Some 5,000 people in the Gloucestershire, Penn., town of Wotton-under-Edge could not use their phones after offenders cut through cables at a telephone exchange in the town.
Gloucestershire police are linking the cable-cutting with a failed bank raid at a Lloyds TSB Bank in the town in the early hours of this morning.
All land lines including internet calls and emergency 999 numbers are currently out of use.
Phone operators BT said it will be several days before all phone lines are restored in the town.
Gloucestershire police spokesman Matt Ford said: "Offenders broke into the rear of Lloyd's TSB Bank in Long Street, Wotton, some time before 5.20am.
"They tried to remove a cash machine from inside the premises but they left the scene when their attempt was unsuccessful.
"Officers investigating the incident believe those responsible for the raid also severed a number of cables at a telephone exchange in Clarence Street, Wotton in a bid to disable the bank's alarm systems.
"In the second incident offenders removed several manhole covers to gain access to telephone cables."
Police have advised people needing emergency help to go to the town's police station where emergency crews are on standby.
British Telecom have dispatched repair teams to the scene and emergency phone lines such as those to doctors surgeries are being prioritised as they re-attach and replace the severed cables.
BT spokesman Chris Orum said that emergency mobile phones were being drafted into the town.
He added that 19 copper and seven fibre cables had been effected when the cable was severed.
Mr Orum said: "Persons unknown cut through a large number of cables at the exchange running into Wotton-under-Edge. This has had the effect of putting everyone in Wotton out of service.
"We are trying to get new cables in, it's a long and laborious process. Our main concern is to return the phone lines to our customers. But it could take several days before the service is fully restored."