A farmer in the lower South Island has dug through a fibre internet cable, cutting access for much of the region.
Spark spokeswoman Lucy Fullarton says around 1400 people in Dunedin, Queenstown, Invercargill, Timaru and Oamaru are affected, including nearly 100 schools.
The outage mostly affects customers on the new fibre network, however a "small number" on the old copper network are also without internet.
Ms Fullarton says technicians are on the site, near Rakaia, and Spark hopes to have all services restored later tonight.
Vodafone spokeswoman Jenny Keown says three of the companies' cellphone sites south of Christchurch are down as a result, but no fixed line services are affected.
Vetta Technologies in Timaru says it has been contacted by twenty different businesses struggling to continue operating without an internet connection.
Vetta spokesman Shaun Fisher says their network is not affected, so Vetta has been working to re-route businesses so they can continue operating.
He says it's inevitable many of these businesses will face financial repercussions.
Techs are headed to check/fix a fibre cut affecting some broadband users in the lower SI. Thanks for your reports, we'll update when we can.— Spark (@SparkNZ) October 31, 2014