Electricity lines company Counties Power is looking to offload its telecommunications division Wired Country.
Company chairman Paul Muir said Wired Country was not considered part of the core business.
"We found that rather than relying on ISPs [internet service providers] to sell ... we really needed to get involved in
retail ourselves to push it along, to get the numbers of connections we required," he said.
"Being an electricity lines company, retailing is not something we're involved in so that decision [to sell] was made after a strategic review to see what offers we could get for the business, and we're well on the way through that."
Muir said there was a preferred bidder and he was "happy with the price" but could not confirm details.
CallPlus, the country's third-ranked internet and calling operator and owner of Slingshot, would make a likely suitor.
CallPlus chief executive Martin Wylie would not say whether the company was the preferred bidder but confirmed he wanted to strengthen its position by organic growth or acquisition.
Wylie said size mattered in a telco sector where many small operators struggled.
"But customers will progressively be migrating away from dial-up so there's an opportunity to acquire those customers."
Wired Country provides broadband services in the Franklin, Papakura, Rodney, Auckland and Hamilton regions.
