ISP Dodo played a role in causing the outage that affected millions of fixed-line and mobile internet connections across the country this afternoon, Dodo's chief has confirmed.

"To be perfectly frank the extent of what happened was more than anybody could've thought," Dodo managing director Larry Kestelman told this website in an interview, adding his team was still investigating exactly what caused the issue.

"What it looks like has happened ... is a very minor hardware failure on one of the routers that has caused some big issues between ourselves and Telstra and had a flow on effect to others which it absolutely shouldn't have," he said.

"Telstra is saying that there were some overseas routing issues as well - but to me it sounds like it was a combination of things that caused it."

Know more? bgrubb@smh.com.au

Speculation the outage was caused by Dodo first appeared on the Australian Network Operators Group electronic mailing list - a list many Australian network administrators subscribe to - and spread to broadband forum Whirlpool shortly after.

"Rayle", a user of the Whirlpool broadband forum, quipped that Dodo's marketing slogan "Dodo, Dodo, internet that flies!" should instead be "Dodo, Dodo, internet that dies!"

The outage began about 1.40pm AEDT, lasted about 45 minutes, and affected customers nationwide after Telstra lost connectivity to its international data network, a Telstra spokeswoman said in an email. "Customers who couldn't access international sites were then overloading domestic sites causing major issues in accessing Australian sites as well."

The spokeswoman said the "vast majority" of customers had been progressively coming back online since 2.25pm AEDT this afternoon. "Telstra's engineers are continuing to monitor the network and identify the cause."

The telco was experiencing "a high volume of calls" to its customer service centres, which meant some customers may have difficulties getting through, the spokeswoman added.