China Telecom reorganizes subsidiaries (China)

China’s largest fixed-line telecom operator China Telecom said that its extraordinary general meeting has approved the proposed scheme to absorb 20 wholly-owned subsidiaries of the company this month.

The transformation of subsidiaries into branches by China Telecom is part of the preparation for telecom industry reshuffle and company transformation, noted Chen Yunhong, analyst with Guojin Securities.

China Telecom is transforming itself from a mere internet service provider to a comprehensive information provider, which needs a highly effective corporate structure to implement integrated company strategies such as brand buildup and information application.

Absorption of subsidiaries will also give China Telecom a bigger play for scale effect, in terms of integrated procurement for example, analysts say.

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