This Engadget Mobile article mentions some EDGE upgrades to be made on O2's UK network, which sort of seems like a backwards step, considering most of Europe is already enjoying 3G mobile broadband networks. O2's updating current towers with EDGE technology may be a precursor to an iPhone release on O2's network. That would be a major disappointment - Apple being unable to optimize their battery technology in order to include 3G chips in their product (especially in such a 3G laden environment).
The two may not have anything to do with one another, but the European release of the iPhone is fun to speculate about.
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