February 11th, 2008

Some Free Wi-Fi at Starbucks?

AT&T announced this morning together with Starbucks (but not T-Mobile) that they will offer a combination of free and paid Wi-Fi. It comes just a few days after Earthlink announced that they want to sell their Municipal Wi-Fi business.

First, the AT&T/Starbucks announcement is exciting for a lot of reasons. One of the inhibitors to growing subscriptions (besides demand for access outside of the office – but this is growing) has been footprint. Free trials help convert users into paying subscribers. It provides reach/coverage at a time when the market is still maturing – makes economic sense for both parties.

The Starbucks/Wayport/AT&T strategy is very different from the municipal one with which Earthlink has struggled and is now looking to sell. One one hand they look to provide a similar services – but whereas Earthlink was looking to build a cloud, AT&T/T-Mobile/Wayport built “spots” (okay, hotspots) that would be easy to find in well-known retail locations. Also, from the beginning (and give some credit to the guys at McDonald’s who originally thought some of these ideas through) they had a number of revenue streams lined up to pay for the service. Earthlink was looking to do the same, but seemed to be running into more challenges with the cities and their commitment to use (and help pay for the network).

Not in the release is the news that AT&T looks to be displacing T-Mobile. (A journalist told me this, but I haven’t seen it in the release).

This is also interesting, but a lot for one blog. The news comes just a few months after Apple announced free Wi-Fi service (at least for iTunes) for the iPhone. They included Starbucks in the announcement, but not T-Mobile. You have to wonder if open access for AT&T customers on their cell phones or portable media players with telephony capability (e.g., iPhone, Nokia 810) isn’t soon going to be part of this. Too many details missing so far to know all of the implications – in any case, you don’t have to own the network to use it or sell services on it.

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