Abstract:Through literatures summarization, this paper reveals the meaning of business model, and does in-depth analysis of business innovation of telecom business model based on the principal-agent perspective. Subsequently, under the framework of classic studies, it improves the principle’s objective function, and investigates intensively the combinative incentive and win-win contract design between a telecom operator and a service provider, then it also further explores the influences of value preference, and marginal output of the effort on contract parameters, performances and costs. Results show that the value preference parameter can coordinate the benefits between cooperators and control agency costs effectively, the marginal output of the effort affects the way of incentives