The makers of the world’s cheapest smartphone, Ringing Bells Freedom 251, which costs all of Rs 251, met telecom minister Ravi Shankar Prasad and other officials from the department of telecommunications on Monday to allay apprehensions regarding the pricing of their product.
The Ringing Bell representatives led by president Ashok Chadha reportedly told the minister that they have signed several cross agreements with software developers, app-makers, besides others engaged in marketing and production of smartphones, which will help them cross-subsidise the product. The first 50 lakh phones would be imported from China in SKD units and thereafter production in the country will be started in a phased manner.
The meeting and the assurance was in the context of a letter written by Indian Cellular Association, the mobile phone handset lobby, raising apprehensions regarding the pricing of the product. It had said that in view of the specifications as advertised, the pricing of the phone cannot be below Rs 3,500-3,800 per unit and had urged for government intervention.
“For your kind information, the bill of material value for a product like this when sourced from the cheapest supply chain cost about $40 (Rs 2,700),” Pankaj Mohindroo, national president of Indian Cellular Association, had written to Prasad. He added that the cost would be at least Rs 4,100 when retail margins and taxes are added.
Ringing Bells’ officials also told the minister they would deposit the money collected through orders for the phones in an escrow account. They claimed a profit of Rs 31 from each phone, even after selling at Rs 251.