It's not clear how widespread the problem is, but a number of iPhone users in the UK are reporting serious reception issues on O2's network. Our source in the UK has told us that his O2 iPhone currently has no service in the same room as other O2 phones with five bars and an unlocked iPhone on Vodafone with full service, and Apple's UK support forums are buzzing with similar reports. Users are also reporting that replacement iPhones don't exhibit the same problems, so the problem might be with the device itself -- but that would be strange, seeing as iPhones in other countries don't have the same issues. For its part, Apple appears to be replacing units as they're brought in, and hasn't made any official statement on the matter yet -- any UK iPhone users out there care to chime in?
Read - InformationWeek article
Read - Apple Support thread about the issue