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 technologies. 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 utilizing 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 utilizing technology to support 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.