It's not just about the cost of ILS equipment
What a lot of pilots don't realise is that it is not a matter of an airport operator simply buying more sophisticated ILS equipment to offer Cat III precision approach capability at an airport. Precision approach capability is all about a "whole of airport" operations concept.
Any increase in precision approach capability beyond Cat I capability may also involve costly adjustments to airport perimeter fencing and security, airfield lighting, standby power facilities as well as to surface movement guidance and surveillance systems; just to name a few.
As LeadSled indicates all these associated costs need to be factored in as well, and assessed against the likely number of diversions and their economic impact under a CBA. At the end of the day, it is usually the user airlines that will determine whether a higher level of precision approach capability is operationally justified and whether they are prepared to pay for the extra level of capability. Regulators may also mandate a higher level of capability if they consider safety is likely to be compromised.