Telstra BigPond's Stuart Gray, said traffic is being redirected and the network is working at 75 per cent capacity.
"We are currently looking for extra capacity until the cable is fixed and are doing this through unused capacity and other avenues. During peak periods, especially at 4pm when the school kids log on, we expect people logging onto international sites to have intermittent problems."
The SEA-ME-WE3 cable which links Australia, Asia and Europe was damaged at about 3.20 pm EST on Tuesday about 70 km off Singapore, resulting in access disruptions for millions of Internet users in the three continents.
Gray confirmed that the explosion at the Sydney Paddington Electricity Substation late Tuesday afternoon which blackened out Sydney's eastern suburbs, did not further impact on network problems as generators kicked in.
Telstra is Australia's biggest Internet service provider with more than 650,000 customers and relies on the cable for 50 to 60 per cent of its international traffic. Hundreds of other Australian Internet service providers (ISPs) also use it.
Gray said the cable will take "a matter of days" to repair and that basically it was just a high-tech "welding job".
He said Telstra did not know what had caused the problem with the cable as it is in Singapore jurisdiction, but "we believe a ship is on its way to the site of the problem".
"We don't know what is wrong with the cable or how deep the water is there. There has been no signs of an earthquake. So it could have been a fishing trawler or rock movement, we don't know."
Gray said Telstra had held no talks with Cable & Wireless Optus to utilise capacity from the Southern Cross Cable network, which it has a 40 per cent stake in, as far as he knew.
The 39,000 km SEA-ME-WE3 began operations last year and is the world's longest telecommunication system. Until last week it was Australia's biggest connection to the Internet, a position now held by the Southern Cross Cable network, running from the east coast of Australia to the US.