Acting chief executive Ciaran Casey, who assumed the role after the resignation of Smart founder Oisin Fanning on health grounds last week, questioned the company's need to spend money on "blanket national advertising" when its broadband internet service is available to only 600,000 people.

The company has had difficulty gaining access to telephone exchanges controlled by Eircom, a process known as local loop unbundling, and has not met its subscriber targets.

Smart has 16,500 broadband customers but has previously said it needs to sign up at least 50,000 to break even based on its current cost structure.

The AIM-listed company is sticking by guidance that it will break even on an operating basis by the second half of 2007. At its annual general meeting on Friday, the company announced that a major strategic review is under way to cut costs and determine its funding requirements.

Smart finance director Brian Timmons told shareholders the company is losing between 2.5m and 3m each month. The 55m the company raised in September last year has been spent and its ongoing working capital requirements are being met by "key shareholders" including Kingspan founder Eugene Murtagh. The company had a pre-tax loss of 23m last year on turnover of 46m.

Smart Telecom plans to save money by cutting back its marketing budget, among other things. The company sponsors weather coverage on TV3, TG4, 13 local and national radio stations and has a range of sporting sponsorships including a shirt deal with St Patrick's Athletic.

"Obviously we'll honour any contracts that we have but everything is under review, " Casey said.

He also indicated that the company is likely to stop expanding the reach of its broadband internet service.

Smart operates out of 34 telephone exchanges but had planned to install equipment in another 30 around the country by the end of this year at a cost of around 3m.