According to Wall Street Journal sources, the Finnish company Nokia would like to pocket the French company as a means of strengthening its networks business, once it sells off its mobile phone business to Microsoft.
However the paper said that no formal discussions have so far taken place, nor would company representatives offer any comment on a possible purchase.
Alcatel is currently in a weak financial position as a result of stiff competition from Chinese competitors ZTE and Huawei.
However a combined force of Nokia and Alcatel would present a formidable challenge not only to the Chinese, but also to the Swedish company Ericsson.