Alcatel-Lucent may dispose of the part of the company that sells phones and telecom gear to corporate clients, three people familiar with the matter said, though it was not clear if Alcatel had mandated advisers.
The business could command a similar valuation to peers such as listed rival Mitel Networks Corp, one of the people said, and could interest buyers including Hewlett-Packard.
A wider group of suitors would be interested only in Genesys, Alcatel's enterprise-software company, this person added.
Mitel, which has a market value of about $250 million, or about $530 million including debt, trades at about 0.8 times its sales for the last 12 months, Starmine data shows.
Alcatel declined to comment.
The Wall Street Journal reported on its website on Thursday that Alcatel had hired advisers to help it explore options that also included a stock market listing of the business, which has annual sales of around $1.5 billion.
Alcatel has started contacting possible buyers for the unit which could include Microsoft, Hewlett-Packard and Ericsson, the newspaper said.
The newspaper quoted one source as saying the unit was worth well over $1 billion and possibly more than $2 billion.
Shares in Alcatel were up 2.3 percent at 4.141 euros by 1524 GMT, the top gainers on a 0.9 percent softer French CAC-40 index , and they have gained almost 90 percent so far this year.