By midafternoon, shares had gained 4.2% to $3.85.
Paris-based Alcatel signed a one-year frame agreement valued at up to 750 million euros with China Mobile, the world's largest mobile operator with more than 750 million subscribers.
In a statement, the companies said the agreement would involve providing "technology that will move the world's largest mobile service provider to an all-IP ultra-broadband network paving the way for future network functions virtualization (NFV) and cloud-based services."
Alcatel-Lucent will provide technology ranging from wireless ultra-broadband access support and IP networking infrastructure.
"This is a significant achievement of Alcatel-Lucent and essentially makes us a key technology provider in virtually every aspect of China Mobile's growing mobile ultra-broadband network," said CEO Michel Combes in a statement.
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TheStreet Ratings team rates ALCATEL-LUCENT as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALCATEL-LUCENT (ALU) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally higher debt management risk."