Last week, Starbucks announced that it was dropping T-Mobile, in favor of AT&T, as the Wi-Fi provider for more than 7,000 of its US locations. Along with the change of vendors comes some pricing changes — AT&T DSL and fiber customers will get free access at Starbucks, while anybody that uses a Starbucks stored-value card and spends at least $5 a month will get 2 hours of free service per day. That’s quite a change from T-Mobile’s $6 per hour/$10 per day/$30 per month.
I’ve long argued that Starbucks should free up its Wi-Fi, and stick to the business of selling coffee and all the other stuff they’ve got, and this move is certainly a big step towards that. But it’s also a nod to the realization that the paid Wi-Fi model is, for the most part, doomed by the rise of cheap 3G data service. The small number of people who pay for Wi-Fi will see little reason to keep paying for it when they can get real mobile data service for roughly the same cost, or less. (Sure, some paid hotspots in premium locations will continue to exist and even thrive, like overpriced airport food.)
I’ll be optimistic and say that this thinking played at least some role in AT&T and Starbucks’ strategy, though at $60/month, AT&T’s own 3G data plan for laptops probably remains a little pricey to be hurting too many paid Wi-Fi services just yet. But the point is that the day of cheap, ubiquitous mobile connections for laptops for anybody who wants them is coming, and is coming fairly quickly.
There’s this pub / bar in Munich called “Puck”, where Russell and I met some time ago. It’s located next to the university, and used to offer free WiFi.
The students loved it, in fact so much they used to spend their entire day in what you could describe as a “Wired Bohemian” workspace
Nice, but economically unsound for Puck, who now have reverted to paid WiFi.
Personally, I think the solution is fairly simple: add a 1 hour access voucher with code to every sold Cappuccino, and everyone is happy. Not?
By excluding the availability of WiFi in your stores you are ultimately excluding potential profits.
What is the point in charging for WiFi or only letting ATT customers use it for free. This only limits you to other people who want a cup of coffee coming in and instead opting for Caribou’s FREE WiFi or Panera Bread’s FREE WiFi.
A long time ago I learned by placing exclusions on your offerings you were actually excluding potential profits. I simply don’t understand this marketing campaign.
Some of us have been hanging around in coffee shops doing user interviews lately. When working out which one, there was some discussion of sufficient power and WiFi. As I’m one of those who went with the aircard (for years now) I said to not worry about it. I even share the connection with the co-workers over a private WiFi network.
I also find that any sufficiently dense area will very often have free, open wifi bleed into neighboring stores. I’ve gotten free WiFi in Starbucks, by using someone else’s network instead.
Paid WiFi has been lame and dated for several years now.