Colombia Movil, the mobile division of one of Colombia's biggest state-owned phone companies, has accepted bids from Digicel and Luxembourg's Millicom International. According to documents filed with the Colombian stock exchange, a controlling stake will be auctioned on 31 August.

Digicel was one of three international groups knocked back by Colombia Movil, reported to be worth over 600m, in May. Colombia Movil is jointly owned by Empresa de Telecomunicaciones de Bogota, the main telephone firm in the Colombian capital, and Empresas Publicas de Medellin, a stateowned utility.

News of the progress of the Colombian bid will be welcome at Digicel after a week in which the group suffered a setback in its efforts to establish a foothold in the South Pacific.

Digicel's Fijian partner, Ba Holdings, is in turmoil after the dismissal of its CEO and up to 150 staff over alleged accounting irregularities.

Earlier this month Digicel raised 117m in a bond issue to fund the expansion of its business in the Caribbean. It has operations in 20 Caribbean countries including Jamaica, Trinidad & Tobago and Haiti.