The huge communications vendor displaced Alcatel-Lucent to take its place behind global leader Ericsson and Nokia Siemens Networks in quarterly revenue, according to market research company . Alcatel-Lucent had the fourth biggest sales in the quarter, followed by ailing Nortel Networks. In the top three, Ericsson had 33 percent of the market, followed by Nokia Siemens at 20 percent and Huawei at 15 percent. A year earlier, Huawei had been ranked fourth, with just 8 percent.

The biggest development in the quarter was a set of contracts signed for 3G networks in China, the first such deals in that country. Biggest among these was China Unicom's US$5 billion [b] tender for WCDMA (Wideband Code-Division Multiple Access) base stations. Huawei took the biggest share of this revenue, 30 percent. But the company isn't relying only on contracts in China, nor on low prices, to gain on its international competitors, Dell'Oro analyst Scott Siegler [cq] said.

The majority of Huawei's mobile infrastructure sales have been in Europe, where the company grew dramatically in 2008 and counts Vodafone, Telecom Italia and Deutsche Telekom among its customers, Siegler said. The company also plays in Latin America, though it has yet to make significant inroads into North America.

"It's good technology, and it's a fantastic price," Siegler said.

The competition has adjusted to meet the challenge, according to Siegler. In China as well as India, the world's other huge, fast-growing market, Ericsson has been able to match Huawei's prices through volume, he said. In some recent showdowns for deployments in India, Ericsson came in with the lowest bid. Other Western manufacturers are also starting to match Huawei, Siegler said.