After a chaotic night, Telstra technicians have restored 90-percent of telecommunications between Gosford and the Queensland border after a backhoe accident cut the eastern seaboard's main fibre optic cable.

As reported earlier, Telstra had hoped to restore Internet, telephone and data services to thousands of people by nine o'clock last night, but "the damage was more extensive than we initially thought," a spokesperson told ZDNet.

The fibre optic cable, stretching the entire length of the eastern seaboard was sliced by a contractor yesterday morning, bringing communications north of Gosford to a halt.

Telstra crews had to replace 1.5 kilometres of cable and reconnect every individual fibre optic wire within it - about 150 strands in total.

The wrecked cable disconnected landlines and Internet and data services between Palm Beach (on Sydney's northern beaches) and Queensland. Mobile phone services in the area were congested.

Telstra said it was able to re-route some traffic to areas including Grafton, Coffs Harbour, Taree, Gosford, Maitland and parts of Newcastle late last night, restoring services to these areas.

The telco says it is impossible to tell how many customers were hit by the mishap.

"A full investigation is underway," a Telstra spokesperson said. "Any business or company seeking compensation can call our customer service centre on 13 22 00 and we'll send them out a compensation pack so they can assess their eligibility [to make a claim," he added.

"Once the investigation is complete it's likely we'll refer them to the actual group that did severe the cable."

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