Telecom is unable to provide internet broadband to some of its customers because the roadside boxes that contain broadband equipment are running at full capacity.
As a result, some Telecom customers have been told they will have to wait at least six months for a broadband connection.
Telecom said ithad 2984 cabinets, of which 42 boxes were running at full capacity.
"We have an ongoing investment programme which is continually increasing the capacity of cabinets. We work very hard to keep ahead of demand," said spokesman John Goulter.
"But, in recent months, there has been extraordinary demand for new connections and that, unfortunately, means we are at capacity in a small number of areas."
Despite forecasts, sometimes demand ran higher than anticipated. The company said 14 per cent of its customers were connected via cabinets instead of exchange buildings.
Cabinets are roadside boxes which contain equipment to serve the households in the area and were traditionally used for rural and remote areas but now also serve urban areas.
This follows reports this week that Telecom had told rivals it had power supply problems and little or no room for more equipment in its main exchanges.
Telecom is under pressure from the Government to open its network to competitors but, for this to take place, the other internet providers need to be able to install their own equipment in Telecom's exchanges.
Communications Minister David Cunliffe said: "I note that Telecom has made a statement clarifying its position. It is important that all players work to facilitate the new competitive environment."
A Beachlands resident was told that he would not be able to get broadband for six months or more because the equipment in the local cabinet was at full capacity.
A Telecom technician said that high broadband uptake areas in Auckland, including St Heliers and Remuera, had significant waiting lists because the equipment was full.
A Telecom customer living near New Plymouth could not access broadband or phone services because his local cabinet too was full.
"Telecom has told me that the cabinet will be replaced in 2010 but that is too long for me to wait."
