The mobile company had been expected to list on the London Stock Exchange in 2018 following 4G and 5G spectrum auctions in April, but sources have said the IPO has been moved back.
The company has been planning to float for years now, however, Telefonica chief executive Jose Maria Alvarez-Pallete said earlier this year that financial markets were not yet ready for an O2 float, and the recent IPO failures of Funding Circle and Aston Martin, which sank on their stock market debuts earlier this month, are thought to have convinced bosses at Telefonica to sit tight.
Its delay will cause further consternation as volatility, uncertainty and a perceived lack of investor appetite weigh on the listings pipeline.
Accountancy giant EY has previously said that Brexit uncertainty is casting a "shadow" over the London IPO market.
O2's float is one of the most hotly anticipated, with analysts valuing the UK's second largest mobile firm at up to £10bn.
Telefonica first revealed that it would explore a London-listing of O2 in 2016 after seeing a tie-up with rival operator Three collapse over competition concerns.
It had been awaiting the outcome of a radio spectrum sale, which took place in April and saw the biggest chunk go to O2 in an auction that raised over £1bn for the government.
Additional reporting by newswires
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