Sometimes people want to nitpick and say that zero should only be used for a number and oh should only be used for the letter. But in my daily life, I hear it all the time. I even hear it sometimes in the same phone number, like "Zero eight eight five five oh one oh". I guess it comes down to your opinion on whether or not phrases that native speakers use regularly can be considered incorrect. I argue that the fact that this pronunciation is used regularly by native speakers means that it is correct.

British phone numbers start with 0. Native speakers say "oh", not "zero" for this number.