Customers have been reporting issues since around 4am with many unable to make calls, send text or use data.
02 network down across UK The company said one of their third party suppliers had identfied a software issue in their system.
In a tweet updating customers, O2 has now said that services are slowly beginning to be restored, and this will continue throughout the night.
O2 network down across the UK - can you claim compensation?A joint statement has also been issued which reads:
Mark Evans, CEO, Telefonica (O2) UK: "I want to let our customers know how sorry I am for the impact our network data issue has had on them, and reassure them that our teams, together with Ericsson, are doing everything we can.
"We will continue to work with Ericsson, through the night, who have assured us that a full service will be restored for customers by the morning. We fully appreciate it’s been a poor experience and we are really sorry.
Marielle Lindgren, CEO Ericsson UK & Ireland: "The cause of today’s network issue is in certain nodes in the core network resulting in network disturbances for a limited number of customers across the world, including in the UK.
"We have been working hard on resolving the UK data issue since early this morning. The faulty software that has caused these issues is being decommissioned. Our priority is to restore full data services on the network by tomorrow morning. Ericsson sincerely apologises to customers for the inconvenience caused."