Two months into the bright new era of deregulation and many telephone customers, faced with a choice of service provider for the first time, are confused.

The ending of Telecom Eireann's monopoly on the provision of telephone services to the residential market last December means customers now have the option of jumping ship to Esat Clear or Ocean if they are not happy with their existing service.

However, making this decision is more difficult than it may seem at first, partly because of the complex nature of telecom charges and also because of the welter of conflicting information coming from the rival operators.

The Consumers' Association of Ireland's (CAI) advice to all those thinking of changing is quite simply - Caveat Emptor or Buyer Beware.

"People would really, really want to look at this in a big way before making any decision," says Mr Jim O'Flynn, of the CAI's telecoms committee.

Customers who are considering whether or not to switch over to one of the two new service providers need to consider a number of factors including the size of their existing telephone bill, the nature of their calls and issues like convenience.

For starters, if you spend less than £100 on your bi-monthly telephone bill - or £30 a month on calls - it may not be worth your while changing at present. The two new arrivals are not really targeting the lower end of the market because of the way the telecommunications industry is currently structured.

Telecom Eireann retains control of the telephone lines going into most homes throughout the State. As a result, both Esat and Ocean pay Telecom an interconnect charge for the use of those lines and are going after the big-volume customers that are sure to make the service pay.

However, Telecom's interconnect charge has fallen sharply in recent months and should drop further. As the price comes down, so should the costs faced by Telecom's rivals, allowing them to broaden their focus and go after the smaller user.

Depending on whom you ask, between 250,000 and 450,000 customers fall into the £100-plus category at present, or between 25 and 35 per cent of the total number of residential customers.

If you are a member of this chattering class, it may be worth looking at the packages on offer from Esat Clear, the services being provided by Mr Denis O'Brien's Esat Telecom or Ocean, a joint venture between the ESB and British Telecom.

The emerging consensus is that if you make a lot of international and trunk or national calls, it may be worthwhile changing but users who make mostly local calls are probably better off staying with Telecom for the moment.

"A telephone user with more than 50 per cent of their bill made up of local calls would probably not make savings moving from Telecom at this time," says the CAI's Mr Flynn.

However, users should carefully examine their phone bills - where they call, when and for how long - as it all depends on the mix of calls.

Esat Clear is selling its new service using the slogans "you only pay for what you say" and "the more you say the less you pay". These are a reference to its Talkalot discounts and policy of per-second billing which differ from Telecom's practice of charging per unit.

However, it should be noted that Esat's per-second billing is subject to a minimum call charge of 5p.

Those spending more than £35 per month with Esat qualify for an automatic 7.25 per cent discount on their total phone bill while those spending more than £45 get a 12.5 per cent discount.

The other innovation in the Esat Clear package is the decision to charge all national calls at the local rate. Hence, a user in Dublin is charged the same rate whether they are calling Killiney, Kildare or Kerry.

What each customer has to weigh up is the volume, time and length of calls to these places as the cost of calling Killiney is likely to be higher than with Telecom although ringing Kildare and Kerry will probably be cheaper.

Ocean's package is also targeted at the big private user, although unlike Esat it has not pinpointed a threshold. It is also going after small businesses in particular, including those who work from home. It too offers a discount scheme which offers customers a saving of up to 15 per cent on their three most frequently called numbers.

But Telecom Eireann is not prepared to cede its market share without a fight.

The State-owned operator, which is expected to float up to 35 per cent of the company on the stock exchange later this year, has slashed call charges in recent years as it became clear that it would soon face competition.

It has also introduced discount packages like the Circle of Friends scheme, for which 130,000 customers have signed up. This delivers discounts of 10 per cent on calls to the five most frequently used numbers. The Talk Saver scheme also qualifies customers who spend more than £25 a month to a 25 per cent discount on international and a 15 per cent discount on local or national calls, but this discount must be applied for. The company says it plans further price cuts while the accusation that a huge chunk of Telecom's bills are charges for unused time may soon be without foundation as Telecom plans to move to per-second billing from April.

Aside from cost, convenience is another factor some customers may wish to consider before deciding whether or not to switch. There have been some fears among telephone users that changing will involve having their driveways dug up.

Esat and Ocean say that to switch to their services is very simple although it does involve attaching a small box, the size of a cigarette packet, to your telephone to route your calls to your chosen service provider.

Esat provides this free although Ocean charges £20 which is refunded if the customer spends £150 over a six-month period.

More of a nuisance is the fact that as long as Telecom owns the line into your home, Esat or Ocean customers will get two bills - involving two cheques or two direct debits - rather than one. As well as being billed by their service provider for the cost of their calls, customers will continue to have to pay Telecom Eireann for the line rental.