Several iPhone users on Apple's discussion forums are reporting that they are having reception issues on the British O2 network, and that it appears to be the iPhone itself causing the problems. Some users are switching from an older handset to the iPhone, and noticing the drop in reception, whereas others are merely wandering around, watching the signal typically fluctuate between zero and three bars. Curiously, when the iPhone is attached to the charging dock, reception increases to five bars for those users. Some have exchanged their handsets – O2 has a 14-day exchange policy, according to some of the forum members – and the issue has dissipated.
One user notes that he has noticed the reception indicator is not entirely accurate on some phones. He says that his previous phones would not work reliably with two bars, but his iPhone receives and sends calls with one bar, and he is able to browse the internet using EDGE, achieving acceptable speeds.
iPhone vs. Nokia handset reception on the O2 network