Chris Baker investigates the troubled mobile phone industry following the announcement this week that two Sussex mobile phone companies were shedding jobs.

Britain's first mobile phone call was made a few minutes past midnight on January 1, 1985.

It was the beginning of boom times for mobile phone companies.

As phones got smaller the companies that serviced the industry - making the phones and bits and pieces and running the networks - got bigger.

Vodafone, which made that first call in the mid-Eighties, was Europe's largest company by market capitalisation in 15 years.

The landscape changed too; more than 20,000 mobile phone masts sprang up in Britain and the industry says it needs 100,000 more.

There have also been fears about the safety of the technology, both the handsets radiating low frequency microwaves near the brain and the masts needed to make sure the country is covered.

An American lawyer known for suing the tobacco and asbestos industries is now going after mobile phone companies, among them Ericsson, alleging they have known about health risks but failed to warn users.

He has filed class-action lawsuits in four US states, seeking to force the industry to cover the cost of headsets he says would protect users from possible radiation hazards.

Mobile phone makers and operators insist there is no scientific evidence their products pose health risks.

They cite two studies published last December that found no evidence of increased incidence of brain tumours in people who use cell phones.

There are now more than 40 million mobile phones in Britain - leaving the market, here as elsewhere, at saturation point.

Spending on replacement phones is sluggish as consumers hold up on buying, seeing newer complex versions on the horizon.

Companies have also saddled themselves with huge costs buying licences for new third-generation mobile phones.

Yesterday Ericsson, one of the world's largest mobile phone equipment suppliers, announced it was shedding 12,000 jobs worldwide.

The impact of the economic slowdown in the United States was spilling over into Europe, the Swedish company said.

Ericsson is not alone in its suffering. The world's largest handset maker, Nokia, of Finland, Ericsson's great Scandinavian rival, has also recently announced redundancies.

Equipment makers such as Siemens and Motorola have also shed jobs in recent weeks.

Ericsson's UK headquarters in Burgess Hill employs a third of the Swedish giant's total UK workforce.

The HQ is reported to be safe although there are fears some of the 500-plus people it employs in Sussex could lose jobs.

Union officials were meeting Ericsson yesterday to find out details of UK job losses.

The Burgess Hill offices house sales and marketing departments, as well as software development for fixed and mobile phone networks.

Ericsson, the world's largest maker of mobile network equipment, had already announced it was to stop making its own handsets, although it would still market phones with its brand on made by another company.

Production would be transferred from high-cost Sweden and the United States, to eastern Europe, the Far East and Latin America.

Ericsson also confirmed it was in talks with the Japanese electronics giant Sony about integrating their mobile handset businesses.

Last month Ericsson said it was closing two British factories with the loss of 1,200 jobs in Nottinghamshire and Scunthorpe.

Worldwide Ericsson employs 100,000 people.

Hosiden Besson, meanwhile, employs 240 people at three sites in Hove and Portslade.

It also announced it was making people redundant this week, blaming a shrinking market, the high pound and the consequences of economic worries in the United States.

Hosiden Besson, which makes accessories for mobile handsets, as well as test equipment and network connection equipment for the telecoms industry, expects a third of its workforce could go.

The difficulties the industry was experiencing were not a "short-term blip", Hosiden Besson's managing director Richard Edwards said.

The head of policy at Sussex Enterprise, Mark Frood, however, said the long-term future for the industry looked positive.

He said the future of the internet was linked mobile phone technology and it was likely to continue as one of the fastest-growing sectors.

Speaking to The Argus earlier this week, he said: "In the long term there are positive signs of growth.

"This is a short-term issue and some companies will lose staff while others gain staff."