Over 45,000 homeowners will be looking for a new telephone provider over the next couple of weeks and they are not short of offers. Rival operators have been quick to circle their potential prey.

Imagine had a press release out within hours of the announcement that Smart customers have been cut off by Eircom and Magnet Telecom was running half page advertisements in national newspapers the following morning.

Danny McLaughlin, chief executive of BT Ireland, said the rush to "dance on [Smart's] grave" was unseemly and that his company would not be running "negative advertising" urging Smart customers to jump ship to BT.

"That's not what I would call at all acceptable behaviour, " he said.

Smart's woes were a "rude awakening for the industry", according to McLaughlin. He agreed that BT would be likely to pick up a signi"cant proportion of the former Smart customers but said he took no pleasure from the company's troubles. "I think it's a bad thing for the industry because it dilutes customer choice, " he said.

Even though his company hopes to be one of the biggest bene"ciaries of last week's events, Imagine managing director Brian O'Donoghue said he was angry at how the situation had arisen. Smart bears responsibility for its own "nancial dif"culties, he said, but does not shoulder the blame alone.

"I would be the last person to defend Smart Telecom in terms of the money they've spent and in terms of the strategy they've pursued. I think they're "awed but their biggest mistake was that they believed the regulator and they invested in the local loop unbundling process, " he said.

O'Donoghue was critical of the communications regulator and minister Noel Dempsey for failing to intervene to speed up the unbundling process, which enables alternative operators to access local exchanges and supply internet and telephone service without relying on Eircom.

"It sickens me. There's so much more that the likes of ourselves could be doing in this market if there was a proper regulatory framework, " he said. "There's a huge amount of inward investment waiting. Until they get their "nger out that's not going to happen".

Paul Connell, managing director of Pure Telecom, says the collapse of Smart's residential business makes it dif"cult for smaller telcos to convince prospective customers that they will not run into the same problems as Smart. "Even on Monday as Smart went out of action we had quite a few customers ringing in and saying how does this affect you?".

Connell was critical of Smart for what he said amounted to "below cost selling" and said he could understand why customers would be wary of providers promising them free calls, free line rental, free broadband and other inducements to switch provider. "There's an awful lot of guys in Irish telecoms that shout loud but will they still be around in two years' time?"