T-Mobile Not Happy About Starbucks-AT&T Wi-Fi Deal

Starbucks has announced a new plan for wireless Internet access in its stores. The company has dropped its old service provider, T-Mobile, in favour of AT&T in a bid to tie free wireless with prepaid coffee cards.

The deal is lucrative for the new Internet provider. AT&T benefited by being allowed to send several promotional emails per year to Starbucks subscribers, is guaranteed to be the only provider for all Starbucks locations and gets to promote free Internet access at Starbucks locations to current AT&T customers.

T-Mobile is less than happy with this new partnership. Within days of the announcement of the new scheme, Starbucks' former service provider had filed a complained in the New York State Supreme Court, accusing the coffee giant of unlawfully edging it out of the remainder of its contract. (Source: cnet.com)

According to T-Mobile, it had the right to continue to "'sell, market, and promote,' its services in Starbucks stores up until the stores were completely transitioned to AT&T's system." The company is complaining AT&T is using T-Mobile's hardware still in U.S. Starbucks locations to supply customers with Internet access, when it should be using its own lines and equipment. (Source: pcworld.com)

Lawsuits usually result when deals between business giants go sour, so it's no surprise that T-Mobile has filed a suit. T-Mobile's wireless deal with Starbucks was a financial dream. However, AT&T's deal, from a consumer point of view, is certainly the better one.

Previously, consumers had to pay steep hourly or monthly rates, whereas the new deal allows us to get free access with a $5 minimum coffee card. Assuming that you have to make a purchase anyway, the deal is much sweeter.

It remains to be seen if T-Mobile's suit will come to anything. Most customers will probably not care, though, and be content to sip their java and use their two free hours of Internet a day.