New Delhi: After the launch of the cheapest smartphone in India, there is widespread scepticism surrounding the jaw dropping price of Freedom 251. Mohit Goel, who launched the phone, faced visits by police and income tax officials at his office and lot more. But he claims that he not only will deliver the phones at the price he has quoted, but the company will also earn a profit of Rs 31 on each handset sold.
In an exclusive interview with TOI the director of Ringing Bells asked "Why am I being hounded? What wrong have I done?" Goel also insisted that his new venture is not a fly-by-night operation and will begin customer deliveries from April 15. "Has there ever been a case of income-tax evasion against me or my company, or has there been an FIR filed against me in any police station? Why am I being called a 'bhagora' (who'll run away with the money)? I intend to do a valid business, just like any other startup, and I have a business plan ready."
The company claims that since it started accepting applications on February 18 it has received over 7 crore registrations on its website. "We are taking online bookings for only 25 lakh units in the first batch due to limited supplies, while giving another 25 lakh through offline distributors. I will deliver the handsets before June 30. All the money that we receive from customers through the payment gateway will be kept in an escrow account and we will touch it only when we deliver the devices." The company has an account with ICICI Bank.
Goel and Ashok Chadha, who is the president of the company, insisted that there have not been any infringements on design and other matters. "Some of the devices had the Adcom branding as we sourced panel (screen) from them. However, the final device will have our branding and the phone will have the same features and design that we had showcased."
When asked how does he bring down the cost to Rs 251 while also making a profit, Chadha replied "Economies of scale gets it down to around Rs 1,200, and thereafter an online sales model cuts down marketing and sales expenses, giving us further savings," he says. And to this we will add marketing piggybacks from companies whose applications we load on the devices. We will save around Rs 300 per device more through this."
On February 17 after the launch of Freedom 251 there was a lot of excitement among handset suppliers, which then lead the industrial body Indian Cellular Association to file a complaint with the government. ICA is members with Samsung, Sony, Apple, Lava, Karbonn, Micromax, Motorola and HTC. Pankaj Mohindroo, ICA president, wrote a letter to telecom minister Ravi Shankar Prasad, expressing doubts about the price of Ringing Bells, saying it is not possible to supply a phone for Rs 251.
The company is also talking to various e-commerce companies, such as travel website Goibibo, to get their apps on the devices. "We will also monetize from the heavy traffic on our website and will make it into a marketplace for other brands to hop on. This will also help us to bring down the cost."