Bell Aliant said Tuesday it had narrowed down the area of a breakdown in its fibre op line near Labrador City.
But the company said technicians were unable to find any physical damage to the line.
The trouble area, about 80 kilometres east of Labrador City, resulted in a loss of internet service in the Upper Lake Melville area and on the north coast of Labrador.
A Bell Aliant spokesperson said workers were able to reroute some internet traffic over its radio network to the east, but noted internet and some cellphone customers would "continue to experience degradation in service quality while we work on the repair."
The company said further testing would be carried out Wednesday as technicians prepare to replace the section of fibre that's causing the problem.
Bell Aliant could not say how long it will take to fully restore service.