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Numerous reports and indicators last year showed that western European cellcos would bear the brunt of the wireless downturn in 2009 because of their saturated markets and intense price competition. Now the new year is expected to see several big names reacting to such predictions with cost cutting plans, and Orange is expected to be an early mover. However, the rising use of mobile data continues apace, and will be the main source of hope for the European mobile carriers during the hard times.

Most of the large European operators are said already to be talking to management consultants about cost reduction plans, and Vodafone led the way late last year when it said it would implement £1bn ($1.45bn) of savings (almost 5% of its total) across its territories, to guard against a possible revenue shortfall of a similar size. The others have remained tightlipped about specific plans and targets so far, but research by UK newspaper The Guardian says all the carriers that operate in the UK - Vodafone, Orange, T-Mobile, 3 and Telefonica O2 - will reduce headcount and other expenses in the first half of this year. Its sources indicate that Orange will be one of the most aggressive, although the French company has seen one unexpected bonus, with a sharp upturn in its Austrian business, leading it to offer employees there a job guarantee.

While Vodafone has already axed 450 managers in the UK, and Virgin Media has lost 2,200 positions, thousands more could follow across the networks, which employ about 45,000 people in the country.

The main mitigating factor is expected to be the growth in use of mobile data services, especially based on dongles and, increasingly in 2009, netbooks or embedded 3G laptops. Orange says it added 1.3m 3G customers in the first nine months of last year, driven by the popularity of dongles, plus new pricing plans and enhanced data optimized handsets. Dongle subscriptions surged by 2,000% and 3G by 86%, trends echoed at the other cellcos. Key application drivers were mobile search - use increased by 30%, or 100% where local search was concerned - and social networking. Music downloads rose by 10% in the period and September saw a record number for Orange, at 300,000 full tracks downloaded.

Paul Jevons, director of products, portals and services for Orange, said in a statement that the mobile network was no longer just a channel to deliver packaged content but "a truly interactive channel that fosters the formation of communities through social networking sites such as Facebook and Bebo".

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