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Feb 11, 11:34 AM EST

Starbucks to offer free Wi-Fi with AT&T


SEATTLE (AP) -- Starbucks Corp. is teaming up with AT&T Inc. and will start offering a mix of free and paid wireless Internet service in many of its U.S. coffee shops, beginning this spring.

The world's largest specialty coffee retailer's move ends a six-year partnership T-Mobile, which did not include free Wi-Fi and charged more than the new AT&T service will cost.

Starbucks said Monday it will give customers that use its Starbucks purchase card two hours of free wireless access per day. After that, it 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 will automatically have unlimited free Wi-Fi access at Starbucks.

Current T-Mobile HotSpot customers, who pay anywhere 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.

AT&T, the nation's largest telecommunications 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.

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.

Monday's announcement 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.

Welday said the company viewed the deal with Starbucks as a "competitive opportunity."

"Here we are with the nation's largest Wi-Fi network," Welday said. "Consumer trends are clearly pointing toward an increased need and desire to access broadband outside the home and office - what a terrific opportunity."

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 the expansion.

Starbucks shares slipped 20 cents to $18.06 in morning trading while AT&T shares rose 12 cents to $36.49.

AP business writer Elizabeth White contributed to this report from San Antonio.


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