In a regulatory filing, Telefónica said it was considering "different strategic options" for the UK brand, all of which involve keeping a majority share.
The European Commission blocked the sale to Hutchison, the company which owns mobile operator Three, stating it would lead to higher mobile prices.
In a separate filing, Telefónica said it planned to float Telxius, its infrastructure arm, later this year.
"We have decided that we are not going to sell the control of O2 in Britain," chairman José Maria Alvarez-Pallete said, according to Reuters. "In the coming weeks we will decide if it will involve a listing or the entry of new shareholders in O2 UK."
The proposals come as Telefónica attempts to pare back its debt load.