Alcatel plans to buy Canadian firm Nortel's 3G mobile phone business and related assets for $320 million (410 million euros), an AFP report said.
The report said the deal would make Alcatel one of the world's largest suppliers of UMTS radio access solutions, adding 14 extra customers, and supplying a quarter of the operators of the technology.
Under the terms of the draft deal, "a significant majority" of employees of Nortel's UMTS business would be transferred to Alcatel, Alcatel said in a statement, adding that the deal would significantly reinforce its presence in South Korea, Italy, Spain, France and Britain.
It said it had signed a non-binding memorandum of understanding with Nortel but planned to close the deal by the end of the year, according to the AFP report.