The telecom mess

If the sector turns into a duopoly (ignoring the struggling BSNL-MTNL combine for the moment), Airtel and Jio will find it hard to absorb the 300-million-plus VIL customers who will have to be ported.

As of the time of writing, the mess in the telecom sector shows no sign of resolution, despite meetings between promoters and ministers. Consider a few of the scenarios that may pan out. Vodafone-Idea (VIL) is effectively being driven bankrupt, and it will probably shut down if the adjusted gross revenue (AGR) demand is not waived, or cut very substantially. Even if the AGR is waived or reduced, the company may already be too financially damaged to survive in the long run.

Bharti Airtel can find the financial resources to pay the AGR demand. But finances will be very stretched