Increase the number of telnet sessions allowed :

The number of telnet sessions allowed is limited to 60 by default and it is controlled by xinetd. You can check it from /etc/xinetd.conf file on the server.
A default /etc/xinetd.conf file will be as per given below;

==================================
cat /etc/xinetd.conf
#
# Simple configuration file for xinetd
#
# Some defaults, and include /etc/xinetd.d/

defaults
{
instances               = 60
log_type                = SYSLOG authpriv
log_on_success          = HOST PID
log_on_failure          = HOST
cps                     = 25 30
}

includedir /etc/xinetd.d
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In case you want to increase those sessions you will have to modify the line

instances               = 60

Put any number instaed of 60 say 100 and save the file.

instances               = 100

After any modification done in this file, you will have to restart the xinetd services.

# service xinetd restart