Mohit Goel, CEO of Noida-based cellular phone firm, told dna his company would ship two lakh handsets from June 30. The company had received a staggering 7.5 crore order for its Freedom251 immediately after it was launched early this year. This had led to its payment gateways crashing.
Goel, whose Ringing Bells had come under the scanner of the police, telecom ministry, Enforcement Directorate and Income Tax departmenton charges of fraud, said his company would be taking a hit of Rs 180 on every unit that would be shipped at the price of Rs 251.
“We have tied up with 12-13 apps to subsidise the cost of the handset. That way we were expecting to be profitable but that is not the case. We are currently suffering a loss of Rs 180 per piece,” he told dna.
Goel is looking to build scale to turn profitable. And if he failed at that too then he will be approach the government.
“Slowly, we will convert the Rs 180 loss on each piece to profit but if that does not happen then the government should help a little bit,” he said.
Goel said he had not approached the government till now because he wanted to prove his mettle by keeping his commitment of producing the world’s cheapest phone.
“We wanted to first prove our mettle before approaching the government. Yes we are a small company but we can make phones at Rs 251. First, we will deliver the phone and then we will try to connect with (Prime Minister Narendra) Modiji. If he gives us his valuable time then we will be very lucky,” he said.
The controversial phone maker put in his request for a meeting with the prime minister ten days back; “We had put in a request to meet him (Modi) ten days back but there has been no response as yet”.
He said the cheap smartphone would augur well for the government’s Digital India programme.
“Today, 70 crore or more than 50% of Indians don’t have smart phones. In America, the number of people who don’t have smartphones is only 0.03%; it is 1% in Australia. So, how will India become digital? It won’t become digital only by talking, it will have to act on it too,” he said.
According to him, India can easily become a hub of cheapest phones in the world. The handsets to be shipped on Thursday is assembled at a plant in Hardwar in Uttarakhand with imported semi-knocked down phones and local batteries.
Goel said Ringing Bells will be soon be coming out with 10 more handset models in the price range of Rs700 and Rs5,500 with 5 inch and 5.5 inch display screens.
On how the investigations by various agencies was progressing, he said; “That (ED) investigation is over. The ED had asked us for documents. We gave them full support. They are satisfied with the documents. We have not paid any bribe to anybody. We have not done any illegal activity. I have been doing business since last ten years and there has been no case against me, no FIR. I have been paying all my taxes. There are no issues. We have given full support to ED and I-T,” he said.
Industry players, however, still felt that Goel was a “complete fraud”.
“He is a complete fraud. We will take action when we have to take action. If you have to get hold of these kind of people you have change the Consumer Protection Act. These are product ponzi schemes,” said a senior official from telecom industry, who did not want to be named.
He believes the “bare cost” of producing a smartphone with the specs mentioned for the Freedom251 was Rs 2,300 a unit.
K Krishna Kumar, a Bangalore-based telecom executive, saw the Freedom251 pricing as a “marketing gimmick”.
“This is only a marketing gimmick to get the attention of people. Then, once you start selling volumes in the higher end products that profit will actually help him recover the losses (made on Freedom251),” he said.
Krishna Kumar also feels that pricing of phones also depend on the quality of the component.