Probe finds smartphone to cost Rs 2,300, not Rs 251

After a Noida-based company Ringing Bells announced sale of a smartphone at Rs 251, the Telecom Ministry probe has found that a device with such specifications would cost about Rs 2,300.

Officials, however, refused to comment on whether any action will be initiated against the company.

Earlier this week, Ringing Bells launched the world's cheapest phone -- Freedom 251 -- priced at Rs 251, hogging limelight globally.

The Indian Cellular Association, which represents the handset makers industry in India and has members like Apple, Samsung, Microsoft, Lava and Micromax, had also written to Telecom Minister Ravi Shankar Prasad, demanding a probe. 

The association said the bill of material value for a product like this when sourced from the cheapest supply chain cost approximately Rs 2,700. When translated into retail price after addition of applicable duties, taxes and distribution and retail margins, the cost of the product would be at least Rs 4,100, it added. Even BJP MP Kirit Somaiya demanded a probe.

Amid the controversies, the device has continued to grab attention from consumers. Following a heavy demand, Ringing Bells suspended bookings for 24 hours on Thursday.

It resumed bookings on Friday.

The company 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.