Verizon ( VZ) inked a three-year pact to use Lucent's ( LU) LamdaXtreme networking technology.

Terms weren't disclosed, but New York-based Verizon said it will install the optical networking gear on its next-generation nationwide ultra-long-haul optical long-distance network. Verizon said it seeks to expand its service portfolio for large business and government customers by connecting existing regional networks across the country via an Internet protocol backbone.

New Jersey-based Lucent said Verizon is the first U.S. service provider to employ the technology, which uses dense wave division multiplexing, or DWDM.

"LambdaXtreme Transport offers Verizon a system that is able to meet its distance and capacity needs, while continuing to deliver significant savings in operations expenses," said Lucent's Vince Molinaro. "With today's announcement, Lucent is continuing to deliver the cost-effective, technically superior systems our customers are demanding through our complete optical networking portfolio."

The deal comes on the heels of Lucent nailing down a big wireless upgrade contract with Verizon's Verizon Wireless venture.

On Tuesday, Lucent rose a nickel to $3.29, while Verizon slipped 4 cents to $34.44.