Italian broadband company Fastweb and the Italian unit of mobile phone giant Vodafone are set to announce a commercial agreement, sources familiar with the deal, quoted by a Reuters report, said.
The report said Vodafone's clients would be able to use some broadband services supplied by Fastweb, according to the sources.
They did not provide details on the value of the deal, however, the report said.
The deal would not involve Vodafone buying broadband capacity wholesale, but it was a step for both companies toward offering both mobile and fixed line services, the sources said, according to the report.
The report said spokeswomen for both companies declined to comment.
The chief executives of the two companies are due to hold a news conference in Milan later on Friday.
Milan-based Fastweb, Italy's second-largest telco, has a network that covers most of Italy.
Fastweb had been able to take lucrative contracts from rival Telecom Italia, including two public administration deals worth more than 300 million euros a year and one to supply Internet services to Italy's largest bank, Unicredito, for three years, the report said.