What are the real mistakes done by Bharti Airtel and Vodafone's idea? How did this goof-up make can be controlled earlier?

While a lot of the problems at Bharti and Vodafone are being blamed on Reliance Jio, the problems have been compounding for the last 15 years on a consistent basis. Here are some of the problems that brought these telecom companies to this state.

· AGR charges were always payable and the two telcos were only playing on some legal wordplay to avoid paying the charges. Ideally, both the telecom companies should have made these contingency provisions well in advance.

· Between the year 2005 and 2019, the profits of Bharti have been virtually stagnant. That means the growth in top line has been purely driven by higher debt. Debt is up nearly 10 fold during this period.

· Both Vodafone idea and Bharti had racked up debt in excess of Rs.1 trillion, which was just not manageable. When the price war started, they just could not operationally sustain this level of debt.

· Telecom companies paid heavily for spectrum to the government of India and this impacted their long term profitability. These telcos have reached an extent where they do not have funds to invest in infrastructure.

· Specific decisions along the way proved wrong. At the peak of the bull rally in 2007, Bharti Airtel acquired Zain of South Africa which added substantially to its debt and its asset base. Like Tata Motors, Tata Steel and Hindalco; Bharti also struggled to integrate its global acquisition.

· Finally, the price war was the trigger for this crisis. Jio, with its deep pockets managed to bleed both the telecom companies dry by adopting a loss-leader strategy. Today, it is going to be difficult for Bharti and Vodafone to sustain even with a 15% tariff hike.

In short, these two telcos only have themselves to blame. It is just that they never expected that Jio would drastically disrupt the industry.