GSMA Mobile World Congress: Mobile industry warned of tough times ahead

This week's Mobile World Congress in Barcelona has seen the International Telecommunication Union (ITU) launch a report into the "harsh realities" the mobile industry faces.

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The report, Confronting the Crisis: Its Impact on the ICT Industry considers how the industry can position itself for recovery in the future.

The report draws on analysis from industry experts and international institutions. As the established order is overturned, it says convergence in the ICT industry will accelerate, with the emergence of new players with new business models.

Firms' ability to weather the economic storm will depend on their ability to invest for the future and explore new opportunities to benefit from the eventual upturn.

For an industry founded on innovation, the current turmoil will create openings for nascent ICT companies, says the report.

Confronting the Crisis finds that although credit is now less abundant and more expensive, with financing costs for operators on average 3% to 4% higher year-on-year, savvy operators can take advantage of the economic turmoil to reposition their services for the upturn.

Funding is still available for players with sound business models, established demand and early projected cash flows. But alternative sources of financing are needed, with a growing role for government financing and economic stimulus packages, says the report

"Despite difficult times, there are reasons to be optimistic," said ITU secretary general Hamadoun Touré.

"Having contributed consistently as a high-growth sector in its own right, ICT can now power economic recovery across all sectors. Along with stimulus packages put together by governments, the ICT industry must continue to invest in infrastructure and the roll- out of cost-effective services, such as next-generation networks."

Touré said innovation was the key to recovery.