ONLY five months ago, when a mobile phone was the must-have present for Christmas, the telecommunications industry was riding on the crest of a wave.

Nothing, it appeared, was going to halt the meteoric rise in demand for handsets.

While the economic boom in the industry hasn't quite turned to bust, there are now grave concerns for its future.

The 12,000 job losses announced yesterday by Ericsson follow similar bleak announcements from rivals Motorola, Siemens and Marconi.

Our region is now a major player in the telecommunications industry and has good reason to be alarmed at these recent developments.

Thousands of jobs in call centres and manufacturing depend on the continued success of mobile phones.

The £22bn bids tabled last year for the next generation of mobile licences were based on forecasts for consistent growth.

Today, those forecasts look misplaced, and those bids look astonishingly excessive.

This financial burden coupled with a slowdown in demand is not a recipe for long-term health.

Perhaps, the time has come for the telecoms firms to admit they were over-zealous and made grave errors of judgement in the auction of licences.

And perhaps, this may persuade the Treasury to release some of the excessive profit it made from the auction in the long-term interests of a vitally important industry and the many people who depend on it for their livelihoods.