Ralph de la Vega, president and CEO of AT&T Mobile and Business Solutions, is undecided as to whether Google’s Project Fi will be a full-blooded rival, or just an innovation model, the executive told Forbes.

“It isn’t obvious to us whether this is a noble attempt to have the market do something different or whether they really want to make an investment and have that be one of their core businesses,” said de la Vega (pictured).

The executive also admitted that mobile payments “seems like a more natural fit for the OS manufacturer” than for operators, following the failure of Softcard.

Project Fi
Google unveiled its much anticipated mobile service for the US in April, partnering with Sprint and T-Mobile on an initiative called Project Fi. Among the claims for the new service is seamless switching between WiFi and LTE technology.

The MVNO service will only be available at launch via Google’s own Nexus 6 Android device using a custom designed SIM. There is no word yet on an official launch date but Google has been encouraging people to sign up online.

The AT&T executive does not underrate his new rival. “We are very respectful of what Google does,” he said. “They have some very innovative ideas. Whether this concept will have scale, it has yet to be seen.”

All the time the service is only available to Nexus 6 users, it lacks scale. A wider deployment would make it a more serious contender for the incumbents. “We are going to watch what they’re doing and see how customers react to it,” de la Vega said.

All paid out?
On the subject of mobile commerce, the AT&T executive admitted that the US operator industry had failed to break into mobile payments, although he argued many of their goals had been achieved. AT&T, Verizon Wireless and T-Mobile US combined on a joint venture called Isis (later Softcard), that was closed earlier this year with certain assets transferred to Google; another example of operators crossing paths with the search giant. The operators also struck a distribution deal with Google for its payment service.

“In the end, we thought we’re probably better off not investing more money in this space,” De La Vega said.

The operators wanted to “energise” the payments market and ensure that NFC became a standard. Both appear to be happening with the launch of Apple Pay. Ironically, the launch of Apple Pay seems to have sounded the death knell for Softcard.

Mobile payments fitted better for a handset vendor, said de la Vega. “It seems like a more natural fit for the OS manufacturer doing those kinds of things. We decided to focus on another part of the business and not continue on the mobile payments area.”