Starbucks signs with AT&T

by billso on Monday, 11 February 2008

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.

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  • According to Engadget and this press release, the rollout starts 1 May 2008.
  • Glenn Fleishman of TidBITS has posted an excellent article that supports my customer lock-in hypothesis.

    Fleishman also notes that iPhone users will need WiFi's speed when downloading movies and TV shows to their phones. GSM, the mobile phone technology that is used by AT&T; and the iPhone, is too slow.

    Glenn estimates that a 2 hour movie would download in about 9 minutes on a fast WiFi connection, compared to an hour or more with AT&T;'s fastest GSM connection.

    He also has some nice information about AT&T;'s pricing model for WiFi customers.

    Glenn claims that the Starbucks sandwich ovens are being removed to accommodate more coffee-making equipment behind each counter.
  • According to Engadget, T-Mobile users will get FIVE years of free roaming at Starbucks after the AT&T; switchover. See the T-Mobile press release for the official announcement.
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