Two unidentified people came forward Friday telling Business Week that Telefonica, a global telecommunications company, is poised to award Alcatel-Lucent (News - Alert) an order to build a nationwide high-speed wireless network as it seeks to win back customers of data-hungry devices lost to rival operators.

The two people with knowledge on the matter chose not to be identified because the deliberations are confidential.

A spokesperson for Telefonica (News - Alert) and Paris-based Alcatel-Lucent, both refused to comment on the matter.

According to Business Week, Alcatel-Lucent, France’s biggest phone-equipment maker, is the top choice for Telefonica to supply gear for the network based on their long-term evolution (LTE (News - Alert)) technology.

Alcatel-Lucent and Telefonica first partnered in September to deploy LTE technology to facilitate the launching of Spain’s first 4G wireless network, as reported by TMCnet.

At the end of September, Telefonica had 24.1 million wireless customers in Spain, a market with a wireless penetration rate of 129 percent, according to the company.

“This project represents an important step forward in Telefonica’s plans to help lead the transition to 4G in Europe, and offer an unmatched mobile broadband experience to the people of Spain,” said Stephen Carter (News - Alert), President, Europe, Middle East and Africa for Alcatel-Lucent, in the September release. “It also opens a new chapter in our relationship with Telefonica, as we join them as a partner on their journey to the next generation of wireless communications.”

Since the partnership, Alcatel-Lucent jumped to 4.8 percent; the highest price in over three months.

Robin Bienenstock, an analyst at Stanford C Bernstein in London, told Business Week that Telefonica may need to spend nearly 300 million euros to build the LTE network to cover about 65 percent of the Spanish market, based on the amount Vodafone (News - Alert) Group Pic invested in Germany.

“LTE will be important, especially in rural areas” where download speeds may be limited to about 2 megabits per second,” Bienenstock said. “In the absence of significant cable coverage, Telefonica’s wireline customers are threatened by faster speeds available through LTE, hence the company has to build LTE to prevent further revenue declines in these areas.”

Telefonica has a presence in Europe, Latin America and China. The company operates in 25 countries, and since the September partnership has a total of 299.7 million customers.