The credit crunch and the slowing economy is beginning to impact everyone, from mobile phone makers to phone companies. The economic woes are now spreading to other parts of the telecom food chain, taking down everyone from equipment makers to chip companies. And this is just the start…trouble has once again returned to the world of telecom. Earlier this month, Cisco Systems (s CSCO) came out with an unusually downbeat forecast. The company, whose sales have traditionally seemed to defy gravity, admitted its numbers were going to fall for the first time in five years. Meanwhile its book-to-bill ratio — a key metric of future sales strength — has already dipped below 1.0.

“We are seeing customers, not just in the financial, automotive or retail sectors, but across most of our enterprise industries, facing what they view as a very challenging business environment,” Frank Calderoni, Cisco’s chief financial officer, told Wall Street analysts on a conference call. The problems, he said, have spread worldwide.

Cisco is widely considered to be a bellwether of the telecom and infrastructure sector. Its gloomy outlook, therefore, proves just how negatively affected the industry at large will be by the vise-like grip of the economic downturn.

AT&T’s (s T) Ralph de la Vega, CEO of that company’s mobility and consumer markets division, told me that anything related to the housing market was going to be in trouble. What that means is that the demand for broadband connections, voice lines and video services is going to slow drastically. Why? Because the growing number of new homes translated into strong demand for new communications services such as cable and broadband.

Now that the housing market has ground to a halt, sales of such services are going to decline, which in turn means that the service providers — from AT&T to Time Warner Cable (s TWC) — are going to have a tough time spending more dollars on their infrastructure. And that is going to impact sales at equipment makers.

After all, if there are fewer broadband connections, the number of modems needed will decline, and so will the demand for back-end gear to support those modems in broadband providers’ central offices. Similarly, if the demand for pay-per-view movies remains flat or declines, then the service providers won’t need to spend money on buying, say, video servers.

This is not a hypothetical situation. During a conference call to discuss its most recent quarterly results, Time Warner Cable said it was seeing lower gross additions and an increased churn in the number of customers. More importantly, those customers were buying fewer pay-per-view movies, premium channels and other add-ons, such as digital video recorders. This means its average revenue per user is going to decline. Since cable companies depend on their ability to generate gobs of cash from their customers to finance the buildout of their networks, cash constraints will mean fewer dollars to spend on gear.

U.S. phone companies, especially the ones with exposure to formerly hot housing markets in Arizona, California, Texas and Florida, are getting hit the hardest. AT&T and Qwest (s Q) are both seeing steep declines in their wireline connections and a slowdown in demand for Internet connections. This isn’t going to get better anytime soon.

As a result, analysts expect carriers will spend a lot less money next year. UBS estimates that carrier spending will decline 4 percent in 2009 after growing 1 percent in 2008.

Similarly, a slowdown in the economy means that corporations will have fewer dollars to spend on their infrastructure, which is bad news for switch and router makers. Cisco’s gloomy outlook confirms that. So buckle up, guys. Trouble has returned to telecom land.

This article also appeared on Businesweek.com.