Starbucks Serves Up Wi-Fi Access

Starbucks is teaming up with T-Mobile International to become one of the largest Wi-Fi network suppliers in both the U.S. and Europe.

by Michael Singer of siliconvalley.internet.com [August 22, 2002]

Oh, give me a double latte, half-caf, extra whipped cream and... a Wi-Fi connection.

Coffee giant Starbucks launched a campaign to put wireless access with T1 speeds in some 1,200 of its U.S. and European stores with about 2,000 of its stores but the end of the year.

But, some customers may see the deal in the same way they view Starbucks' coffee... vary overpriced for something that should be free.

The project is part of a three-way deal between Starbucks, T-Mobile International, the wireless subsidiary of German-based Deutsche Telekom, and Hewlett-Packard.

The pact builds on relationships Starbucks already had in place and a 12 month beta test. The agreement expands not only T-Mobile's wireless footprint, but also turns Starbucks into one of the largest "Wi-Fi" (802.11b) network suppliers in the U.S. and Europe.

An additional 800 Starbucks locations in the U.S. are scheduled to feature the service by the end of the year. With an eye toward global expansion, Starbucks and T-Mobile have also initiated a six-month pilot in select London and Berlin locations.

"We have evolved the brand that is the third place people go between home and work," said Starbucks chairman Howard Schultz. "People see us as extension of the front porch or the office. As a result of that, this is a rare opportunity to address our collective vision. Our customers have been waiting for just such an offering: high-speed wireless Internet access in a familiar and widely available location that keeps them connected while on the road, or between the home and office."

The network is accessible for Starbucks customers with a wireless-ready notebook computer or Pocket PC. To connect, customers need a T-Mobile HotSpot account and Wi-Fi capability for their wireless device.

T-Mobile is offering Starbucks customers a free trial of its T-Mobile HotSpot service for 24 hours, after which the company will charge ISP prices. In addition, T-Mobile offers a variety of Internet access service plans, including National and Local Unlimited monthly subscription plans, as well as Prepay and Pay-As-You-Go plans on the company website, at company stores, and at Starbucks.

The three companies stress that the motivating factor is a push by customers to have wireless Internet access. They are not deploying technology that does not yet have a market.

"I feel fortunate to kick this off," said HP president Michael Capellas and self proclaimed coffee addict. "I have always been excited about the ability to tie in all of these devices. But, let's keep this in perspective. What we are doing is building the next generation of Internet access. This is about customers and how can we make it easy for them. The more we can make the technology fade into the background the better."

Palo Alto, Calif.-based HP is acting as the preferred technology provider for Starbucks, but as of now, no Wi-Fi cards will be sold at the Starbucks outlets.

HP's real contribution is its new Wireless Connection Manager. The free, downloadable software makes it simple for mobile users to configure their notebook or PDA.

"We took a look at what it would take for customers to get set up," said Capellas. "Our engineers found that if you are not running XP it took you about different 14 steps including a reboot."

Starbucks said it would begin identifying its stores with "T-Mobile HotSpot" decals, although roaming wireless warchalkers tagged many spots well before today's announcement.

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