How old is the sim ?
Network changes around April of this year rendered a lot of old sim cards useless and need to be swapped for new ones.
Have you confirmed the phone is working with any sim?
When you say settings are correct, what settings are you using (I'm assuming it's data that's the issue?).
For a phone that old it would have used WAP but I've no idea if O2 still support that now.
WAP is not longer supported by any network, as people moved to full browser type experience but the original iPhone was GPRS/EDGE device so should still work, all be it its now over 14 years old. It could be the sim card reader has failed.
Have you tried a network settings reset or ordered a new sim card?
You didn't answer my question as to what settings you were using and if it was just data that was the issue?
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