Some users have also reported problems with making voice calls, despite claims from O2 that voice services are unaffected.
"Our technical teams are working on the issue with high priority".
The company said one of their third party suppliers has identfied a software issue in their system.
(DPA/PA Images/Getty)Why is O2 not working?
"We'd encourage you to use Wi-Fi wherever you can and we are really sorry". "We apologise for any inconvenience".
In a message on Twitter, O2 said: "We are aware our customers are unable to use data this morning".More news: Mitchell Marsh dropped by Australia for series opener against India
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The issue is also impacting customers of MVNOs that piggyback on O2's infrastructure, like GiffGaff, Tesco Mobile, and Lyca Mobile.
In addition, London Bus timetables rely on O2's coverage, meaning that these were also down this morning.
The Telegraph confirmed that some customers of these other networks were also affected by the outage. Londoners, for example, are finding that the Countdown timers at bus stops are all crippled as they can't communicate with London's transport executive, TfL.
Some customers have reported being unable to use their data, while others are struggling to send texts.
The service was still down for many users at the time of writing and O2 said that it was working to fix the issue "as quickly as possible". "Our technical teams are working extremely hard to resolve this", the company said.
Some customers can not even reach the service status page.