Motorola Communications Israel is back in the race to upgrade the cellular network of Pele-Phone Communications to 2.5G, TheMarker.com has learned.

Pele-Phone declined to comment.

In any case Pele-Phone will be buying equipment for its new network, which it calls 1X, from two suppliers, one of which could be Motorola Israel, a member of the Motorola (NYSE:MOT) group. The network is supposed to be up and running in mid-2002.

Other contenders are Nortel (NYSE:NT) and Lucent Technologies (NYSE:LU), after Samsung fell out of the race.

The cost of the project is estimated at $150 million.

Last week Pele-Phone announced that Lucent and Nortel are to enter the final stage. It may have been trying to get Motorola to lower its prices.

Motorola built Pele-Phone's code-division multiple access network in the first place. That gives it an advantage over the other contenders, as upgrading CDMA technology would simply be costlier.

Motorola Israel general manager Elisha Yanay restricted his comments to telling TheMarker.com, "The Motorola option is available to Pele-Phone."

Pele-Phone will apparently be announcing the winner in mid-November.

"In any case, a single provider will be chosen to upgrade the network," Pele-Phone chief executive Jacob Gelbard told TheMarker.com last week. "At this stage Motorola's and Samsung's proposals have been rejected, but we reserve the right to resume contacts later."