I don’t get it. Entire city of Mountain View has free Wi-Fi. The New York City central park has free Wi-Fi. Almost every local coffee shop has it. So why at Starbucks one needs T-Mobile or AT&T subscription to connect to the Internet? Wi-Fi is something that is cheap and easy to set up, and I would expect the third place after home and office where Howard Schultz wants people to spend most time, to at least have free wireless connectivity.
Here’s some simple math to support my argument. AT&T charges $4.99 per month for basic Wi-Fi access. A cup of coffee at Starbucks is more than $4. Whatever deal Starbucks and AT&T have to let AT&T provide an exclusive service and the nominal Wi-Fi set-up cost which Starbucks will face to provide free Wi-Fi is pretty much mute if Starbucks is able to attract even a small number of additional customers who look for a local coffee shop where they can connect to Internet for free (instead of signing up with a service provider just to get Wi-Fi connectivity at Starbucks).
Yet another argument: Starbucks can ad power the Internet service and cut a deal with one of the search providers to make a particular search engine the default one while using Starbucks Wi-Fi, which can potentially make this “free” Wi-Fi service a money churning business. And now when Starbucks is facing competition from the likes of McDonald’s, providing free Internet access and making Starbucks attractive enough for customers to spend more time there is required more than ever before.
All this aside, I believe just going for free Wi-Fi will give Starbucks enough press blog coverage to provide that much required spark that might pull customers back to the coffee shop (something like the iPod touch announcement…) and make a statement that for Starbucks, customers still come first.