As large employers, such as Citigroup, prepare for massive layoffs, the bad economic news is starting to hit home for consumers afraid of losing their jobs and already looking for ways to tighten their belts.
The recent spate of poor earnings from all kinds of consumer companies, like coffee giant Starbucks, tell us that consumers are nervous about the economy. And it looks like consumers will continue to be skittish about spending over the next several months. Last week Nokia, the largest maker of mobile phones in the world, announced it's already seen sales slip, and it projected that sales will likely continue to be weak in the fourth quarter and into 2009.
While it's obvious that consumers are cutting back spending on certain luxuries like lattes and new cell phones, I wonder if they are also looking to cut spending on monthly services, like wireless, broadband, and cable TV. I recently looked at my stack of monthly bills to find where I could trim some fat from my budget, and I realized that aside from my electric bill, my cable/broadband and wireless phone bills are my top money suckers every month.
Executives from some of the nation's largest wireless and broadband companies have said publicly they don't expect to see huge numbers of people canceling service. For one, wireless, cable TV, and broadband services have become staples in American culture. And second, most people are under some kind of contract for one, if not all, of these services. So canceling their service outright could end up costing them more.
I know I couldn't do without my cell phone, cable TV, or broadband services. But maybe I could manage with less.
That's exactly what CEOs from Sprint Nextel and Verizon Communications have said they expect people to do over the next few months. They expect to see consumers curtail their spending somewhat by cutting back on services. This might mean reducing the number of voice minutes on a voice plan or cutting down the number of channels received as part of a cable TV service. Or maybe people will downgrade from a higher-speed broadband connection to a slower connection for a better price. Perhaps it means getting rid of a traditional voice landline or even a second voice over IP line.
I'm working on a story on how the financial crunch is affecting consumers' decisions about these services, and I'd love to hear from CNET News readers. If you are thinking about cutting back on your cell phone or cable TV/broadband service or if you've contacted any of your providers to try to work out a better deal, please e-mail me. I really want to get firsthand accounts from consumers about how they plan to save money during these turbulent times. Feel free to e-mail me at firstname.lastname@example.org.