Starbucks serves up access

Starbucks Corp. plans to serve up high-speed wireless LAN access to its customers in all 3,000 of its North American outlets, betting that access to the technology will drive traffic into its coffee shops during off-peak postbreakfast hours.

Giving customers the ability to access a 10Mbps wireless LAN while enjoying a cup of coffee on a comfortable couch “will increase traffic outside the morning hours,” said Darren Huston, senior vice-president for new ventures at Seattle-based Starbucks. He noted that the company currently does 80 per cent of its business in the morning.

Starbucks customers pushed the company to provide some type of access, Huston said, and after studying several technologies, it opted for wireless LAN. Huston said wireless LANs provide a higher-speed connection than those that are provided now or that are likely to be provided in the future by cellular phone carriers. He said he expects early users of the service to include “road warriors who don’t want to check their e-mail [in a hotel] from a 28.8K connection.”

MobileStar Network Corp. in Richardson, Tex. will install industry-standard 802.11B wireless radios and antennae in Starbucks stores, with the first installations to be completed this spring, probably in the Pacific Northwest, Huston said. “We will aggressively roll it out [to all North American outlets] over the next two to three years,” he added.

Alan Reiter, an analyst at Wireless Internet and Mobile Computing in Chevy Chase, Md., said Starbucks’ widespread use of wireless LANs will help resolve the chicken-and-egg problem that’s faced by any new technology. “This can only help [the adoption] of wireless LANs because of economies of scale, which means more products and more competition,” Reiter said.

Starbucks is weighing several options to drive adoption of wireless LAN technology, Huston said, including the sale of wireless modem cards in stores “if it does not interfere with the coffee experience.”

Starbucks has also started preliminary discussions with major laptop computer manufacturers to provide “incentives” for the purchase of wireless LAN devices, Huston said. He declined to provide further details, however.

Mark Goode, president and CEO of MobileStar, said the company has configured its wireless network for business users, with built-in support for virtual private networks (VPN). “VPN is the fundamental driver of our network architecture,” Goode said. “From the point of view of the VPN, the MobileStar connection is just another LAN with an IP [address].”

Starbucks customers will pay for access based on MobileStar’s standard network fees, which range from US$2.50 for 15 minutes of access to monthly rate plans priced at US$15.95 for 200 minutes, US$34.95 for 500 minutes and US$59.95 for unlimited access. MobileStar plans to initially install one wireless LAN radio in each Starbucks shop. One LAN can “support 20 to 40 users at a time . . . and we believe that exceeds the seating capacity of most Starbucks restaurants,” Goode said.

Customers will access the MobileStar network through a portal that Microsoft Corp. is developing for Starbucks on its MSN on-line service. Access to that portal carries no charge, but once customers surf beyond that or go to check their e-mail, they will either have to enter a MobileStar user number or sign up on-line, a MobileStar spokesman said.

Tim Scannell, an analyst at Mobile Insights Inc. in Quincy, Mass., said Starbucks has positioned itself too far ahead of the technology curve with the wireless LAN deal. “How many people have a wireless modem today? This is too early and too soon,” he said.