Apple has reached an exclusive iPhone distribution deal with network operator, Cingular — but was rejected by second-largest carrier, Verizon, almost two years ago.

USA Today reports that Verizon rejected Apple's approach because the Cupertino company wanted a slice of monthly network subscription fees.

Apple also wanted control of how and where the phones could be sold, alongside control of the relationship with iPhone cutomers.

The report cites Verizon vice president Jim Gerace, who said: "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial."