This study aimed to establish that innovation is a major axis that supports the competitive advantage of telecommunications companies, enabling them to launch innovative products and services that meet and exceed customer expectations. It helps improve the quality of services, reduce costs, and exploit new market opportunities, such as new generation networks. Innovation also enhances flexibility and adaptability, which prepares companies to effectively meet market challenges. The study included a random sample of employees of Palestinian telecommunications companies out of 3,000 employees. The sample size was determined at 341 employees based on a previous study, and 350 questionnaires were distributed, of which 341 questionnaires were collected suitable for statistical analysis. The study shows that there is a weak positive relationship between innovation in self-risk and competitive advantage with a rate of 0.488. The relationship between innovation in product, process, and technology with competitive advantage is considered weak and positive. This study analyzes the impact of innovation in different dimensions (product, process, and technology) and intrinsic risk on companies' competitive advantage. It was found that product innovation contributes 6.1% to competitive advantage, process innovation explains 18.2% of it, technological innovation accounts for 23.3%, while self-risk innovation explains 23.8% of competitive advantage. The results show the importance of each of these dimensions in enhancing the competitive advantage of companies to varying degrees. The researchers recommend encouraging a culture of innovation, increasing investment in research and development, and building partnerships with academic and technological institutions to enhance the competitive advantage of Palestinian telecommunications companies. They also emphasize the importance of improving technological infrastructure and developing team skills to support creativity and sustainable innovation.