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India cannot afford to squeeze its telecom companies out of existence

Vodafone Idea, Reliance Jio and Airtel are all suffering from regulatory rent-seeking

| India
The cause of the financial stress for India's telecom sector is a race-to-the-bottom pricing war unleashed by Reliance Jio.   © NurPhoto/Getty Images

In August 2018, struggling telecom companies Vodafone India, a subsidiary of British Vodafone, and local operator Idea Cellular merged their businesses to create the country's largest telecom company by subscribers and revenue. But the financial health of the merged entity kept on deteriorating.

Now, Vodafone Idea is on the verge of failing as losses mount, debt grows heavy and an adverse court ruling on what counts as revenue gives no relief. It is not alone. Other telecom companies are also fighting financial stress.

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