Lucent ( LU) signed a supply agreement potentially worth up to nearly $800 million to help a unit of Spain's Telefonica ( TEF - Get Report) and its Finnish partner Sonera ( SNRA) build a wireless network in Germany.

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Lucent, a telecommunication equipment maker based in Murray Hill, N.J., said it will provide financing for the deal to supply third-generation wireless network equipment and services. Financing terms weren't disclosed.

The companies expect the supply agreement, which requires the execution of a definitive contract, to form the basis for an extended collaboration in other European markets, including Austria, Italy and Spain.

Shares of Lucent were recently up 7.8%, or $1.19, to $16.50 in New York Stock Exchange composite trading, while shares of Telefonica gained 5.2%, or $2.50, to $50.69 on the Big Board. Sonera was lately up 2.7%, or 50 cents, to $19.50 in trading on the Nasdaq.