A year back, a new smartphone company called Ringing Bells appeared out of the blue, and took the country by storm by launching the Cheapest Smartphone in the world at just Rs. 251/- (roughly $4) calling it ‘Freedom 251‘.
It is over 18 months now, and there is no sign of the Rs. 251/- smartphone. The company hasn’t been able to deliver on its promises and was declared bankrupt in late 2016.
In a new development, Noida Police on Sunday arrested two persons after Mohit Goel, the MD of Ringing Bells Pvt Ltd, which launched the Freedom 251 last year, filed an FIR against them for not delivering the Freedom 251 units even after taking advance payment from the company.
According to Goel, the MD, the two accused Vikas Sharma (35) and Jeetu (40), both residents of Delhi had taken the order from Ringing Bells along with Rs. 3.5 crores as advance against the delivery of 70,000 Freedom 251 handsets.
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No Support From Government
The company came out with advertisements in all leading national dailies in February last year and received over 70 million orders for the Freedom 251 handsets. The company had promised to deliver around 2.5 million handsets by June 2016.
According to Goel, he paid the duo (Vikas Sharma and Jeetu) around Rs. 3.5 crore and, in return, they cheated him. The duo siphoned off all the money and did not deliver a single phone.
Back in February 2017, some of the distributors had filed a case against Ringing Bells Pvt Ltd and their MD Mohit Goel was jailed for six months.
Goel has lamented that the government did not show any support nor came to his aid despite his commitment to ‘Make in India‘ and ‘Startup India‘ initiatives by providing a platform to deliver a smartphone for every Indian citizen.
Other Companies Copied The Sales Model?
Goel has alleged that the other Indian players in the industry like Karbonn, Lava & Micromax readily adopted the Freedom 251 sales model and are now offering smartphones as low as Rs 1,300/-.
The company’s President Ashok Chadha is still in jail and the company is looking at another opportunity to come clean and provide people with the promised handsets by March-April next year.
Currently, the company says, is not planning anything else, and will continue to focus on the Freedom 251 smartphone.
Freedom 251: The First 5000 Handsets
The company claims to have delivered the first 5000 handsets in July last year. They have also promised to deliver 65,000 more handsets to those who had booked the Freedom 251 devices through the cash-on-delivery (COD) mode.
Launched in February 2016, the company had plans to deliver 2.5 million handsets by June 2016. It received over 70 million orders, and the response was so overwhelming that the payment gateway crashed due to intense traffic.
It made a splash across the globe as being the world’s cheapest smartphone and almost every big media house summed it as a “miracle device”.
But that’s where the story ended.
The ‘Fraud’
After failing to deliver the promised handsets, MD Goel and President Chadda were arrested back in February this year after an FIR was filed by a Ghaziabad based distributor Ayam Enterprises. He alleged that the company defrauded them of Rs 16 lakh.
Allahabad High Court later granted bail to the MD Mohit Goel, but the company President, Ashok Chadda is still in the jail. A compromise was agreed upon between the parties involved in the legal case.
Reality Check: Is to Possible to Manufacture a Smartphone at Rs. 251?
The demo units of the Freedom 251 which were delivered, were actually dressed up Adcom Ikon 4s units developed by another Delhi based smartphone company. The handsets which were manufactured in China and Taiwan, were already available in the Indian market.
The breakdown of the phone had revealed that it would cost around Rs. 2400/- ($38) to make. It is not possible to manufacture a similar handset (with same specifications) in less than Rs. 1,500-2,000/-. And this is just the manufacturing cost. It doesn’t include overheads like marketing and logistics. So how can Ringing Bells sell a smartphone costing Rs. 1,500/- to make, at Rs. 251/-? The math just doesn’t add up.
So, if the company is planning to make good on their promise with Freedom 251, it will be interesting see how they go about it. There’s also the big question whether the Freedom 251 is relevant in a market where other players are offering smartphones at effective prices of Rs. 0/-.
Only time will tell.