Nortel Networks (TSE:NT)said Tuesday it has landed a $250 million US contract to supply communications equipment to Spain's Telefnica Mviles SA.

Nortel will supply radio access equipment to help Telefonica build out of its next-generation mobile telecommunications networks in Spain and Germany.

Nortel said the three-year deal is subject to definitive agreements. Nortel also expects to provide approximately $230 million US in vendor financing to Telefonica.

"The continued success of Nortel Networks in securing these vital . . . awards follows the recent $500 million US award from Cingular Wireless and further demonstrates our leadership position in supplying next generation wireless networks," Pascal Debon, president of Nortel's wireless networks division, said in a release.