While the company claimed that voice calls are not affected by the problem, some customers say they cannot make calls or send texts either, the BBC reported.
According to an O2 spokesperson, a software issue identified by a third-party supplier was to blame for the outage.
"We believe other mobile operators around the world are also affected. Our technical teams are working with their teams to ensure this is fixed as quickly as possible," O2 spokesperson was quoted as saying.
"We'd encourage our customers to use WiFi wherever they can and we apologise for the inconvenience caused."
The outage is having knock-on effects for other services that use the O2 network, including Transport for London's electronic timetable service at bus stops, which has stopped working, the report said.
As per a report in the Independent, the affected phones, which may be every single device registered to the network, simply fail to show any kind of data connection and will not connect even when turned off and back on or when other workarounds are tried, according to users experiencing the problem.
O2 said that the problem stemmed from a global software issue at a third-party supplier, understood to be Ericsson, which has also affected other mobile operators around the world, the report said.
"We're aware that our customers are unable to use data this morning," O2 spokesperson said.
"One of our third-party suppliers has identified a global software issue in their system which has impacted us."
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)