The division is separate from its internet and business telecoms divisions.

Most of its residential customers are wholesale line rental subscribers, meaning Smart pays Eircom a wholesale price to access its network and then resells Eircom's product at a mark-up.

NCB has circulated a memorandum regarding its residential telecoms business to several interested parties.

Sources who had seen the document said Smart has 39,000 residential customers but has a churn rate, industry parlance for the percentage of customers that cancel their subscriptions over a given period of time, of 12% per year. One source said Smart would aim to secure a price of up to 100 per customer, which would value the business at 3.9m. That may be ambitious as cutprice telecoms operator Tele2 received just 56 per customer for its UK and Irish business when it sold out to Carphone Warehouse last year. Carphone Warehouse is also seen as one of the potential buyers for Smart's residential division.

The proposed sale of the business is part of an extensive restructuring plan which will see Smart lay off 248 staff.

Hugh Cooney of accounting firm BDO Simpson Xavier has been appointed to oversee that process. At Smart's annual general meeting three weeks ago the company said it was burning cash at a rate of between 2.5m and 3m per month. Smart has already spent the proceeds of a 55m fundraising last September and is relying on its largest individual shareholder, Kingspan cofounder Brendan Murtagh, to meet its ongoing working capital requirements.

To add to the company's woes founder and chief executive Oisin Fanning resigned from his position, citing health grounds.

The company is braced for further bad news when High Court judge Peter Kelly delivers his judgement in Smart's case against the Commission for Communications Regulation (Comreg). Smart sued the regulator after Comreg withdrew a mobile licence which it had awarded to the company because Smart missed a deadline to provide a 100m performance bond. Judgement in the case is expected soon. It is considered unlikely by many within the Irish telecoms industry, even within Smart itself, that it will prevail in its bid to force Comreg to reissue the licence.

Acting Smart chief executive Ciaran Casey, previously the company's chief operating officer, announced on Friday that the company had concluded the strategic review of its business.

Smart also announced a loss of 17.9m over the first six months of this year on turnover of 20.3m.