Marconi has secured a deal estimated to be worth at least £200 million sterling (€320 million) to supply Ericsson with technology for use in high-speed telecom networks.
The Swedish firm will resell the equipment to its customers after cutting back production of its own Dense Wavelength Division Multiplexing (DWDM) technology to save cash.
The seven-year deal builds on an existing contract signed in 1995, and Marconi will continue to supply Ericsson with SDH technology used to carry digital data over fibre-optic networks.
Mr Mike Parton, Marconi's chief executive, says: "Today, success in the global telecommunications industry is characterised by strong existing customer relationships and best in class technology.
"Marconi has best in class DWDM technology and Ericsson, like Marconi, has solid customer relationships with the world's leading operators."
DWDM technology, which allows high-speed data to be transmitted along fibre-optic cables, is likely to be used in the roll-out of third generation mobile phone networks.
Marconi has refused to comment on the value of the deal. Last month Marconi reported a record-breaking loss of £5.6 billion for the year to March 31st after being sent reeling by the telecoms slowdown.
It is currently thrashing out a refinancing package with its bankers and bondholders.
PA