Need economic stimulus? Just look to the mobile phone industry.
That's the message the head of the mobile phone industry's trade association, Alexander Izosimov, brought to the World Economic Forum, where the world's political and business elite have come to debate a way out of the global economic crisis.
"We invite governments and regulators to take a longer-term view of the industry and appreciate the role of the industry as a catalyst for the rest of the economy and a very stimulating factor, rather than being an immediate source of cash," Izosimov told The Associated Press on Saturday.
While other major industries are seeking bailouts, Izosimov said the mobile phone industry is healthy and willing to invest. But he said it won't remain so if the regulatory environment remains uncertain and governments try to squeeze more money out of operators for licenses for the next step in speedier mobile network technology, LTE, or Long-term Evolution.
"They are coming up now with an auction idea, hoping to raise, say, billions of euros for LTE. It ain't going to happen," said Izosimov, who besides running the GSMA, which represents most major telecoms operators, is also the CEO of Russia's No. 2 mobile phone company AO VimpelCom.
"Industry will postpone the decision basically. I am not sure what will happen," said Izosimov.
Another reason to promote the march of the mobile phone: every increase of 10 percent in mobile phone penetration yields 1 percent growth in annual GDP, Izosimov said.
According to GSMA, global GDP would rise 0.8 to 1.2 percent a year if broadband penetration worldwide were to rise to the western European levels of 54 percent.
Qualcomm CEO Paul Jacobs, who joined Izosimov in Davos, said delays in the transition from analog to digital signals for broadcasters in the United States has had an effect. He said the San Diego-based company has invested hundreds of millions of dollars of investments in a new wireless service to allow consumers to watch live television on wireless phones, but the investment is stagnating.
Qualcomm was prepared to launch the service through a subsidiary in four U.S. markets on Feb. 17 — but Congress has postponed the transition, which will free up spectrum for mobile phone use, because many households aren't ready.
"When will the spectrum be allocated for the digital TV transition? We are sitting there with a huge investment in infrastructure equipment that we won't be able to use. You can't just change these things willy-nilly because it really does freeze investment," Jacobs said.
Both Jacobs and Izosimov said the economic crisis makes it difficult for the industry to project how the market will behave this year So far, there have been few signs of softening, with strong sales of the smart phones, which combine computing with mobile telephony like Apple's iPhone, at sustained prices.
Qualcomm, whose main business is making chips for handsets, has dropped its forecasts for third-generation handset shipments globally from 600 million in 2009 to 565 million.
"Consumers are buying high-end smart phones still, which is surprising in an economic crisis. But the fact of the matter is that people are seeing the value in wireless data," Jacobs said.
The mobile phone industry may be well-placed to weather the crisis, said Izosimov, citing the tendency in an economic storm for people to turn to entertainment and information.
"People would tend to deny themselves something else, but maintain their connections," he said.