Two separate cable faults have paralysed Telecom's broadband internet and mobile networks in the North Island, overloading landlines for much of the country.
The outage, which occurred at 10.48am, also crashed the New Zealand Stock Exchange - the sixth time that technical problems have caused the closure of the stock market in the past nine months.
Telecom spokeswoman Sarah Berry said one fault, in the Rimutaka area, actually happened yesterday and technicians were in the process of repairing it when the other one occurred.
It was not yet known how many customers were affected or the extent of the area with no coverage.
Technicians were still working to trace the exact site of the second "break" in the fibre optic cable, she said.
Telecom's own call centres were being overwhelmed by calls.
"We just ask people to be patient -- we are working to fix it as soon as possible."
A spokeswoman for the stock exchange told NZPA the market had closed at 11.01am, as it became aware of a breakdown between Auckland and Wellington.
There was no indication when the problem would be repaired, she said.