ITALIAN information and technology group Olivetti and France Telecom reached a draft agreement to buy a 70 per cent stake in the Italian state railway's (FS) big domestic phone network, FS said yesterday.

Final talks on the deal would start within days, FS said in a statement.

An industry source who declined to be named said the move was a clear bid by the group, which has carved out a niche in the cell phone market, to launch into fixed line telephony.