Latvia said it had dispatched a warship on Sunday after damage to a fibre optic cable to Sweden that may have been "due to external factors".
The navy said it had identified a "suspect vessel", the Michalis San, which was near the location of the incident along with two other ships.
Nations around the Baltic Sea are scrambling to bolster their defences after the suspected sabotage of undersea cables in recent months.
After several telecom and power cables were severed, experts and politicians accused Russia of orchestrating a hybrid war against the West as the two sides square off over Ukraine.
NATO earlier this month announced it was launching a new monitoring mission in the Baltic Sea involving patrol ships and aircraft. The aim is to deter any attempts to target undersea infrastructure in the region.
"We have a warship patrolling the Baltic Sea around the clock every day and night, allowing us to quickly dispatch it once we learnt about the damage," Latvian navy commander Maris Polencs said at a briefing Sunday.
Prime Minister Evika Silina said: "We have notified the Swedish authorities and are working together with them to assess the damage and its reason."
Swedish Prime Minister Ulf Kristersson said he had been in contact with Silina during the day.
"There is information suggesting that at least one data cable between Sweden and Latvia has been damaged in the Baltic Sea. The cable is owned by a Latvian entity," he posted on X.
The damage occurred in Swedish territorial waters at a depth of at least 50 metres, officials said.
The cable belongs to Latvia's state radio and television centre (LVRTC) which said there in a statement that there had been "disruptions in data transmission services".
The company said alternatives had been found and end users would mostly not been affected although "there may be delays in data transmission speeds".
The statement added: "Based on current findings, it is presumed that the cable is significantly damaged due to external factors. LVRTC has initiated criminal procedural actions."
European Union President Ursula von der Leyen expressed her "full solidarity" with the countries affected by the incident.
"The resilience and security of our critical infrastructure is a top priority," von der Leyen wrote on X.
