Telenor, the Norwegian mobile phone operator, said it had picked the Chinese company and a US partner to replace its entire wireless infrastructure in Norway and upgrade the network for fourth-generation services.
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The loss of a big contract in their Nordic stronghold underscores the challenge facing Ericsson and NSN as competition from China increases and capital expenditure by mobile operators remains weak.
Huawei has already overtaken Alcatel-Lucent, the Franco-American company, to become number three in the equipment market after Ericsson and NSN. It probably doubled its share to 17% over the past year.
The contract to build a 4G network in Norway shows that Huawei is becoming a force in even the most advanced markets.
Ragnar Kaarhus, head of Telenor Norway, said, “This is the biggest upgrade of the mobile network in Norway we have ever carried out. Huawei was chosen for “a combination of technical quality, reliability … and commercial terms”.
The Financial Times said the company is privately held and secretive over the identity of its shareholders. It was founded by Ren Zhengfei, a former officer of the People’s Liberation Army, fuelling speculation about possible ties to the Chinese military.
Security concerns were among the reasons why the US government blocked a bid by Huawei and Bain Capital to buy 3Com, a US rival, last year.