Claude Demuth, CEO of Lu-Cix and chair of Luxchat’s governing board. Photo: Lu-Cix

Claude Demuth, CEO of Lu-Cix and chair of Luxchat’s governing board. Photo: Lu-Cix

New instant messenger service “Luxchat” became available to businesses as well as the general public at the Luxembourg Internet Days event in November. The service has enormous commercial potential, say its creators--Delano’s sister publication Paperjam wanted to find out more.

Will the people and businesses of Luxembourg prefer Luxchat to Whatsapp? Available (and free) since 7 November, this instant messaging service describes itself as “trusted, guaranteeing the security and encryption of end-to-end exchanges.” Another guarantee is that “user data will not be used for commercial purposes.” Here’s how it works.

1. Financing

There are three major players behind Luxchat: Lu-Cix (an economic interest group representing Luxembourg’s main telecoms operators); the Chamber of Commerce; and the digitalisation ministry. Lu-Cix and the Chamber of Commerce are co-financing the project, and--according to Claude Demuth, CEO of Lu-Cix and chair of Luxchat’s governing board--“for a very reasonable amount.”

It is difficult to put a precise figure on the cost of the project, given its decentralised nature, adds Demuth. “I can mention the contribution made by Lu-Cix,” he says, “which customised and adapted the application: three to four engineers worked full-time on the project for three to four months. In addition, there were external costs of around €100,000.”

Four sponsors have also made financial contributions: the IT Management Centre, Lu-Cix, the Luxembourg House of Cybersecurity and Post Luxembourg. In addition, Demuth points out, the digitalisation ministry is providing support by allowing Luxchat to reuse--and adapt--the Luxchat4Gov app, launched last May for public sector employees.

2. Commercial potential

For now, Luxchat is offered for free by five service providers: Lu-Cix, ION/Mbox, Luxembourg House of Cybersecurity (for cybersecurity professionals), Luxembourg Online and Mixvoip. This list is likely to grow, according to Demuth: “If we have a dozen service providers in two years’ time, that would be good.”

These providers must meet a number of conditions: they must agree not to sell advertising on the app and not to monetise user data. What, then, is in it for them? “There’s a marketing interest in getting the word out,” says Demuth. “Some are thinking further ahead: by offering a free version for the general public, they are acquiring the skills to develop--as Luxchat’s governance allows--additional paid services from a B2B perspective.”

But for the Luxchat representative, the most important market remains B2C: “Our messaging service offers a more secure way of communicating with customers than email and SMS. We’re seeing interest from a number of sectors: industry, healthcare, telecoms, transport, etc. If we can achieve critical mass, then the commercial potential is enormous.”

When contacted by Paperjam, Orange expressed an interest in becoming a Luxchat provider. “Today, we interact with our customers via WhatsApp and Messenger. We would be very pleased to offer this new channel to our customers in the near future,” says a spokesperson.

For his part, Post Telecom director  says: “For the general public, Post clearly recommends using Lu-Cix as a trusted partner. In the context of tailor-made solutions for businesses, Post will analyse in due course the usefulness of becoming, itself, a service provider.”

3. Data storage

Luxchat user data and messages are stored in a decentralised manner on the servers of the various service providers. “A common disk makes no sense: it would represent a single point of failure for the country,” explains Demuth.

Users choose their service provider. While the general conditions of use and confidentiality policy are identical from one provider to another, each bears legal and technical responsibility for storage, explains the Luxchat representative. “Formally, if a user is not on the same server as their communication partner, the data is duplicated: each of the two providers is responsible for the copy that is on its own server. It works in a way similar to email.”

4. Identification

To register (for the time being) you need a Luxembourg telephone number. And to create an account and connect to Luxchat, you must go through LuxID. A joint effort by Cactus, CFL, Post Luxembourg and RTL, and announced last summer, LuxID was presented by its makers as “a common secure login solution offering a unified experience on websites and apps provided by Luxembourg companies targeting the Greater Region market.”

LuxID has been available since 7 November. To date, says Post, its only customers are Luxchat’s service providers. “Other customers will follow shortly,” it adds. “As LuxID is compatible with Post Luxembourg’s web application login, all users of MyPost applications can already connect to LuxID using their MyPost credentials.”

Can LuxID be seen as an authentication solution competing with LuxTrust? “In the context of Luxchat: no,” says Demuth. What about access to data by the courts? “In the event of a judicial investigation, Luxembourg law enforcement agencies or courts may ask LuxID for the personal identifying data (e.g. mobile number) of a specific Luxchat user.”

This article in Paperjam. It has been translated and edited for Delano.