T-Mobile to Sue over Free Coffee House WiFi

(09 Jun 2008, BWCS Staff)

In an action that will have AT&T execs spluttering their cappuccinos and choking on their pastries, T-Mobile USA has announced it is to sue the Starbucks coffee house chain for breach of contract by allowing AT&T to provide customers with free Wi-Fi access in its cafes.

The outraged mobile operator alleges in the suit that it filed at the New York State Supreme Court in Manhattan, that Starbucks developed its free-offer plan with AT&T in secret. This was despite the coffee house's existing and exclusive contract with T-Mobile USA. The German-owned company is said to be seeking unspecified damages over claims that Starbucks broke an agreement over how the WiFi service should be transferred from T-Mobile to AT&T.

In February of this year, Starbucks announced that it planned to tear up its previous WiFi agreement - first made with MobileStar then with T-Mobile - and that it would switch to AT&T. The move wiped out 7,000 of T-Mobile's 9,000 WiFi locations and transformed AT&T from a hotspot provider chiefly involved with McDonald's restaurants, plus some hotels and airports to a relative giant with over 17,000 hotspot locations across the US. It also meant that AT&T's broadband customer base of 17 million business and residential users will gain up to two hours free access to WiFi at the coffee house chain.

The history of WiFi in Starbucks has been checkered to say the least. At first the deal to put hotspots into every café was hailed as a breakthrough in the WiFi market and seemed to herald an era where W-Lan hotspots could come to challenge mobile networks for a large section of the wireless data market.

However, in April 2003, whilst partnered with T-Mobile, Starbucks shocked the WiFi industry when it let slip that an average hotspot outlet was attracting a mere 17 users per week. Since then the popular coffee house chain has not divulged usage figures but has continually emphasised how fast its service is gaining in popularity.


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