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Huawei is struggling to gain infrastructure deals in the US and has cancelled plans for a new plant in India because of low demand for its telecoms gear there. But the Chinese giant is expanding rapidly in Europe, where it has overtaken its rivals in the LTE macro base station sector, according to new figures from NPD In-Stat.

In 2011, Huawei emerged as the leader in the nascent but rapidly growing LTE macrostation space, narrowly beating Ericsson and Nokia Siemens, according to the analysts. This was a major change from 2010, when Ericsson dominated the fledgling space in its native region and sold twice as many LTE base stations as Huawei.

However, despite this success, there are still risk factors for the Chinese OEM. The sector is very immature and will be subject to much change as it gains scale. And Huawei is still often seen in the trial or commercial pilot phases - sometimes to put price pressure on other suppliers - but then excluded from the far larger wide-scale deployment stages. For instance, Telekom Austria used Huawei LTE gear for its pilot in capital Vienna but has awarded its next stage contracts to Ericsson and NSN.

And even in its buoyant 2011, Huawei was heavily reliant on a single customer, Vodafone Germany, which had one of the most aggressive early roll-outs in Europe but will inevitably slow its investment as its network reaches its initial target coverage. In-Stat believes this operator accounted for almost half of Huawei's LTE base station sales in Europe last year. Its other key strength was in eastern Europe, where its cost effectiveness has a particularly important influence. In the western portion of the continent, Huawei was neck-and-neck with Ericsson and Alcatel-Lucent, but shone in the east, as did NSN.

By 2015, the market will have stabilized and the long term winners will be clearer. In In-Stat's view, NSN will emerge as the European LTE leader then, with Ericsson dominating in the eastern region. About 16% of the operators which will be rolling out by 2015 have not yet made a vendor choice, and others will swap suppliers as they expand their networks, or narrow a multivendor contract to a single partner.

Meanwhile, India is far away from being a major LTE market, outside of the TDD flavor, but its 3G infrastructure deals are hotly contested - and here Huawei has encountered some of the same political hostility as in the US, officially because of security concerns though with a strong whiff of commercial paranoia too. The vendor has dropped its plan to set up a new factory in the subcontinent - itself a move designed to soften the stance of Indian authorities. It will instead rely on a unit of contract manufacturer Flextronics to make most of its equipment for that market, an unnamed senior executive told Dow Jones Newswires, citing poor demand for telecoms kit in India.

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