What's going on at Starbucks? First it's slumping sales, then a $1 cup of Joe, now it's free Wi-Fi.
McDonalds and other fast-food chains have been cutting into Starbucks' business and the coffee giant is fighting back.
The pricey coffee shop chain has announced it's dropping T-Mobile as its Internet provider and replacing it with AT&T, which will offer free Web browsing to Starbucks cardholders at 7,000 company-owned stores in the U.S.
Starbucks, which recently tested a $1 cup of coffee at its Seattle-area stores to compete with McDonalds, will allow customers to use its broadband connections for up to two hours per day at no charge. More than 12 million qualifying AT&T broadband and AT&T U-verse Internet customers will have unlimited free access to the Wi-Fi service.
In addition, more than 5 million of AT&T's remote access services business customers will be able to access Wi-Fi service at Starbucks locations. AT&T said it will soon extend the benefits of Wi-Fi at Starbucks to its wireless customers.
Currently at Starbucks, T-Mobile HotSpot customers pay $6 per hour, $9.99 for a day pass or $39.99 a month for unlimited access. Consumers still using T-Mobile after the switch-over will get Wi-Fi access at no extra charge through an agreement between AT&T and T-Mobile.
"People want to stay connected to their world 24/7, and Wi-Fi hot spots, broadband and wireless make that mobility possible," said Rick Welday, AT&T chief marketing officer, Consumer. "Laptops and smartphones give us the online mobility we crave, and now millions of AT&T and Starbucks customers will get Internet access free from the comfort of their neighborhood Starbucks."
"This is what our customers have been waiting for free Starbucks-quality Wi-Fi," said Chris Bruzzo, chief technology officer, Starbucks Coffee Company. "Through our new partnership with AT&T, we also welcome their millions of current customers who can now come in and enjoy free Wi-Fi as part of their daily Starbucks Experience."
T-Mobile phase-out
Currently, to use a computer at Starbucks, consumers must have a T-Mobile wireless account. Beginning this spring, T-Mobile will be phased out and all Starbucks partners will receive free AT&T Wi-Fi accounts allowing them to use the network in Starbucks company-operated locations offering Wi-Fi access.
"Our new relationship with AT&T gives us the opportunity to expand and enhance the range of digital entertainment experiences for our customers as well as our partners, including the continued rollout of the iTunes Wi-Fi Music Store at Starbucks," said Ken Lombard, president, Starbucks Entertainment.
In addition to the free Wi-Fi access for qualifying AT&T customers and any Starbucks Card holder, customers without a Starbucks card will be able to purchase tiered access to the AT&T Wi-Fi network at Starbucks at attractive price points. For a two-hour period, customers will pay $3.99 per session. Monthly membership will also be available for $19.99 per month, and will include access to any of AT&T's 70,000 hot spots in 89 countries around the world, the carrier said.
