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Alcatel will supply gateways and its network management systems to China Telecom to expand the company's metro network in Xi'an in the Shaanxi Province. Alcatel did not disclose the amount, but noted it was "multimillion dollar."

Under the deal, Alcatel will deploy its Lambda Gate system in four key sites, interconnecting the network, it says. The interconnections will use a fully meshed network based on 10 Gbps interfaces directly integrated into the system. The product extends the system by more than 5 terabits per second, Alcatel says.

Lambda Gate is part of Alcatel's Core Node, and is a multiband switch supporting "any customized configuration for sub-wavelength aggregation and optical layer restoration," Alcatel says.

The company also will supply an integrated network management system.

Separately, Standard & Poor's cut Alcatel's ratings on its long-term debt, from A to BBB+, with a negative outlook. S&P cited the industry's extreme adverse structural changes.

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