Mobile operator Orange has pulled out of the bidding for AOL’s UK internet access unit, according to a report in

The Times

.

The move will see BSkyB and Carphone Warehouse going head to head for the division, the newspaper said.

BSkyB, Carphone Warehouse and Orange were second-round bidders for the unit, Reuters reported last month.

AOL said in August it planned to sell its internet access businesses in the UK, Germany and France as part of a shift of focus from subscriptions to advertising.

Carphone Warehouse and BSkyB, both late movers in the broadband industry, hope to hoover up AOL’s 2.2 million customers and add scale to their internet businesses.

Both are offering bundles of services that include free DSL subscriptions.