Starbucks Reports Sharp Increase In Quarterly Profits

SEATTLE (CBSDFW.COM/AP) – Starbucks said Wednesday that it has reached a deal with Google, allowing the coffee shop locations to offer their customers dramatically faster Wi-Fi service. Financial terms were not disclosed.

Starting in August, new U.S. company-operated Starbucks stores will begin to receive network and Wi-Fi speeds up to 10 times faster than what is currently capable with the service offered by Dallas-based AT&T. Over the next 18 months, Starbucks will convert more than 7,000 existing U.S. stores to the upgraded service.

Starbucks said that the improvements will help ensure that its customers can easily access the internet. Starbucks and Google also plan to work together to co-develop the next generation of the coffee house company’s digital network. “This is obviously an important milestone in our relationship with Google,” Adam Brotman, chief digital officer for Starbucks, told CNET. “We do hope this is one step amongst many that we can continue to build upon what’s already a great partnership with Google.”

Starbucks stores currently offer internet speeds of up to 1.5 megabits, CNET reported. The upgraded speeds will vary from one location to another. “When you start getting to really, really fast speeds,” Brotman explained, “it’s difficult to put it in the same way everywhere.” Level 3 Communications will upgrade existing Wi-Fi devices and manage connectivity in more than 7,000 company-owned stores.

Brotman told CNET that Starbucks was not necessarily looking to cut ties with AT&T, but that the company had been in talks with Google for some time, looking for a partnership that made sense.

Fast and free Wi-Fi connections have already been a popular draw for Starbucks stores nationwide, and that is likely to increase as mobile phone and tablet users move away from unlimited data plans or struggle to download video and music with throttled data speeds. “We’re moving to much more of a streaming world across all media types,” Brotman said. “This increased bandwidth will match what consumers are doing on the web today, whether downloading or streaming or both.”

AT&T spokesman Mark Siegel told CNET, “Starbucks continues to be an important partner for us, and we continue to provide them with a variety of services over AT&T’s advanced network.”

(©2013 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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