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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  • http://billso.com billso

    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.

  • http://billso.com billso

    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.

  • http://billso.com billso

    Accord­ing to Engad­get and this press release, the roll­out starts 1 May 2008.

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