Freedom 251: Make in India blitz or a farce?

How can a phone which was bought for Rs 3600 be sold for Rs 251? Can Ringing Bell deliver on their tall promises? Or is the dream of the Rs 251 phone too good to be true? This is an India Today exclusive.

 

 

The makers of the much-hyped Freedom 251 smartphone claim that their incredibly low pricing is because they are taking advantage of new government initiatives like Make in India and Start Up India. The company, Ringing Bells, said that the Rs 251 smartphone will be a showcase for Make in India. But an India Today's Special Investigation has found out that the phone which Ringing Bells is projecting as its own was actually bought from a company in New Delhi's Kirti Nagar for Rs 3,600 a piece.

The Freedom 251 smartphone is possibly the most-hyped product launch in recent years. A stylish, sophisticated phone for Rs 250 is the kind of product that consumers can only dream about. But now a new player in the crowded telecom market is promising to go where no phone manufacturer has gone before. Ringing Bells promises a smartphone which can do what an Apple or a Samsung can, at a fraction of the cost. Soon after their glitzy launch, the management team of Ringing Bells was in the India Today studios talking about how indigenous manufacturing will help keep prices at rock bottom. 

During a sting operation, the president Ringing Bells Ashok Chadha said: "The phone is roughly at a cost of about Rs 2,200 to 2,300 depending upon how much quantity you procure. The answer to why we are selling it at Rs 251 is... a import duty hedge of about 13.5  per cent [as per Make in India]. There is an economics of scale. We are looking at a production when people want about a lakh [phones] a month. We are looking at multipliers of that, which is economic of scale in terms of production."

However,  the telecom industry reacted angrily to the claims being made by Ringing Bells. The Indian Cellular Association called the Freedom 251 a big joke. Founder and National President of Indian Cellular Association Pankaj Mohindroo said, "There is no way a phone can be sold so cheap. It's impossible."

India Today's Operation Freedom 251 Team first visited the Kirti Nagar offices of Advantage Communication (Adcom). Adcom is a manufacturer and distributor of mobile phones and tablets.  

ADCOM owner Sanjeev Bhatia confirmed that the phone which Ringing Bells was tomtomming on TV channels had actually been bought from his company and wasn't produced by Ringing Bells at all.

"We got an order after which we started manufacturing and delivered them the product. We have even received the payment for the order. Till three days before the launch, we had no clue about our phone being renamed as Freedom 251," said Bhatia.

When the investigation team confronted president of Ringing Bells, he was forced to admit that the phone was bought from another company. But he insisted that only the touch plate had been bought from ADCOM while the rest of the phone had been put together by Ringing Bells. 

"ADCOM has just manufactured the touch plate, rest all is ours," said Chadha.
 
However, this claim was also refuted by the ADCOM. Bhatia said, "It wasn't just one part, but the entire phone, which had been bought from ADCOM." 

According to Bhatia, Freedom 251 is actually Ikon 4, white. Bhatia says that Ringing Bells erased the brand name of Ikon 4 from the panel and placed their own sticker instead.

Bhatia's company is now also looking for legal option and is planning to sue Ringing Bells.

Ringing Bells had originally claimed that they will start selling the Freedom 251 phone in the market from the end of February.

Ringing Bells told India Today that the company had outsourced the task of assembling Freedom 251 to two production units near the national capital and one near Mumbai. These companies are Vie Technology and Eminence Technologies. The Ringing Bells management told us that they had already placed orders to produce 50 lakh units of the Rs 251 phone. The company claimed that all these phones will be sold in the market by June this year.   

When contacted Eminence Technologies director Nidhi Khullar said that it was only five days before the grand launch that Ringing Bells first approached them. 

Khullar said, "They launched the phone on February 17 and informed us only on February 11." Khullar also revealed that so far they had not received any green signal from Ringing Bells to start the assembly process. 

Prabhupreet Singh, the business head of Vie Technology also confirmed that so far production on the Rs 251 phone has not started. He said, "The average cost of assembling will come up to $30, but when it is inbuilt, the cost comes down. We were under this impression that the company is getting some kind of subsidy."  

Both the production units that are supposed to ship 50 lakh phones in 90 days say that work on assembling the phone has not even started. So far Ringing Bells has not defrauded any consumer. The company says it will take cash only on delivery. But the India Today investigation shows that consumers need to be be aware of some of the tall claims being made by the makers of Freedom 251.