Optus failed to provide honest and credible communication during last year's "potentially dangerous" phone outage, and should be forced to provide fair compensation in the event of another outage, a Senate committee has found.

The November 8 outage lasted about 12 hours, affecting major banks, transport operators, healthcare providers and prevented almost 3,000 triple-0 calls from being connected.

Former CEO of Optus Kelly Bayer Rosmarin resigned two weeks later.

It is estimated about 10 million Optus customers and 400,000 businesses began their day without mobile or internet service, before most services were progressively restored by 4pm.

Optus faced backlash on the day for poor communication with customers, and a Senate inquiry set up to investigate its response has handed down a report with seven recommendations, focusing on the telco's at times "manifestly inadequate" public communications.

The committee, chaired by Greens senator Sarah-Hanson Young, said Optus chose to use social media to communicate outages between 6:30am and 10:40am, despite the fact that affected customers did not have internet access.

"In the committee's view, it stretches credulity that Optus did not think to update the Australian public sooner and in a more accessible way given the severity of the circumstances," the report said.

"The outage was not just inconvenient but was potentially dangerous.

"The committee concludes that Optus's public communications during the outage were manifestly inadequate."

Among the recommendations is a call for a mandatory communications plan for telcos, "that obliges them to communicate to government, emergency services and the public during national outages".

The inquiry also slammed Optus as not having learned from a 2022 data breach, caused by a cyber attack.

"The failure of Optus to provide credible, honest and forthright information during the outage also reflects on Optus's own inability to improve on its past communication lapse regarding the public disclosure of a malicious breach of its customers data in 2022," the report said.

The inquiry has also recommended the federal government work with telecommunications carriers to examine large-scale network roaming arrangements for major outages.

Communications Minister Michelle Rowland said in a statement the government was already working on responding to a review of the outage.

"In the wake of the widespread outage, the Albanese government commissioned an independent review and has accepted all 18 recommendations to address structural issues within the telecommunications ecosystem," she said.

"We have already been actively working with industry to implement these changes as a priority."

The report has suggested the Telecommunications Industry Ombudsman be directed to set up a dispute resolution process to ensure appropriate compensation is paid in mass outages.

Optus customers affected by the outage were offered free data or free NBN speed increases.

In its submission, Optus stated that it had assessed whether to compensate customers for a day of lost service, but found that this only amounted to between $1 and $2.

Telcos should be brought under the Customer Service Guarantee so they are legally required to provide compensation, the report said.

"The committee considers that the Optus outage exemplifies the fact the current regulation is not fit for purpose," it said.

Optus told the committee it determined the cause of the outage was a number of key routers disconnecting themselves from the Optus network in response to a change in routing information.

During the public hearing on November 17, former CEO Ms Bayer Rosmarin advised the committee that 8,500 customers and small businesses had "reached out" to discuss compensation.

Optus reported it was in discussions with customers for damages amounting to $430,000 in financial compensation and had so far paid out $36,000.

Ms Bayer Rosmarin told the inquiry the telco did not know at the time why triple-0 calls would not connect.

But the report found that it had since been discovered the issue involved 3G phone towers, and given their imminent planned shutdown, it was unlikely to happen again.

In a statement, Optus vice-president of government and regulatory Andrew Sheridan said he welcomed the Senate report.

"We would like to apologise again to all our customers who were affected by the outage on 8 November 2023, particularly those who could not connect to emergency services and business owners whose services were disrupted," he said.

"Since the outage last year, Optus has conducted a review of its systems and processes and as a result, we have made important changes to our ability to manage emergency calls during network challenges and our processes."