Telecom companies face a fierce competition from innovation based start-up companies, particularly those that are using internet networks to offer communication services through the voice and video over internet protocol (VoIP & PVoIP) technologies. More than 10 years have passed from the time the internet and VoIP were widely used, but still, telecom companies are having a great deal of business success through offering a wide spectrum of services, products, deals, and packages to consumers using both B2C and B2B models. The future landscape of how telecom companies will evolve in the market is still not clear, particularly with the increase of aggressive competition from companies that are technology-innovative and starting to deliver new forms of ubiquitous communication technology and services. Understanding why and how telecom companies innovate in the market is very crucial in order to predict the future of this business sector. In this paper, we argue that telecom companies are utilising their capabilities that have a significantly important role in fostering innovation, namely information technology (IT) capability and knowledge management (KM) capability. IT capabilities have changed dramatically in the last few years with the introduction of intelligent systems, big data analytics, the Internet of Things and the wide use of mobile apps and sensors. It is not clear how these technologies play a role in telecom companies’ innovation and it is not clear whether IT impacts innovation directly or if KM capability has a mediation role in utilising technology to support innovation. This paper is a position paper to establish grounds for understanding how telecom companies innovate, and in particular how IT and KM capabilities influence innovation. We outline the methodology of this investigation as a qualitative study with stakeholders from multiple telecom companies and we expect at the end of the study to be able to offer a holistic view on the way these companies innovate in regard to their products and services. We aim at providing a cross case studies comparison towards a prediction of the future of the telecom business sector.