The interruption affected millions across the country, with 3G and 4G customers unable to make and receive calls via their mobile phone or establish a data session from about 12.45pm AEDT.

Ballarat residents were hard hit, while several businesses suffered a loss of connection for their Eftpos machines over the course of the day.

"We apologise right across our customer base. This is an embarrassing human error," Telstra's chief operations officer Kate McKenzie said at a press conference.

The company is exploring options to compensate affected customers.

Telstra south west area general manager Bill Mundy said major mobile node fault was also a cause of the issue.

“The network is configured to manage this, however, in this instance we had issues transferring customers to other nodes which caused congestion on the network for some customers,” Mr Mundy said.

Telstra issued a statement at about 2.50pm that said the problem had been identified, with services to be restored progressively.

The Service Status page at Telstra's website showed red lights across the board in all major cities since 12.45pm AEDT, with most of Ballarat listed as under “current interruption” for much of the day, however, local areas had been removed from the list by 4.30pm.

There were also issues listed for ADSL lines in some regions.

Many contacted The Courier’s Facebook page citing service issues, however, some said they experienced no problems throughout the day.

At the height of the interruption 4,663 reports of Telstra problems were logged by aussieoutages.com.

The largest clusters of service faults were in Sydney, Brisbane and Melbourne. Perth, Adelaide and Hobart were also affected.