Telecoms industry gets real in Barcelona

BARCELONA, SPAIN: Delegates to this year's Mobile World Congress in Barcelona are getting down to the business of cost-cutting and doing what deals they can as the industry adjusts to the new realities of the global economic downturn.

The trade fair is still the industry's biggest gathering but it is noticeably easier to move around among thinner crowds, and visitor numbers are reported to be down by about 9 percent.

Hotel accommodation, normally fully booked a year in advance, was still to be found in the immediate run-up and a spokesman for the Hotel Association in Barcelona said last week about 17.000 of 25.000 hotel rooms available had been booked.

A Telefonica spokesman said the company had sent about the same delegation as last year to the MWC but a manager from Vodafone in Spain said the big players had reduced their delegations to cut costs.

Executives said meetings with customers were sober but not overly pessimistic.

"The mood is not depressed. It's more: 'Hey, let's deal with the issue,'" said Peter Bauer, chief executive of loss-making chipmaker Infineon.

"They all do reduce their cost base," he said. "No one knows exactly where the market is going."

Thomas Teckentrup, a European manager at Toshiba, said: "The atmosphere is probably a bit tense. People are moving into a mode of constructive optimism. We share that very much."

Vodafone Chief Executive Vittorio Colao said the industry needed more cooperation between operators, hardware and software makers and handset manufacturers.

"Intrinsically we are resilient," he said, but warned there were increasing risks as customers looked for cheaper deals.

Richard Windsor, industry specialist at Nomura, estimated after day one that attendance was down as much as 25 percent.

"Taxi, lavatory and sandwich queues are all down substantially on last year meaning that MWC is an accurate reflection of life in the mobile phone industry," he wrote.

"Frankly most of the companies that we have met so far have talked of cost cutting and survival. This is in stark contrast to last year when the story was all about investment and expansion," he added.