Why is the validity of a month reduced to 28 days when there are 30 days in a month? How are companies making extra money from customers?
Telecom companies like Airtel, Jio, and Vodafone-Idea have cleverly reduced the validity of a monthly recharge to 28 days. This raises the question among mobile users as to why this is the case.
At first glance, it seems like a calculated trick or deception against users. However, there is a well-thought-out mathematical model behind this decision. The formula of 28 days is beneficial for companies as an average month is considered to be 30 days.
When telecom companies offer customers a 28-day recharge option, it leads to questions about whether they are deceiving them. The answer is no. In fact, companies clearly state the validity period for all their recharge plans.
However, they do play with consumer psychology. If you divide a year, which is 365 days, by the companies' 28-day cycle, it results in a specific outcome. If companies offered a 30-day plan, you would recharge 12 times a year.
But due to the 28-day plan, there are 2 or 3 days left each month. These leftover days accumulate by the end of the year, resulting in a full extra month of recharge. Thus, you end up recharging 13 times a year instead of 12.
Companies earn an extra month's revenue from each customer without any additional effort. When questioned about the 28-day formula, companies provided a somewhat technical argument. They stated that not all calendar months are equal; some months have 31 days, some have 30, and February has 28 or 29 days.
To keep the prepaid system automatic and fixed, they chose a standard cycle of 28 days that fits every month without any changes. Has any action been taken on this issue? In response to customer dissatisfaction, the country's telecom regulator, the Telecom Regulatory Authority of India, has taken a strict stance.
According to the regulator's orders, all telecom companies, including Jio, Airtel, and Vodafone-Idea, are now required to have at least one plan in their portfolio with a validity of a full 30 days. Additionally, they must offer a calendar month plan that renews on the same date each month (for example, if recharged on the 15th, the next recharge will also be on the 15th of the next month, regardless of whether the month has 31 or 28 days).
The government is also continuously pressuring companies to promote these 30-day plans prominently so that customers receive accurate information and options. Despite this, companies still sell the 28-day plans the most, as they appear cheaper.
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