BSkyB and Carphone left to battle for AOL buy?

AOL has reportedly shortlisted the potential buyers for its UK unit - step up BSkyB and Carphone Warehouse.

Other rumoured bidders for AOL's two million customers included BT and Orange but according to a source, quoted by Reuters, only two ISPs remain.

Jonathon Miller, CEO of AOL, said yesterday the sale of AOL's European units remained on track, adding: "The sale process... is progressing, and we are hopeful that we will have reached agreements with the winning parties sometime in the fall."

An AOL spokesman declined to comment on the remaining bidders for the ISP's UK access business but did confirm the UK sale is not as advanced as that occurring in France, where the final bidder has already been announced. "We're not at that stage - negotiations are continuing. It's relatively early in the process," he added.

Both BSkyB and Carphone Warehouse have launched their own 'free' broadband products and could stand to benefit from the significant proportion of AOL's customers that remain on dial-up.

James Murdoch, head of BSKyB, revealed recently the precise rationale - and the price tag - behind such a buy still had to be worked out.

He said: "At some price, it could make good sense but we haven't had enough information to understand what it is... We're not interested in paying high prices," adding the company will be "opportunistic" with any future acquisitions.