This paper discusses the evolution of telecommunication industrial value chain(TIVC), analyzes the influence of technical innovation and customer demand on TIVC, and establishes the model. The appearance of the circuit switching technology and packet switching technology together with the diversity of the demand of customers change the structure of TIVC,causing vibration in value creation and distribution systems. With changes of the TIVC,enterprises in the chain will accordingly alter their business models, products (services) and the internal organizational structures. All these changes will lead to the reconstruction and optimization of the TIVC, and consequently, promote the development of the telecommunication industry.