Operators were scrambling to repair damage to four undersea cables in the Luzon Strait between Hong Kong and Taiwan, with some estimating the multimillion-dollar job could take up to three weeks.

The repair effort came as communities in southern Taiwan cleaned up from the 7.1-magnitude quake that left two people dead, 40 injured and was felt strongly enough in Hong Kong to send people scurrying into the streets.

Assistant director (regulatory) of the Office of the Telecommunications Authority, Chan Tze-yee, said it was the 'most serious damage' Hong Kong had seen in overseas communications and the impact was 'unimaginable'.

Telecommunications with the US and Canada through the Luzon Strait cables were nearly all severed and international calls, roaming services and internet access 'had almost come to a halt', he said.

Companies heaved sighs of relief that the disruption struck in the middle of the holiday period with business at a low level and many staff away, but there were fears about what would happen if the problems were not fixed quickly.

Hong Kong General Chamber of Commerce chief economist David O'Rear said the holiday period was the 'best possible time' for the disruption to occur.

'Almost everyone is on half a staff so we don't expect to see a major impact,' Mr O'Rear said.

The Trade Development Council said that, as the week before Christmas was the peak season for shopping and internet sales for major markets such as the US and EU, an earlier disruption would have spelled disaster. 'Thank God the earthquake didn't happen last week,' a spokesman said.

In Taipei, Lin Jen-hung, vice-president of Chunghwa Telecom, Taiwan's largest operator, said four cables were damaged and repairs would take two to three weeks.

'We need help from international rescue units to send vessels to pull up the cables to repair them,' he said, estimating the cost at NT$200 million (HK$47.7 million).

An Ofta spokesman said last night the severe congestion of internet traffic was expected to continue for a few days. It would take at least five days for some of the cables to be repaired.

The spokesman urged people to minimise non-essential internet access to overseas websites and not to keep making non-urgent overseas calls if they failed to get through.

Asia Netcom, one of the cable operators hit by the earthquake, said the damaged cables made up the main pipe that routed internet traffic to the US, stretching from Hong Kong via Taiwan and Japan.

'Traffic must go through alternative routes now. But the capacity along those routes is limited and all the traffic in Asia is swamping these tiny routes,' said Bill Barney, chief executive of the operator.

Mr Barney estimated that 60 to 70 per cent of the capacity in Asia had been affected by the quake.

Major local internet service providers said the speed for data transfer had been significantly affected. PCCW said the network could support only 50 per cent of normal telecommunications, while ISP i-Cable said only 10 per cent of the normal flow was allowed.

Ringo Lam Wing-kwan, chairman of the Internet Professionals Association's policy committee, said some companies, especially small businesses, had no backup as they never expected the internet to fail. For these firms, the biggest impact was on e-mail services, their primary means for placing orders.

Mr Lam said internet traffic between North Asia - especially South Korea, Japan and the mainland - and North America was very heavy. The connection was usually routed via Japan, Taiwan or Australia, and any disruption should automatically redirect the connection through Singapore, although this meant heavy congestion and delayed service.

Simon Twiston Davies, chief executive of the Cable & Satellite Broadcasting Association of Asia, said the vulnerability of undersea cables meant that companies needed to seriously consider backup options, including satellite.

'Undersea cable is point to point but satellite is point to multi-point and not subject to physical disruptions,' Mr Twiston Davies said.