was to serve young people and business users who are more tech-savvy. The city knew it could not do this alone so it entered into discussions with the incumbent operator, P&T Luxembourg, and with other partners. Helminger says, “We wanted to keep control of the infrastructure and turn it into an open platform for operators, service providers, and of course, for the city itself.”

From Cisco’s point of view, the challenge was to create a secure expandable network open to all wireless data technologies as RFID (i.e. the network is not tailored to any specific service) and to be very flexible in terms of management so that it allows partners to add services, alongside a private (enterprise) network for the city’s workers.  “Starting with a Wi-Fi hot spot,” says Luc Imbert, manager of the project at Cisco, “we have designed and developed an entire platform which can manage wireless data on a large scale.”

Dealing with the incumbent

Knowing the collaboration with the incumbent was crucial to the success of the project, the government of Luxembourg and in particular, the Minister in charge of Information Technology, supported the city’s negotiations with P&T Luxembourg, which owns most of the fixed network infrastructure in the city. The city and P&T Luxembourg agreed to split the network infrastructure: the municipality created its own network in some parts of the city, but uses the incumbent’s network in other areas.

The creation of HotCity SA, a company in which the incumbent is a commercial partner and manager of the network, evolved as a logical extension of the city’s earlier partnership with the incumbent. “We bought part of the incumbent’s network,” says Helminger, “and P&T Luxembourg will act as the commercial arm of HotCity. It must, however, keep the network open. The network infrastructure is owned by the municipality  which makes it available to HotCity SA and the municipality keeps a majority stake in HotCity which is managed by P&T Luxembourg.”  The new company will retain the original eCity team to ensure that the municipality’s interests are always represented within the new company.

Delivering an unrestricted set of services

After the initial free service launch, the degree of awareness about HotCity has risen to 60% of people who use wireless data services. The network is now split into two parts: (1) one which allows access to free services (excluding access to the Internet) and (2) another which offers commercial services (including Internet access). Information as bus schedules, finding a parking spot, local weather, municipal bike rentals, hotels, shopping, emergency services  are location-based and free. “We want to facilitate life in the city, and we continue to add services,” says Helminger. “Some of them will be free if they have a public utility, while others will be charged at reasonable rates.”

The municipality has set up a research program to develop new services that respond to citizens’ needs. Any operator or service provider can propose a service or application for the network. New services will be evaluated by HotCity through a formal process and put in place if it improves the life in the city and can benefit users. The platform allows almost any kind of existing or future service to be hosted, but the city retains the final say. For the mayor, the next step is to allow citizens to create local discussion groups where people can exchange information and tell the city what they want to see.

“I’m making it easy for people to scream at me if something is going wrong,” says Helminger, laughing. “On a more serious note, we are working to introduce an electronic signature service for exchanging digitized documents.” The municipality is talking to utility companies to deploy automatic metering and monitoring of water and electricity.

Tariffs to become more flexible

The price for access is €2 for an hour, €8 for an entire day. A monthly subscription costs €17. Helminger says:

“We are still refining our business model and developing a pricing scale with some kind of bundle to make HotCity services more attractive and useful for a larger part of the population. We found that users don’t like the 2 hour minimum pricing, because they use it just to get access to certain specific information at one time, so we are thinking of more flexible tariffs.”

Today HotCity has about 12,000 registered users. At times the network gets close to 4000 people accessing its services in one day. The city has seen a slowdown since November 2008 when the service began charging users. At present, 60% of users access the free services. The proportion of iPhone users is also growing rapidly.

Covering the whole country

“Our ambition,” concludes Helminger, “is to sign agreements in order to spread HotCity platform throughout the country and allow all 500,000 Luxembourg citizens to access it. Each city would bring its own network infrastructure and use HotCity as a service platform. We are in discussions with French cities, as Longwy and Thionville, as well as cities in Belgium. We are also talking to transportation companies because more than 100,000 people from France and Belgium cross the border every day to work in Luxembourg. They should be able to access HotCity services during their commute. Our goal is not to create a new operator because there are already many operators. We just want to bring the services the people need on a daily basis.”

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Comments

  1. I have reservations about this network. This is what bothers me: the incumbent operator, P&T Luxembourg, is running the network. There’s a built in conflict of interest right there because if the city is leasing out capacity to all service providers, what is to stop P&T Luxembourg from doing funny things to degrade the service of the other providers who happen to be its competitors?

    Isn’t there anyone in Luxembourg who can run this network other than P&T Luxembourg? Or is this one of those politically expedient things to do because the incumbent has a lot of power in the government? I am sick and tired of politicians bowing down to the bullying tactics of incumbent operators!

    A city that owns the underlying infrastructure – fiber, wireless or both – should ask a private firm to run it for them if the city cannot do it alone. But it should NOT be in the incumbent operator. The city should allow service providers to lease capacity on the network on a non-discriminatory basis so those service providers can serve their own customers. Luxembourg is doing this so that’s great — the separation of the infrastructure layer from the service layer.

    As for services that will be offer on the free part of the network, the city’s portal, why not create something like an App store where the mayor lists the proposed applications and services and users get to vote on which ones they like and which ones they don’t like?

  2. Dear Esme,

    The App. store is a good suggestion!

    I have visited Luxembourg (on invitation by Cisco) last year and attended a seminar in city hall where the mayor gave a good presentation.

    P&T Luxembourg’s decision to cooperate with the network was a defensive step, is what I understood unofficially. Luxembourg is surrounded by countries like Germany, Belgium and France and P&T was affraid that for example Deutsche Telekom would otherwise have entered their market. In fact this is a compliment for the way the city initiated the network. If you catch the attention of the incumbent(s) you at least do something right.

    In fact is KPN Netherlands’ decision to cooperate with Volker Wessels in rolling out fiber a similar step. Volker Wessels is that strong financially that KPN must have realised that the roll out of fiber to the home would have happened anyway, with or without them.

  3. Dear Esme, dear Leo,

    it is very clear that the City of Luxembourg has initiated this unique project and will keep the hands on the grips. The incumbent operator is one partner among other existing partners and can by no way harm the open business model designed right from the start by the City of Luxembourg. All ISPs and ASPs are invited to join the platform (cf existing guidelines on http://www.hotcity.lu) and offer their specific services to existing and future users. That’s the best way of guaranteeing a sustainable success for a municipal wifi project.

    best regards,

    Pol Goetzinger