Alcatel says it has reached a preliminary agreement to buy the third generation mobile phone network equipment making unit of the Canadian firm Nortel. The price is 250 million euros. With this move, Alcatel will increase its presence in the British 3G network arena as well as South Korea, Italy, Spain and France and the emerging 3G market in China.

The deal is the latest example of the industry’s consolidation. It would make Alcatel the third largest 3G mobile phone infrastructure supplier with about 13% of the market, behind Ericsson and the newly merged Nokia-Siemens. This comes as the French communications network provider tries to gain investor support for its acquisition of US rival Lucent Technologies. Shareholders are due to vote on that deal on 7 September. Analysts warned that Alcatel faces a difficult time integrating the Nortel and Lucent businesses at the same time. Alcatel’s shares fell in value as did Nortel’s.

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