When it launched a broadband internet service in February 2005 founder and former chief executive Oisin Fanning said the company would need 50,000 subscribers on the books to break even. At the time of its fateful AGM last month, at which it announced Fanning's departure, it had just 16,500.

Smart has always argued, and continues to argue, that the reason for its failure to ring up the necessary numbers is Eircom's intransigence on the issue of local loop unbundling. It's an argument which, to be fair, has the support of other LLU players such as BT and Magnet. Like Smart they have been frustrated by what they see as unreasonable delay by Eircom in providing access to the loop and transferring customers to the other providers when they sign up for telephone and internet services.

Unlike Smart, however, neither Magnet nor BT have put all their eggs in the LLU basket. They continue to sell Eircom's broadband internet product. They buy at a wholesale price and add a small retail mark-up. Margins are slim but the understanding is that when LLU becomes a realistic proposition they can begin moving customers to their own service and watch their revenues soar accordingly.

Smart decided not to wait for the kinks in the process to be ironed out. Smart gambled. Fanning and his management team backed the quality of Smart's broadband product against the competition. They figured Irish customers would endure the pain of the unbundling process if the price was right and the service was good enough.

Customers would have to switch telephone numbers if they moved to Smart. It would take six to eight weeks for their telephone lines to be transferred across to the new provider and they would be without any internet or telephone service for up to two weeks of that period while Eircom unbundled the line and Smart transferred them across. The end result, though, would be an internet service that was three times faster, and significantly cheaper, than anything else available on the market at the time plus free telephone line rental for life.

Fanning hoped Smart's aggressive pricing and promises of the fastest internet service in the country would encourage Irish people to have an "epiphany" and sign up in droves. "Our philosophy simply is that broadband has to be available to Joe Soap, " he said in an interview with the Sunday Tribune at the time. Magician Keith Barry, son of Smart non-executive director Kenneth Barry, was rolled out to front a 4m national advertising campaign.

The risks inherent in Smart's gamble were apparent even at that stage. At 35 per month, less the 14.65 line rental charge to Eircom that Smart was swallowing, its gross margin on broadband was 20.35 before equipment, maintenance and administration costs. Factor in the 58 charge of switching each unbundled customer and Smart's hefty sales and marketing expenditure and, by Fanning's own admission, it would take up to eight months for the company to make money from any broadband customer it signed up.

The tagline "it's not magic, it's just Smart" was soon screaming from billboards, television sets and radios across the nation. True to Fanning's promise, Joe Soap sat up and took notice. On the day Smart Broadband was launched 8,000 people logged on to the company's website (presumably using their dial-up connections) to check out the new offer. The company was fielding 1,500 enquiries a day and signing direct debits for the service at a rate of knots.

By August 2005, however, Smart had signed up just 2,900 paying customers. The unbundling process was torturously slow. Many of the customers intrigued by the 4m advertising campaign rang the company only to find the broadband service was not available in their area.

Others were told it was available but were not willing to go through the torturous unbundling process, including losing their home telephone numbers, to get it.

Smart was undaunted. Fanning told the Sunday Tribune it had 43,000 customers waiting in the wings that had "signed up" for broadband and would switch to Smart from Eircom once the LLU issues could be sorted out.

In the meantime the company was employing a "feet on the street" team to go door-to-door, convincing the 43,000 that the pain would be worth it. In the meantime Smart took a High Court action (which was subsequently dropped) against Eircom claiming 47m in lost earnings because of what it said was deliberate obstruction of Smart's business.

By September Smart was going to market to raise 44m, on top of the 20m it had already burned through, to see its way to profitability.

Still, though, the core problem remained. Not enough customers, nowhere near enough money coming in and way too much going out.

Smart had a pre-tax loss of just over 23m in 2005 as the expense of the broadband venture bit the bottom line, more than double the 10.7m it dropped the previous year Then came the abortive mobile licence venture.

Smart applied for, and won, a licence to provide mobile telephone and internet services over a high-speed 3G (third generation) mobile network.

Then it failed to provide the necessary performance bond to communications regulator Comreg and the licence was withdrawn, teeing up a costly High Court case.

Smart spent 4.4m in applying for the licence and has budgeted for another 3.3m to fight its corner this year, even as it continued to haemorrhage cash at an operating level.

In September this year Smart publicly acknowledged what most of its rivals had been openly saying since February 2005: the business model was unsustainable.

Fanning left on health grounds and acting chief executive Ciaran Casey took over to lead a "strategic review" of the business in conjunction with NCB Corporate Finance. Non-core operations . . . a payphone business, a call card operation and Smart's residential telephone business . . . would be sold. Up to 250 sales and administration staff were to be laid off and Smart would concentrate on broadband, in which the company still passionately believes despite the millions lost to date.

The dream of providing a high-speed internet product unbundled from Eircom's exchange has taken Smart too close to the sun. Ironically it is 4m in unpaid rental charges due to the former Telecom Eireann which has threatened to melt the company's wings and send it plummeting to earth.

Oisin Fanning: hoped Smart's aggressive pricing and promises of the fastest internet service in the country would encourage Irish people to have an "epiphany" and sign up in droves