Bailout Bill Failed: What About Wireless?

The bailout bill failed to pass the House on Monday and rampant fear tangled the financial markets, sending the Dow Jones industrial average down hundreds of points — closing 777.68 points down, its largest loss ever. Some souls may be nervously biting nails and wondering what’s next, and pondering whether the American banking industry will collapse completely, but analysts tracking the wireless scene seem confident that, like a cockroach after nuclear annihilation, or Gloria Gaynor after a bad breakup, mobility will survive.

At the heart of the rationale are the twin engines of enterprise demand and wireless operator business models.

Enterprises have likely already invested in wireless infrastructure and mobility plans, and will now be looking to leverage that embedded asset to do more with less, as it were, as the economic crisis makes cost-cutting necessary, according to the IDC. IT spending may get scaled back overall as business loans dry up, but wireless will be one of the last to get the Xacto-knife treatment, since technologies like mobile PBX extensions and mobile VoIP can go directly to improving companies’ bottom lines.

On the cellco side, the idea is simple: Can you imagine living without a cell phone? For many people, from extracurricular-juggling parents to road warriors, the idea of going without wireless service is simply ludicrous. In fact, if anything, the landlines will be the ones to go, according to Nielsen Mobile. Already 17 percent of households have gone wireless-only.

“As wireless network quality improves and unlimited calling becomes increasingly pervasive, we expect the trend toward wireless substitution to continue,” said Alison LeBreton, vice president of client services for Nielsen Mobile. “In a tightening economy every dollar counts, and consumers are more and more comfortable with the idea of ditching their landline connection.”

At the recent Goldman Sachs investors’ conference, CEOs from Verizon Wireless’ Denny Strigl to Sprint-Nextel Corp.’s Dan Hesse told audiences that wireless represents a core lifestyle and business tool whose value increases in times of economic hardship. And as smartphones come down in price, it was noted, the more core wireless will become, as data applications make life and work that much more efficient.

That said, it’s worth remembering that wireless CEOs get paid to reassure investors, since carriers are for the most part publicly traded. It’s also worth considering that cellcos have network assets that have yet to make their ROI horizons, and are in general capital-intensive businesses, meaning that the financial markets and lending (or a lack thereof) do play in their orbit, Gloria Gaynor fierceness notwithstanding.

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