Mobile industry executives at the sector's biggest annual fair are under no illusion as to how tough this year will be, with even the world's largest operator, China Mobile, feeling the impact.

But many executives at the Mobile World Congress in Barcelona pointed out that, unlike the banking and automobile sectors, the telecoms industry did not need a bailout and that that it was uniquely placed to help, through new technologies and investment.

On the first day of the trade fair, executives pledged to adapt to the changing environment which has forced consumers to cut back on new handsets and long term tariffs.

I think this is a super interesting time to talk about the mobile industry, Microsoft CEO Steve Ballmer said at the opening of his company's press conference.

We are really trying to figure out how to respond to the global economic downturn, the head of the world's largest software maker said.

I have said before that what we are going through is more of a fundamental economic reset, as opposed to a recession.

China Mobile, the world's largest mobile phone group by subscribers, said it had seen the impact from the downturn as workers made redundant by closing factories returned to rural homes and left their mobile phones behind.

It said international calls were also lower due to the fall in exports.

But Chief Executive and Chairman Wang Jianzhou said the group still saw huge potential for growth in its domestic market and would remain cautious in its approach to international acquisitions.

Kai Oistamo, the head of Nokia's handset unit, told Reuters he expected a long downturn.

(The) environment is impacting everybody, he said. It is impacting every industry and we do not see any sign that there would be a quick recovery in the overall economic environment, more likely it is going to be deep and long economic downturn.

Jeffrey Sachs, special adviser to U.N. Secretary General Ban Ki-Moon and director of the Earth Institute, laid bare the severity of the downturn. But said he thought the mobile industry was well placed to get through it.

The world has experienced a dramatic decline of paper wealth ... in a short period of time, he told a press conference. Between 12 and 24 months, the world has experienced perhaps a loss of wealth on paper that is roughly 70 percent of one year's global income.

And a shock that big is leading to a dramatic decline in consumption. (But) I believe this sector will display resilience in its own growth because it's a technology that is still in a dramatic, even revolutionary up phase.

And it's such a powerful technology that it will drive important innovations.

Alexander Izosimov, Chief Executive of Russia's number two carrier Vimpelcom also chose to highlight the positives surrounding the industry, but said governments and regulators needed to make quick and supportive decisions to allow the companies to invest correctly.

We are lucky, that unlike many other industries, we are dealing with something which is absolutely guaranteed to expand in the future, he said.

Human demand for communication, knowledge exchange, information is truly insatiable and we're in the midst of it, so therefore, our growth is absolutely secure.

(Reporting by Kate Holton; editing by Guy Dresser)

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