It's no secret Verizon is eager to offer its customers the iPhone, and later this afternoon the wireless carrier is expected to announce it's finally done it. But at what cost?

According to a Bloomberg report, Verizon may spend $3 billion to $5 billion subsidizing customer purchases of the iPhone, and that's in the first year alone. The obvious upshot is that Verizon will add a bunch of new subscribers, but subsidies could cut into the carrier's profits. John Hodulik, an analyst at UBS AG, says Verizon could very well sell 13 million iPhones in its first year, each with a $400 subsidy. That adds up to $5.2 billion.

'You basically write customers a $400 check,' said Hodulik. 'We expect margins to be down pretty meaningfully in the first quarter and second quarter.'

While Hodulik's figures might be high, he's not the only one who thinks Verizon will spend billions selling iPhones. An analyst at Barclays Plc figures Verizon will sell around 9 million iPhones this year with a subsidy in the neighborhood of $350. That works out to $3.2 billion.

AT&T also spends a fortune on iPhone subsidies, making up the difference (and then some) through wireless data plans.

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