Apple 2.0

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Verizon iPhone: What will it take?

September 30, 2009: 9:57 AM ET

$1.78B iphoneWhat would it take to make Verizon's (VZ) cellphone network compatible with Apple's (AAPL) iPhone?

About $1.78 billion, according to a report issued Wednesday by Aircom International, a U.K.-based network consulting group.

And that's just for the first year.

The report estimates the capital expenditures required to deploy so-called 4G networks -- also known as LTE, for Long Term Evolution -- in various regions of the world. Their findings:

Region Estimated CAPEX investment
US US $1.78 billion
Europe US $880 million
Middle East US $337 million
Asia Pacific US $232 million

Judging from the comments here over the past year, there is no shortage of Americans who would love to see Verizon carry the iPhone. They include Verizon subscribers interested in moving up to a better smartphone and AT&T (T) customers who would switch in a New York minute to a carrier that wouldn't drop so many of their calls (22% dropped calls is typical in Manhattan, according to a recent Genius Bar report.)

But unless Apple were willing to make a new iPhone just for Verizon's CDMA network, everybody's going to have to wait for the carrier to build a new network compatible with the iPhone's GSM chipset.

Verizon has announced plans to start rolling out its LTE network later this year, with a major push in 2010. It could be 2011 before the carrier is is ready to provide nationwide 4G service.

This assumes, of course, that Apple and Verizon could come to terms on such issues as subsidies and revenue sharing, something they've been famously unable to do in the past.

You can read the Aircom report here.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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