In a Q&A with readers of The Times newspaper, Matthew Key, Chairman and Chief Executive Officer, Telefónica Europe answers questions related to O2 and the iPhone. Key admits selling the iPhone for the last two years has proved a steep learning curve.

During the Ask the Boss: Matthew Key feature a reader Andy asks: "Is there any truth in the rumour that after Orange and Vodafone are able to sell the iPhone you will not allow people to unlock their iPhone, even if they are out of their contract period?"

Key replies: "There is absolutely no truth in that rumour. Once the iPhone becomes available on other UK networks, we will allow O2 customers to unlock their iPhones, although of course they will still need to honour any outstanding contract period they have. At the end of their contract period, they are entirely free to move to another operator - though naturally we hope they won’t want to!"

Another Times reader Nikesh asks a question on many O2 iPhone users minds: "Why is your 3G coverage so appalling? Now that Orange and Vodafone, both of whom have better coverage, have the iPhone, will O2 be improving theirs?"

Key replies: "I accept that our network has been under pressure in parts of London, where we see the highest concentration of smartphone users. For two years we have been the exclusive provider of the Apple iPhone - the fastest selling and most powerful phone in the world. It’s been a steep learning curve for the industry and ourselves - the O2 network has seen an 18-fold increase in data carried over the network in the last year and traffic continues to double every three months."

"This level of throughput increase would cause pressure on any business. To put this into some context, watching an average YouTube video on a smartphone can be the network equivalent of sending 500,000 text messages."

"We are constantly increasing the capacity of our networks and the good news is that we now better understand and know what fixes we need to put in place to improve our levels of service."

"Fortunately, it’s not about needing new mast sites and we are investing more than £30 million to address capacity issues in London alone between now and Christmas and I’m confident that we’ll see much improved levels of service as a result."

The full Q&A can be found here.

Before joining O2, Key worked with Vodafone as UK Operations Finance Director for four years. He has also held various financial positions with Kingfisher, Coca-Cola, Schweppes and Grand Metropolitan.

Check out our new Macworld Mobile site.

Follow Macworld UK on twitter: