Abstract Modern telecommunications constitute a major segment of the wider information and communications technology sector, a hybrid sector created by the convergence of telecommunications, computing and office systems. The new telecommunications era has been spawned by three major forces: a radical technological shift associated with the ‘digital revolution’, the quickening pace of deregulation and the growth of global markets. This paper examines the contention that telecommunications will redefine the parameters of competitive advantage, for cities and regions on the one hand and for industries and firms on the other. A key conclusion of this paper is that, while telecommunications does have the potential to deliver certain competitive advantages, the realisation of this potential is dependent upon a series of contingent factors. At the corporate level, the growing concentration and integration of communication networks within and between large firms betoken new threats for smaller and less powerful firms. At the city and regional level, while telecommunications offers hitherto unavailable opportunities for overcoming major developmental barriers, the technical possibilities will count for nought unless they are integrated into a regional innovation strategy which is attuned to local circumstance and alive to the social and organisational structures through which technology is deployed.