Freedom 251 seller Ringing Bells paid Rs 3,600 apiece for handsets, says Adcom

In another twist, IT products firm Adcom today said that it sold mobile handsets to Ringing Bells for Rs 3,600 a unit and was unaware of its plans to resell the device at Rs 251.

Adcom also warned of legal action against Noida-based Ringing Bells in case the latter's activities adversely impact its brand name or cause any other kind of losses.

Ringing Bells had unveiled what is being touted as the world's cheapest smartphone. The devices, which were showcased resembled that of Adcom's Ikon 4, which is already available in the Indian market at Rs 3,999.

"Yes, it is true that although we sold the handsets to Ringing Bells earlier, like we sell Adcom mobiles to lakhs of users, we were absolutely unaware of the reselling plans of the company in question. Furthermore, we still haven't been able to evaluate their pricing policy, as we sold the handsets at Rs 3,600 per unit," Advantage Computers (Adcom) Founder and Chairman Sanjeev Bhatia said in a media statement.

He further added, "We are deeply grieved by this incident where our mobile phone has been presented to masses for Rs 251, and therefore, would not hesitate from taking any legal actions against the company, in case the entire fiasco impacts Adcom's brand name or subsequently we face any other kind of losses."

Telecom Minister Ravi Shankar Prasad had already said the government was monitoring Ringing Bells and would take action if it fails to deliver the Rs 251 handset.

Bhatia said he would like to assert that Adcom is in no way connected or linked to Ringing Bells or Freedom 251 and bears no responsibility whatsoever, in the whole swindle and regret the inconvenience caused to its customers from all over the country.

A new entrant in the flourishing Indian mobile handset market, Ringing Bells had unveiled what is being touted as the world's cheapest smartphone. However, concerns have been raised by the industry on feasibility of a 3G smartphone at such a low price.

Ringing Bells has said the manufacturing cost of the phone is about Rs 2,500, which will be recovered through a series of measures like economies of scale, innovative marketing, reduction in duties and creating an e-commerce marketplace.

The I-T Department is also looking into the financial structure of the company and has obtained documents, including those from the Registrar of Companies (RoC), in this regard.

A series of complaints were made to the Telecom Ministry against the company. Apart from BJP MP Kirit Somaiya, the Indian Cellular Association (representative of mobile handset manufacturers) had also approached the Ministry asking it to get into depth of the issue.

They said the price of the device with the said specifications could not be below Rs 3,500 even after a subsidised sale.

Despite controversies, Ringing Bells managed to received over six crore registrations in two days.