Starbucks drops T-Mobile, offers free Wi-Fi from AT&T

Customers who buy a cup of joe using a Starbucks card will now receive 2 hours of free Wi-Fi at the ubiquitous coffee shop thanks to a new partnership with AT&T.

Starbucks is ending its six-year relationship with T-Mobile, and inking a deal with AT&T instead. Starting this spring, AT&T will be providing the Internet access at over 7,000 Starbucks locations across the United States and in the process making the Wi-Fi more attractive to customers who balked at paying T-Mobile's $10 per-day fee.

While final pricing structures could change, some details have come out: the service will cost $3.99 for two hours of Internet access. But those customers who register and use their Starbucks card will receive two hours of free access per day. An unlimited plan is available for $19.99, which includes access to over 70,000 AT&T hotspots worldwide.

Existing T-Mobile HotSpot customers aren't being left out in the cold; thanks to an agreement with AT&T, they can continue to access the Wi-Fi at Starbucks without paying extra.

The move to AT&T makes sense for Starbucks on a number of fronts. First, the coffee chain already has close ties with Apple and its iTunes store, and AT&T is the mobile partner of Apple. Second, AT&T provides the technology for Starbucks' business operations including point of sale systems, which it has been doing for the past 10 years.

"As we continue to build our technology offerings in ways that both enhance and expand the Starbucks Experience for our customers, we made a strategic decision to expand our existing relationship with our longtime technology partner AT&T to include consumer Wi-Fi," remarked Starbucks CTO Chris Bruzzo.

Third, the price point of T-Mobile HotSpot service no longer made sense. Few Starbucks customers were willing to pay $10 for a couple hours or less of Internet access, especially when free wireless hotspots can now be found at alternative coffee shops nearby. Because AT&T is also running the Starbucks cash registers, the company can more easily integrate purchases with free Wi-Fi access. Starbucks customers will also now have more incentive to use the company's card, which works like a refillable gift card.

Starbucks says the AT&T Wi-Fi service will be rolled out on a market-by-market basis. The company will likely have in-store advertising to promote the new offering, but has not yet made any announcements.