AT&T’s de la Vega confirms glorious payment failure

Way back in December 2010, when AT&T, Verizon, and T-Mobile had just announced their mobile payment joint venture (then called Isis), I participated in a panel discussion which then led to a post on this blog that I titled “Glorious Failure.”

That post included this observation:

I responded by explaining that Isis is a perfect example of Big Bell Dogma. Carriers think they can do a better job than Visa, Mastercard, American Express, and others in the payments ecosystem, so they invest billions to try to replicate capabilities and compete with existing players rather than focusing on what carriers actually do well and enabling the existing players and nimble startups to leverage the carrier’s infrastructure to bring real value to consumers. Carriers have been trying to do that for over a hundred years in different industries. Sometimes they get lucky and succeed, but most of the time it’s a miserable failure.

That’s when Jim corrected me and said “it’s not a miserable failure, it’s a glorious failure.” The billions they invest may not actually generate financial returns for the participating carriers, but it will help put in place (either directly or by spurring competition) infrastructure (e.g. near field communications point of sale terminals) and standards (cross-carrier NFC standards) that Sprint and the payments ecosystem will benefit from.

I’ve got to admit – he’s got a point there.

Last month, Ralph de la Vega, CEO of AT&T’s mobile business, commented on that glorious failure. He said that mobile payments “seems like a more natural fit for [an] OS manufacturer.” Carriers have proven time and again that they can’t innovate fast enough. Google, Apple, and startups are where innovation happens. Carriers can help enable it, but shouldn’t try to control it.

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