DALLAS - AT&T Inc. will supply Starbucks Corp. stores with wireless Internet access, replacing T-Mobile USA Inc., and offer the service free to about 12 million of its residential online customers.
The service, using Wi-Fi technology, will be available in more than 7,000 US Starbucks stores by the end of 2008, with the first locations available in the next few months, AT&T spokesman Michael Coe said. AT&T, the biggest US phone company, will allow T-Mobile customers to access the network.
AT&T, which competes with cable providers such as Comcast Corp. for home Internet users, aims to lure more subscribers with the offer of free wireless access in restaurants and stores. Starbucks, which ousted its chief executive officer last month, wanted to give more customers online access, said Chris Bruzzo, the Seattle-based chain's chief technology officer.
"We've been talking here for the last month about making sure we focus on customers and deliver for them on that core experience," Bruzzo said.
Starbucks chairman Howard Schultz returned as chief executive in January, vowing to introduce more products and clean up aging stores after visits dropped and McDonald's Corp. promoted its coffee drinks. Internet customer growth at AT&T has also slowed, with more than half of US homes already using high-speed service.
AT&T rose 50 cents to $36.87 on the New York Stock Exchange. Starbucks, the world's largest chain of coffee shops, climbed 26 cents to $18.52 on the Nasdaq.
Customers who use a prepaid Starbucks card will get two hours of free wireless access each day. Others can buy two hours of access for $3.99 or subscribe for unlimited access to all of AT&T's wireless locations, including McDonald's restaurants, for $19.99 a month. About 9,000 of McDonald's 14,000 US locations have wireless Internet access, McDonald's spokesman William Whitman said.
Starbucks and AT&T didn't disclose the financial terms of their relationship.
Under the deal, AT&T will continue a decade-old agreement to provide other Internet services to Starbucks, such as connecting its sales registers to its network, the companies said yesterday.
AT&T residential high-speed Internet subscriptions grew by 1.8 million, or 18 percent, in 2007. That was down from annualized growth of 20 percent in the third quarter of last year.