Huawei takes third spot in mobile telco gear market

By Tarmo Virki, European technology correspondent

HELSINKI (Reuters) - China's Huawei Technologies HWT.UL took the No. 3 position in the ailing mobile network gear market in the first quarter, doubling its market share from a year ago and bypassing Alcatel-Lucent (ALUA.PA).

Sweden's Ericsson (ERICb.ST) expanded its lead as its closest rival Nokia Siemens Networks NSN.UL lost market share, researcher Dell'Oro said on Thursday.

The telecom equipment market has seen cut-throat competition for new business during the past few years, driven by Asian vendors, and the outlook remains tough.

Alcatel-Lucent has forecast the market to shrink 8-12 percent in 2009, while Nokia Siemens has said the market would fall some 10 percent.

Dell'Oro said in its quarterly market report the market contracted in January-March 9 percent from a year ago, with China 3G tenders helping the market from falling further.

"Intense price competition among vendors vying for share of the Chinese 3G tenders resulted in very steep price erosion, particularly in CDMA," said Dell'Oro analyst Scott Siegler.

The world's top mobile network equipment maker, Ericsson, increased its share slightly to 33 percent share of the market in January-March, while the market share of Nokia Siemens Networks dropped to 21 percent from 24 percent a year ago, Dell'Oro said.

Huawei roughly doubled its market share to 15 percent, while Alcatel-Lucent's share fell to 14 percent from 16 percent, Dell'Oro said.