Broadcaster BSkyB and mobile phone retailer Carphone Warehouse are the final two companies remaining in the bid for ISP AOL.

AOL stated in August that it would sell its businesses in the UK, Germany and France by the autumn. Mobile phone operator Orange, which was also in the running for the ISP, has reportedly to have dropped out in the past few days.

At the same time, BT is believed to be looking at acquiring Italian Internet group Tiscali. Despite poor results, Tiscali acquired video-on-demand service HomeChoice last month for £60millon, in order to offer triple-play TV, broadband and fixed-line phone by the end of the year.