Google, Level 3 replace AT&T as Starbucks' Internet provider

Google (Nasdaq: GOOG) and Level 3 Communications (NYSE: LVLT) are taking over AT&T's (NYSE: T) role as the backbone providers supporting coffee chain Starbucks' in-store Wi-Fi service.

Starbucks said the new agreement will enable them to deliver network and Wi-Fi connection speeds "up to 10 times faster" to consumers who shop in their retail stores. Similar to a LTE-based mobile wireless service, the new network will deliver speeds ranging from 5-10 Mbps.

Set to serve over 7,000 U.S. stores, Level 3 will begin upgrading Starbuck's network and install related Wi-Fi equipment in a number of locations in Colorado and other states.

Under the terms of the agreement, the Wi-Fi will be branded as a Google service while Level 3 will manage network connectivity in each store.

Although the companies did not reveal financial terms of the contract, D.A. Davidson & Co. telecom analyst Donna Jaegers said in a Denver Post article that it could be worth an estimated $50 million for Level 3.

Level 3 does not sell services directly to consumers, but Jaegers said that the added benefit is that since many Starbucks are located in office buildings and strip malls, the coffee shops could attract new business clients with their suite of IP-based data and voice services. 

As part of the agreement, Starbucks and Google will also jointly develop the next-gen Starbucks Digital Network.

Adam Brotman, chief digital officer of Starbucks said in a release that the goal of the Digital Network is to enable any of its customers to access the Web easily over its Wi-Fi network. 

For more:
- see the release
- The Denver Post has this article

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