AT&T out, Google in at Starbucks

Bloomberg

Starbucks is replacing AT&T as a provider of Wi-Fi.

In a grande-sized deal Google Inc. and Broomfield, Colo.-based Level 3 Communications Inc. will replace AT&T Inc. as providers of faster Wi-Fi service at thousands of U.S. Starbucks locations, Starbucks Corp. announced Wednesday.

The service will be roughly 10 times faster than what AT&T now provides, although speeds will vary by location, Starbucks (Nasdaq: SBUX) said.

The new vendors will provide service at new Starbucks locations starting in August, then eventually expand to 7,000 more company-owned U.S. stores over the next 18 months.

Level 3 (NYSE: LVLT) will upgrade the existing Wi-Fi devices used at Starbucks locations and manage in-store connectivity for point-of-sale transactions and Starbucks' other retail functions. The Wi-Fi service will carry Google's (Nasdaq: GOOG) brand.

Financial terms were not announced.

AT&T (NYSE: T) currently provides 1.5 megabit Wi-Fi speeds at Starbucks shops via a T1 line, CBS' CNET reports.

Level 3 has worked on projects that share many of the same technical features, but not one putting together the different elements for such a high-profile customer, said Anthony Christie, Level 3's chief marketing officer.

?This is a watershed deal for us,? he said. ?Not because this is something we?ve never done, but it showcases our ability to develop unique solutions on a scale that?s very different from our competitors.?

CNET analyst Shara Tibken writes that the faster service may draw mobile-device users with limited data plans who want to use fast Wi-Fi for data-gobbling services like downloading big files and streaming.

?Every day, our customers rely on the free Wi-Fi at Starbucks to study, work, connect with friends or just relax,? said Adam Brotman, chief digital officer at Starbucks. "We want to make sure that they can access the web effortlessly and quickly, no matter what they?re doing, or what device they are using."

Mark Harden directs print and digital news content for the Denver Business Journal and writes for the "Broadway & 17th" blog. Email: mharden@bizjournals.com. Phone: 303-803-9227.

Greg Avery covers tech, telecom, aerospace and bioscience for the Denver Business Journal and writes for the "Boosters, Bits & Bioscience" blog. Phone: 303-803-9222.

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