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From today’s New York Times: Starbucks is switching WiFi providers. After a 6-year deal with T-Mobile, the milk-and-coffee merchant will offer WiFi access through AT&T. The arrangement gives AT&T 17,000 WiFi access points throughout the US, vaulting the telco to the number one spot in the country. AT&T has 70,000 WiFi hot spots worldwide.

AT&T has added mobile subscribers through its iPhone deal and other initiatives, while T-Mobile has struggled to keep pace.  However, AT&T will allow T-Mobile customers to use the Starbucks hot spots free of charge, through a roaming agreement. This should appease some T-Mobile subscribers who used Starbucks hot spots.

Starbucks card users will receive a free 2 hour WiFi session each day. Additional time on the wireless network starts at US$4 for 2 hours. AT&T broadband subscribers already had free access to AT&T hot spots as of last month.

Starbucks benefits by gaining access to AT&T’s larger mobile subscriber base. Other users will have a new reason to get and use a Starbucks card. Enhanced wireless access means that Starbucks customers might stay longer, and buy more items during their visit.

Chains like Starbucks often use a single national vendor for telecom offerings such as WiFi, to reduce security issues, consolidate reporting, and provide consistent services and branding across locations.

They won’t be buying breakfast sandwiches, though.

BusinessWeek reports on modu, an Israeli company that has developed a modular mobile phone around the size of an iPod Nano. The Associated Press reports the phone will be launched on 1 October 2008 in Italy, Russia and Israel.

As Reuters pointed out yesterday, telecoms and mobile phone manufacturers will be out in force at this week’s Mobile World Congress in Frankfurt, Germany.  Modu is only one of several hundred manufacturers who will use their booths to show off their latest hardware.

Modu has designed a basic GSM phone that could be used on its own, but the company wants third parties to license the technology and build “jackets”. These are devices like media players, mobile handsets and other gadgets that have a slot for the modu phone. The jackets provide a larger, more comfortable form-factor for everyday use, and provide opportunities to decorate, brand and extend the phone.

Founder Dov Moran has the experience and connections to pull this off, having sold his flash memory business, M-Systems, to SanDisk in 2006 for US$1.5 billion. He’s invested US$5 million in modu, according to Reuters, and believes his new company could generate US$1 billion in sales revenue by 2011. That would rival the largest mobile phone manufacturers like Nokia and Samsung, whose businesses rely on a traditional business model. Consumers buy a handset, use it for a while, and upgrade to a different model.

The modu concept would let manufacturers add mobile connectivity to a wide range of electronic devices. Digital cameras could have a modu slot, for example. Car stereo systems might include a modu slot, as shown in the concept video on the modu website. A modu-compatible media player would be an interesting rival for the iPhone.

Creating a consumer hardware standard is tricky. Video games are a good example. Cartridges and software from one system usually do not work with another manufacturer’s console.