The mobile phone company Ringing Bells could not have rung a bell for most people till recently. But on February 18, it put the mobile manufacturing industry into a tizzy by starting bookings for its latest offering, a smartphone called Freedom 251 with a 1.3 GHz processor and a host of other features, at a jaw-dropping Rs 251. It has since received around 75 lakh orders for what it calls the 'first phase' bookings. The phones are promised to be delivered to customers by April.
Ashok Chaddha, CEO of Ringing Bells, attributed the low price of the handset to the low cost of marketing and economies of scale. “We are making about Rs 31 profit on each handset,” he said. “We are setting up two manufacturing facilities, one in Noida and another in Uttarakhand. Once the local manufacturing takes off, we will improve profitability further.” He said the company had plans to invest about Rs 350 crore in these plants.
Though BJP leader Murli Manohar Joshi, MP, attended the phone's launch event in Delhi, he later said he did not know the company or its promoters. “They came to me to seek my blessings for the launch. From what I was told I believe it was a made in India phone and so I agreed,” said Joshi. The phone comes preinstalled with mobile apps of government programmes such as Digital India, Skill India and Swachh Bharat.
The prototypes the company had given, however, were made by the Chinese manufacturer Adcom. In fact, the brandname was covered with correction ink. But Chaddha said it was just a demo. “We are using Adcom demo phones, as our phone is going to have the same specifications. Only the final look may differ to ensure its cost advantage,” he said.
The company insists that there is no foul play. The tax authorities recently ran a check on the company and the findings are still awaited. “There is nothing to hide and we had shared all tax papers with the authorities,” said Mohit Goel, promoter of Ringing Bells.
SOME CUSTOMERS who booked the phone have complained of not hearing from the company after that, while some others said they did not get confirmation even after the money was debited. “I got a screen saying transaction unsuccessful, yet the amount got debited from my bank account. The company has asked me to wait till their payment validation process is cleared,” said Gautam Ashok of Delhi.
Phone manufacturers have disputed the claims of Ringing Bells before the government. “Theirs is an open and shut case. These are imported handsets, and their price after paying 11.5 per cent duty should be around $40 not $4,” said Pankaj Mohindroo, president of Indian Cellular Association, an industry lobby of mobile phone manufacturers. “A lot of small and medium producers will be affected if the government does not take action.”
On the insistence of the ICA and BJP leader Kirit Somaiya, MP, the government has launched two investigations—one by the department of electronics and information technology and the other by the department of telecommunications. “We have found that the phone manufacturer has no bundling deal with any of the operators,” said a telecom ministry spokesperson. “We are keeping a close watch.”