Economic crisis clouds mobile trade fair

Attendance down 25% for Barcelona event, analyst says

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

The trade fair is still the industry's biggest gathering but it has been noticeably easier to move around among thinner crowds, and visitor numbers were reported to be down 9%.

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.

Richard Windsor, a technology analyst at Nomura, estimated after the first day that attendance might be down 25%.

"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 said.

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 big players had reduced delegations to cut costs.

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

"There's a better sense of urgency. Recession brings focus. I think we'll look at it in hindsight as a turning point," Symbian Foundation executive director Lee Williams said.

Peter Bauer, chief executive of loss-making chipmaker Infineon, said: "The mood is not depressed. It's more: 'Hey, let's deal with the issue'. They all do reduce their cost base. No one knows exactly where the market is going."

Alexander Izosimov, Vimpelcom's company and also chairman of the GSMA Assn., said participants were more focused on the present this year.

"What people need now is ... answers on what will happen next, rather than looking to 5, 10 years out and what will happen with the technology. So hence, this is probably less glamorous but a very pragmatic event."

Thomas Teckentrup, a European manager at Toshiba, struck a similar tone, saying: "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, adding there were increasing risks as customers looked for cheaper deals.

Still, the event remains a place for top industry players to meet, maybe with less entourage.

Texas Instruments wireless chief Greg Delagi said: "I'm still having high-impact meetings. There are just less people in the meetings."
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