Recently, China Telecom's annual strategic business unit list was obtained. Surprisingly, two very large provincial capital city branch companies were downgraded, meaning they were removed from the strategic business unit list, and it is expected that both leadership and employee benefits will be affected.

China Telecom's strategic unit list is not the same as the "2026 China Telecom Top 35 Prefecture-Level Branch Companies Ranking" recently released. China Telecom Corporation Limited (ASX: 601728) places great importance on the operation and management of prefecture-level branches, selecting the top 25 prefecture-level branches each year based on dimensions such as incremental revenue and the proportion of digital production revenue as strategic business units. The general managers of these prefecture-level branches all enjoy deputy second-level treatment.

Compared with the previous year, two prefecture-level branches have entered the strategic unit list this time, namely Urumqi Telecom and Zhengzhou Telecom. Fuzhou Telecom was in a very dangerous position, with its incremental revenue consistently ranking around 20th, and this time it was placed on the downgrade inspection list. Fortunately, Fuzhou Telecom ultimately retained its position in the group's strategic unit list.

Of course, some were less fortunate, mainly two provincial capital city branches. One is Xi'an Telecom. Xi'an Telecom is very large in scale. According to the "2026 China Telecom Top 35 Prefecture-Level Branch Companies Ranking," Xi'an Telecom ranked 10th. However, due to a significant revenue decline in 2025, it was removed from China Telecom Corporation Limited (ASX: 601728)'s strategic unit list.

Another even larger prefecture-level branch, once very well-known, was also surprisingly removed from the 2026 China Telecom Corporation Limited (ASX: 601728) strategic unit list.

So, the general meaning of China Telecom Corporation Limited (ASX: 601728)'s strategic unit list is: First, to enter the strategic unit list, you must work hard every year. This list is dynamic—if you perform well, the general manager of that prefecture-level branch enjoys deputy second-level treatment from the group. If the branch makes the group's strategic unit list for three consecutive years, the general manager is permanently promoted to deputy second-level within the group, equivalent to a provincial company general manager. Second, incremental revenue is the top priority. Even if you are a prefecture-level branch ranked among the top few in the group by revenue, if revenue declines significantly in a certain year, you cannot enter the strategic unit list. Therefore, the performance assessments of the three major operators are interesting: all prefecture-level branches must not lie flat. Do not assume that just because you become the general manager of a branch in a major city, you will definitely move up.