O2 has started reusing the 900MHz frequency (traditionally used for 2G coverage) for 3G coverage. The benefit of the 900MHz frequency is that the signal travels much further and so they can cover a wider area with fewer cell sites.
I don't think O2 would invest in 2G given this change.
My understanding of the GPRS to EDGE upgrades was that they only happened at cell sites where a software update was the only thing needed to bring EDGE online.