iiNet customers experienced both slow and inaccessible services due to issues with an internet gateway router throughout the day on Wednesday.
iiNet advised its customers they would suffer slow speeds accessing internet services, while its Netphone (voice over IP) customers might not able to place or receive calls at all.
It blamed the issue on one of the internet gateway routers at its subsidiary internet service provider Westnet not passing traffic. iiNet bought Westnet in 2008 for $81 million.
It is yet to identify the exact cause of the problem but it is investigating, an iiNet spokesperon said.
"[The issue] is specific to customers on Telstra infrastructure, though this may be a symptom rather than a cause."
The stuttered service has been affecting customers since 9am this morning.
iiNet said the issue was only affecting Queensland users, despite a support email sent to customers advising users across Australia are affected.
Update 7:30pm: An iiNet spokesperson said the email had been sent in error to subscribers of iiNet's notification system. It said only Queensland customers were affected by the Westnet problem and there were no major outages or issues in any other states.