Innovation dynamics and industry structure are considered to be strongly related. Highly vertically integrated industries exhibit a different innovation pattern than industries that are characterized by a horizontal open networked structure. In the utility industries the reform process has a major impact on industry structure and, hence, changes in the innovation pattern can be observed. As innovation is important for the continuous development of utility industries and their ability to meet public value objectives, it is important to understand the relationship between innovation, industry structure, and reform. Important in this analysis is to recognize the role of the underlying technological paradigm in guiding the development of an industry. This contribution explores the relationships for the telecommunications industry. The exploration is based on a longitudinal analysis.