Business Watch: 2009 forecast

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Few people in the mobile industry will miss 2008. It was the year the credit crunch morphed into the global financial crisis, sucking almost every sector of the economy – including telecoms – into its dark void.

With Britain, the US and much of Europe now in recession, the mobile sector will continue to feel the pain this year.

Nokia has already predicted that handset sales by all manufacturers will fall in 2009 for the first time in eight years. I’m not going to argue with the world’s biggest handset maker on that one.

An inevitable side effect of the recession will be further cost cutting by the UK networks. Vodafone for instance has already announced plans to slash costs by some £1 billion across its global empire in a bid to maintain profits and boost cash generation despite slowing growth.

That cost cutting target could well rise before the year is out. As will the number of redundancies made by network operators and handset makers.

With top line growth slowing, the pressure is on to eke out profit growth, and staff costs will come under intense scrutiny. As ever, the cleverest companies will make sure that they don’t make the error of letting their best people go just when they are needed the most.

For more 2009 predictions on Carphone Warehouse, Nokia, RIM, Samsung, LG, Google, O2, Apple, Vodafone, Orange, as well as regulatory concerns and European and Global issues, see Mobile News issue 430 (January 12, 2009).

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