Business model transformation is emerging as one of the key drivers of future value for telecommunications (telecom) providers. This is a change from 2006, when telecom executives in the IBM CEO Study 2006 placed less emphasis on business model innovation, concentrating instead on products and services innovation. Business model transformation will demand new, very significant distinctive capabilities. Therein lies perhaps the industry's greatest challenge: 2007 Telecom Industry Survey respondents still point to traditional sources of competitive advantage rather than some of the newer dimensions that will determine success in the markets they are now entering.