Evans would not confirm or deny whether any specific negotions were under way.

Last week Vodafone and supermarket chain ASDA were reported to be close to announcing an ASDA-branded mobile service to take on rival Tesco.

Ireland will almost certainly see several companies attempt to follow the lead of Tesco and O 2this year. Ultimately MVNOs could make up 15% of the market, according to Oisin Byrne of analyst firm iReach. "We think there is room for four or five MVNOs in this market, " he said.

MVNOs could target niche offerings based on cut-rate pricing on text messages or even revenue-sharing arrangements with small business customers.

UPC, the company that owns NTL and Chorus, told the Tribune last month that it intends to enter the mobile market here, mirroring the move it made in the Netherlands.

Perlico, the privately-held telecoms firm that recently raised 20m from a group of investors led by Dr Michael Smurfit that valued the company at 55m, announced last month that it, too, would seek to enter the mobile market as an MVNO.

Eircom, which owns third operator Meteor, is expected to roll out 3G services after the collapse of Smart Telecom.

Other potential entrants via an MVNO include BT, Carphone Warehouse, Clever Communications, Dome Telecom and Minutebuyer. BT has a long-established MVNO in the UK using Vodafone's network. Industry sources speculated it could easily replicate that deal in Ireland.

T-Mobile, which currently has no presence here, has also expressed an interest in entering the Irish market via an MVNO deal with an existing operator. "This is something to watch out for in 2007, " Carrie Pawsey of research firm Ovum wrote in an analysts' note following Tesco's announcement.

Its most likely partner would be the Hutchisonbacked 3 network. T-Mobile and 3 are rumoured to be in negotiations in the UK.

New entrants in Ireland face significant obstacles, however, not least the long shadow cast over investor and consumer confidence by the collapse of Smart Telecom last year.

"The lesson of broadband is that throwing a lot of money at marketing is not a guarantee of success, " said Byrne, without mentioning Smart by name.

Companies that had prepared MVNO proposals two years ago are now finding potential investors wary, said another industry source.

Investment in bits of network kit, plus paying to establish a brand, could run into the tens of millions.

There is also the question of whether customers, especially business customers, will risk a new entrant following the demise of Smart.