How Much Would Apple’s (AAPL) Wireless Dreams Cost?


Is Steve Jobs, the guy who once referred to telecom operators as “orifices,” looking to start a phone company? BusinessWeek reports that Apple has looked into joining the pool of bidders for next year’s FCC wireless spectrum auction.

The upside: Apple would have control over the airwaves that power its devices — unlike its current, dicey relationship with AT&T. Apple could use that control to design exclusive wireless services that get its devices to work better together without depending on phone and cable companies that get in the way.

The downside, beyond the fact that Apple has no experience building or running a phone company: the cost. BusinessWeek guesses that it would take $9 billion to win an airwave auction, while the cost of building the network could be “measured in hundreds of millions, possibly, rather than billions.” That expense might be feasible, given Apple’s $14 billion cash hoard. But that price tag isn’t even close, says Txtbl CEO Amol Sarva.

Sarva, who is quoted in the BusinessWeek piece dismissing the Apple-as-carrier theory, writes in his own blog that building a network would cost “more like $10 billion.” We’ll take his word for it — he co-founded “virtual” wireless carrier Virgin Mobile.

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