http://news.yahoo.com/s/ap/20080211/ap_on_hi_te/starbucks_at_t_8;_ylt=AuOUvO8jwnK2DrKPzHXMNzYE1vAI
http://news.yahoo.com/s/ap/20080211/ap_on_hi_te/starbucks_at_t_8;_ylt=AuOUvO8jwnK2DrKPzHXMNzYE1vAI
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AP
Starbucks switches to free AT&T Wi-Fi
By ELIZABETH M. GILLESPIE, AP Business Writer Mon Feb 11, 2:48 PM ET
SEATTLE - Starbucks Corp. and AT&T Inc. will
start offering a mix of free and paid wireless
Internet service in most of the international
coffee retailer's U.S. shops, beginning this spring.
ADVERTISEMENT
The move announced Monday ends a six-year
partnership T-Mobile, which did not include free
Wi-Fi and charged higher fees than AT&T will.
Starbucks said it will give customers who use a
Starbucks card two hours of free wireless access
per day. More time than that will cost $3.99 for
a two-hour session. Monthly memberships will cost
$19.99 and include access to any of AT&T's 70,000 hot spots worldwide.
Nearly all of AT&T's broadband Internet
customers, about 12 million, will automatically
have unlimited free Wi-Fi access at Starbucks, the companies said.
The deal boosts the number of AT&T hotspots in
the U.S. to 17,000 the most in the nation.
"We're very excited about what we're doing
together to align ourselves with what consumers
want," said Rick Welday, a chief marketing
officer for AT&T's consumer business.
Current T-Mobile HotSpot customers, who pay from
$6 per hour-long session to $9.99 for a day pass
to $39.99 a month for unlimited access, will get
Wi-Fi access at no extra charge through an agreement between AT&T and T-Mobile.
Chris Bruzzo, Starbucks' chief technology
officer, would not disclose how many customers
use the T-Mobile service in Starbucks stores, but
said he expects many more will use the new
service. Starbucks will begin rolling it out this
spring and aims to have it available in its more
than 7,000 company-operated domestic stores by the end of the year.
Robert Toomey, an analyst with E.K. Riley
Investments, called the move "a good first step"
for a company that has seen its traffic into U.S.
stores decline for two consecutive quarters.
It's smart for Starbucks to link the new Wi-Fi
service to its purchase card, which tens of
millions of people use to buy their mochas and lattes, he said.
"I think it's a double positive for both product
sales and traffic," Toomey said.
AT&T, the nation's largest telecommunication
company, has powered the network service
Starbucks uses to run its cash registers and other computer systems for years.
Asked if problems with quality and service
reliability were factors in Starbucks' decision
to part with T-Mobile, Bruzzo said no.
"Starbucks was at a place where we were
evaluating who our right go-forward partners
should be, and as we looked at who could provide
that in the best possible way, AT&T continuously
came back to the front," Bruzzo said.
Starbucks' switch to AT&T is a big blow for
T-Mobile, which has nearly 8,900 wireless
hotspots in the U.S., most of them in the coffee
company's stores. T-Mobile also offers its
subscription wireless service in Borders Books
and Music stores, FedEx Kinko's stores, various
hotels, airports and airline clubs.
T-Mobile USA, headquartered in suburban Bellevue,
did not immediately return calls for comment.
Last month, AT&T announced plans to make its
10,000 Wi-Fi hotspots free to nearly all of its
broadband Internet customers. The move expanded
access to include subscribers who have a lower
tier of high-speed Internet service, increasing
to 12 million the number of broadband customers
who can use the hotspots free of charge.
Previously, only subscribers to AT&T's premium
broadband service had free access.
"Here we are with the nation's largest Wi-Fi
network," said AT&T's Welday. "Consumer trends
are clearly pointing toward an increased need and
desire to access broadband outside the home and
office what a terrific opportunity."
The companies did not disclose financial terms of their deal.
AT&T also is giving Starbucks' more than 100,000
U.S. employees free wireless accounts and said it
will soon extend the Wi-Fi at Starbucks to its
wireless phone customers. The company announced
no details or time frame for that expansion.
Starbucks offers in-store wireless Internet
access in some international markets, and Bruzzo
said the company is committed to expanding it,
though it has no timetable. He also said
Starbucks plans to work toward offering wireless
Internet at stores its licensing partners run in
airports, shopping malls and the like.
Starbucks shares rose 11 cents to $18.37 in
afternoon trading while AT&T shares rose 31 cents to $36.68.
___
AP business writer Elizabeth White contributed to this report from San Antonio.
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