Operations at Ringing Bells, the UP-based company that promised to deliver the world’s cheapest smartphone at Rs 251, have run into trouble even before it delivers its first device.
Despite receiving heavy bookings after unveiling the phone in February, the company has not been able to source phones at the promised sale price, thus being forced to sell them at a heavy loss of over Rs 900 per unit. This goes against the management’s earlier stance of making a profit of Rs 31 per phone.
Moreover, serious differences have cropped up at the management level, resulting in the departure of Ashok Chadha, who had been the face of the company since it unveiled its devices in February this year.
Sources said Chadha -who was introduced as the president of the company -had a “massive showdown” with promoter Mohit Goel “over financial matters”. “It is now Goel who now runs the company and Chadha does not play an active role,” an official said.
Calls made to Goel were not answered and there was no response to a questionnaire sent to an external spokesperson who represents the company. In a brief conversation over the telephone, Chadha said he was never employed by the company. “I was never working with Ringing Bells. I was always there as a consultant,” he said, adding that he will provide further details by next week.
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Sources said the company is facing massive problems with regards to funding of the project and procurement of devices.“The procurement cost per device is around Rs 1,200, which means there is a loss of around Rs 950 on each device,” a source said, adding that the company is looking at ways to bridge the deficit.
The company has withdrawn the much-touted Freedom 251 device from its website (http:www.ringingbells...in) and the flagship smartphone is not even on display. The other devices that the company displays on the website -Smart101 and Master and 4U feature phones -are also not open for sale. “We are sold out within 72 hours. Bookings will open soon,” says a message when you press the `Buy Now’ button. The source said the company is now trying to find investors who will be able to fund procurement plans.