Telecom subsidiary Gen-I has fronted up to business clients in an online discussion this afternoon.

Chief executive Chris Quin addressed about 200 customers online who asked about reliability and when the XT network would be fully functional again.

Thousands of Telecom's XT mobile customers remain without services today as technicians work to fix the network.

Tens of thousands of mobile customers south of Taupo have lost their connections for varying lengths of time over the past two days, after the network crashed about 11am Wednesday.

Tim Bark, who owns a tourism rafting company, told Mr Quin that his company had signed up to the XT network to provide his company with an emergency phone.

Mr Quin said Gen-I would have to "front-up on reliability".

He said no mobile network will ever be 100 per cent reliable.

"There is always going to be limitations in all phone networks on any provider," Mr Quin said.

He said the company has been handing out phones compatible with their lower speed phones which run on a separate network.

Mr Quin said the problem with the XT network has been in the hardware which links southern cell phone sites to the XT platform. He said of the 453 towers in the Southern region, just over 30 were still down.

He said two executives from Alcatel Lucent, the company partnered with Telecom to deliver the XT, have flown into the country to help Telecom with the problem.

Mr Quin was asked if Telecom would be seeking compensation from Alcatel Lucent. He said that would not help Telecom customers.

He was also asked if the company had made a decision on compensation for customers. Mr Quin said there was no question that there would be compensation and the company was "closely looking at the issue".

Mr Quin said he had received between 400 and 500 emails from Telecom customers and some had been "emotional". He said the emails will make up part of the independent report to be announced by Telecom. Mr Quin said Telecom were in talks with a "global player" about conducting the enquiry but would not name them publicly until a contract was signed.

Telecom chief executive Paul Reynolds said the problem had affected about 4 per cent of the network south of Taupo, he Radio New Zealand this morning.

"We've improved overnight. It's now about 3 per cent and it's fundamentally about Dunedin and the south," Mr Reynolds said.

"We've been working through the night over the past while, in fact progressively narrowing down the boxes in the network that are affected and rerouting things around them, bringing our customers back into service."

It was a problem with the hardware causing the faults, which technicians had to work around by rerouting customers, then removing the boxes to fix it, he said.

Meanwhile Vodafone spokesman Paul Brislen said the numbers of people looking to switch to his employer's network had increased.

Mr Brislen said he would not say how many because the company does not release customer numbers for competition reasons.

He said numbers of people making enquiries about commercial contracts in the South Island had been particularly high.

Telecom spokesman Mark Watts said he did not know of customers leaving Telecom.

"Our focus is on talking with our customers and getting them restored. I have no idea of the veracity of their claims," Mr Watts said.

Regarding possible compensation, Mr Watts said a meeting was taking place this afternoon and no decision had yet been made.