A woman prepares her drink in a Starbucks store in New York in this file photo from June 25, 2013. REUTERS/Brendan McDermid /Files ( BRENDAN MCDERMID )
Denver -- Tech giant Google and Colorado-based Level 3 Communications are replacing AT&T as the Internet service and network provider for Starbucks.
A multiyear deal, announced Wednesday, is intended to bolster speeds for the coffee chain's free Wi-Fi service by up to 10 times.
Level 3 will begin upgrading the network and related equipment in August. More than 7,000 Starbucks-owned stores will receive the higher speeds within 18 months.
"I would characterize it as more than an upgrade of what exists today because these stores are going to be completely refitted with a series of equipment and connectivity," Level 3 chief marketing officer Anthony Christie said in an interview Tuesday.
The faster speeds will be comparable to 4G LTE mobile broadband service, which averages from 5 megabits per second to 10 Mbps. The Wi-Fi service will feature Google's branding, and Level 3 will manage in-store connectivity.
Financial terms of the contract weren't disclosed.
Based on industry pricing, the deal could be worth $50 million a year for Level 3, according to estimates from D.A. Davidson & Co. telecom analyst Donna Jaegers.
"It could be big numbers," she said.
Because the company serves business clients, reaching retail consumers isn't as important for Level 3 as it is for Google. But Jaegers said with many Starbucks stores located in corporate office buildings, the deal will position Level 3 as the anchor network, allowing the company to potentially reach additional clients.
"The ability to upsell and cross-sell into a particular geographic location is core to our marketing strategy," Christie said, adding that the Starbucks contract stands on its own merits. "This is a prominent household brand that takes customer experience and everything having to do with that brand very seriously."
Starbucks and Google are also co-developing a Starbucks Digital Network.
"Every day, our customers rely on the free Wi-Fi at Starbucks to study, work, connect with friends or just relax," Starbucks chief digital officer Adam Brotman said in a statement. "We want to make sure that they can access the Web effortlessly and quickly no matter what they're doing or what device they are using."
Andy Vuong : 303-954-1209, avuong@denverpost.com or fb.com/byandyvuong
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