AT&T in deals with Motorola, Alcatel-Lucent

AT&T Inc said it extended a network equipment supply agreement with Alcatel-Lucent and would soon start selling a cellphone from Motorola Inc .

AT&T, the second-biggest U.S. provider of mobile phone services, said on Tuesday it would start selling Motorola's Karma phone on June 28 for $79.99. The device, which has a miniature computer keyboard, is aimed at consumers looking to use their phones to send text messages or access social networks like Facebook.

The device is based on a proprietary operating system from Motorola, which is struggling to regain share in the cellphone market after years of criticism of its phone line-up.

AT&T also said it extended an agreement for Alcatel-Lucent to supply equipment used for AT&T's U-verse television and high-speed Internet service, which is being expanded around the country.

Motorola shares were up 18 cents or 3 percent, at $6.21 in morning trade on New York Stock Exchange, where AT&T was up 12 cents at $24.27. Alcatel-Lucent U.S. shares were down a penny at $2.46.

(Reporting by Sinead Carew; editing by John Wallace)