Alcatel Snags $6 Billion Verizon Pact

The three-year deal calls for upgrades to Verizon Wireless' network.
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Verizon Wireless, seeking to continue its network expansion effort, signed a $6 billion supply contract with Alcatel-Lucent (ALU) .

The three-year deal, announced Monday at the opening of the CTIA Wireless conference in Orlando, Fla., calls for Alcatel-Lucent to provide so-called EV-DO Rev. A upgrades to the Verizon Wireless U.S. network.

Verizon Wireless, a joint venture between

Verizon

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and

Vodafone

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, says it is adding the new gear, including advanced switching and transport equipment, to help provide services like voice over Internet protocol, mobile video and possibly two-way instant communications called push-to-x.

Verizon Wireless says the move will help transform its network to Internet protocol.

"We will deliver value over fully interoperable IP-services that enhance the lifestyles of our customers -- by offering multimedia services that combine voice, data, and video capabilities," said Verizon Wireless technology chief Dick Lynch in a press release Monday.

On Alcatel's part, the deal helps justify the French telecom giant's merger with Lucent last year, and promises to help revive the company's U.S. business.

The big upgrade plan is also good news for

Qualcomm

(QCOM) - Get Report

, which holds the patents for the EV-DO network technology. Qualcomm will also collect royalties from the phones and other devices sold to work with the new wireless standard.

Alcatel-Lucent shares rose 60 cents to $12.13 in premarket trading Monday.