After almost 13 years in charge of Singaporean mobile carrier M1, Neil Montefiore stood down at the end of January this year. He plans to work as an independent consultant for 12 months, before beginning a new role-as yet unspecified-in 2010.

As the cellular industry- like most sectors-struggles through the economic downturn, it’s hard not to feel that the timing Neil Montefiore’s decision to stand down as CEO of M1 is spot on. But he laughs off the suggestion that he’s decided to stand down at the most challenging period the industry has faced since the early part of the decade. “That’s not really part of my reason for leaving,” he says. “I want to take on one more project before I move into more non-exec roles and the timing has nothing to do with the economic climate at all.”

Maybe so, but surely he appreciates that this is a good time to be relinquishing corporate accountability. “Well, let’s say it’s a good year not to be actually be responsible for things, but to be advising on them,” he concedes.

The most recent macro-economic crisis through which Montefiore had to navigate M1 was that caused by the SARS outbreak of 2003, which struck Asia particularly hard and came hard on the heels of the telecoms crash. But the current turmoil is something the mobile industry has not previously experienced, he says.

“Generally, you would expect telecoms to be fairly recession-proof,” he says. “It tends not to react too quickly to downturns; it tends to remain stable. In the developed world, telecoms is one of the last things that consumer cut from their spending plans.” The worry, for Montefiore, is that the industry as a whole has become increasingly reliant on developing markets, as the drive for revenue growth has switched geographies. And, he says, we have no experience of how a downturn might impact the world’s emerging economies.

“In the developing world, where there are a lot of prepaid cards, we’ve also been seeing a lot of food price inflation,” he says. “It may be that people will have to decide whether they top up their prepaid cards, or whether they eat, so that part of the industry might turn out not to be quite so recession proof.”

To compound any problems that might be particular to these markets, much of the network build out in developing territories is funded by vendor finance. And at a time of serious financial crisis-with a banking community in disarray-finance is not easy to come by.

“Vendor finance is going to be difficult for the industry to continue,” Montefiore says. “Getting money from the banks is already quite hard, especially the big international ones, which don’t want to lend to anybody. So there may be cash issues  for operators in developing markets that want to extend coverage and capacity.”

Exposure to developing market contractions will also hit the handset sector, he says, which has become dependent on high growth areas for volume sales.

Montefiore expects infrastructure spend to be low during 2009, as carriers look to sweat existing assets. There is a caveat, though: “Operators in markets that haven’t yet embraced HSPA-or even 3G-will have to continue with their investment, because they really need to get up to speed.”

While carriers in developing markets may struggle more than their mature market counterparts, the situation is reversed for vendors, in Montefiore’s view. He expresses concerns about the performance of Western infrastructure suppliers as they struggle with depleted incomes and intense price competition.

“We’ve seen some contraction in the number of infrastructure vendors and we’ve got very strong competition coming out of China now,” he says. “I would hope that the European companies can go through this period and get back into positions where they’re generating much better profits. Because otherwise it means, from an operator point of view, that we risk ending up in a position where there is not much choice in terms of suppliers. That’s a concern, because it will be difficult to drive prices down through competition. The growth from the Chinese vendors has been quite dramatic.”

It is possible that the economic crisis could generate another wave of consolidation in the industry, as smaller, unaffiliated carriers are pressurised by their lack of scale. Fresh from the captain’s chair at just such an operator, how does Montefiore judge the prospects for further consolidation?

“Obviously there’s been a drive for consolidation and growth through acquisition-that goes all the way back to the Vodafone-Mannesmann buy out. But there have been many examples of the destruction of shareholder value during these manoeuvres and I think what we’ll see now is consolidation that is designed to improve shareholder value rather than just grow the business,” he says.

He doesn’t feel that standalone players are necessarily more vulnerable than their multinational competitors. “I don’t think it will be more difficult for smaller players. M is an independent operator, for example, and had very good cashflow and the highest margins of all the operators in Singapore. So I don’t think there’s any inherent disadvantage in it.”

One problem facing the industry might, ironically, be its own resilience. Montefiore speculates that if carrier businesses are seen to be more robust than businesses in other sectors, regulators may intensify pressure on them to bring down prices fo rhte cash-strapped end user, consumer or corporate.

But all the industry can do in the end, he says, is focus on growing the overall business. “It improves the whole economy if you can get communications to a wider section of the population. I think the whole industry, globally-even in the developed markets-should be considering what sort of contribution they can make.”