In 2016, India witnessed one of the most audacious marketing stunts in the history of the smartphone industry. A company named Ringing Bells Private Limited announced the launch of the Freedom 251, a smartphone priced at an unbelievable ₹251 (US$3.74).
Marketed as the world’s cheapest smartphone, the Freedom 251 captured the imagination of millions of Indians, especially in a country where affordability is a key driver of consumer behavior.
However, what followed was a tale of broken promises, controversies, and one of the biggest scams in India’s smartphone market.
This article delves into the rise and fall of the Freedom 251, exploring its features, the controversies surrounding it, and the aftermath of what is now known as the Freedom 251 scam.
The Promise of the Freedom 251: A Revolutionary Smartphone
The Freedom 251 was unveiled in February 2016, during a time when the Indian government was promoting initiatives like Make in India and Digital India. The smartphone was positioned as a revolutionary product that would bridge the digital divide by making smartphones accessible to the masses. For a promotional price of ₹251, the company promised the following specifications:
- 1 GB RAM
- 8 GB internal storage (expandable up to 32 GB via microSD)
- 1.3 GHz Quad-Core processor
- 3.2 MP rear camera and 0.3 MP front camera
- 4-inch qHD display
- Android 5.1 Lollipop operating system
- 1450 mAh battery
- Dual SIM support
- 1-year warranty
The company claimed to have set up manufacturing units in Haridwar and Noida, with raw materials imported from China. They also promised to establish over 600 service centers across the country. The Freedom 251 was marketed as a symbol of India’s technological progress and affordability.
The Hype and the Crash: Overwhelming Response and Immediate Backlash
The promotional price of ₹251 was available for a limited time, from February 18 to February 21, 2016. The response was overwhelming. The company’s website crashed on the first day due to heavy traffic, and within a short span, Ringing Bells claimed to have received 30,000 bookings. By the end of the promotional period, the company reported bookings worth ₹1.75 lakh (US$2,604).
However, the excitement was short-lived. Soon after the launch, questions began to arise about the feasibility of producing a smartphone at such a low price. Critics and industry experts were quick to point out that the production cost of a smartphone with the claimed specifications would be at least ₹2,300-₹2,400 (US$34-36), making the ₹251 price tag highly suspicious.
Controversies and Criticism: Unraveling the Truth
1. Prototype Fraud: A Rebadged Device
During the launch event, the company showcased a prototype of the Freedom 251. However, it was later revealed that the device was a rebadged Adcom phone, with the original branding covered with whitener. Adcom, the original manufacturer, threatened to sue Ringing Bells for using their device without permission.
2. Government Raids: Lack of Certification
On February 20, 2016, government officials raided the offices of Ringing Bells to investigate why the product lacked Bureau of Indian Standards (BIS) certification. The absence of proper certification raised further doubts about the legitimacy of the product.
3. Political Backlash: Allegations of a Ponzi Scheme
Bharatiya Janata Party (BJP) MP Kirit Somaiya labeled the Freedom 251 as a “Ponzi scheme” and filed a complaint against Ringing Bells. An FIR was registered against the company’s director, Mohit Goel, and president, Ashok Chaddha, under Section 420 of the Indian Penal Code (IPC) and the Information Technology Act. However, the Allahabad High Court later stayed the FIR, calling it premature.
4. Industry Skepticism: Feasibility Concerns
The Indian Cellular Association (ICA) expressed doubts about the feasibility of producing a smartphone at ₹251. They estimated that even with subsidies, the minimum selling price should be around ₹3,500 (US$52). The ICA also criticized the involvement of senior government officials in the product launch, which lent an air of credibility to the otherwise dubious scheme.
The Scam Unfolds: Broken Promises and Fraudulent Practices
Despite the controversies, Ringing Bells continued to promise delivery of the Freedom 251. The company claimed to have delivered 5,000 units by July 2016 and promised to deliver another 65,000 units. However, most customers reported never receiving their devices. Even those who did receive the phone found it to be of extremely poor quality, with many features not functioning as advertised.
1. Refund Issues: Empty Promises
Ringing Bells initially promised refunds to customers who pre-booked the Freedom 251. However, most customers never received their money back. The company blamed “negative speculation” for their inability to deliver the product and claimed that customers would only pay upon delivery. This promise, too, was never fulfilled.
2. Supplier and Employee Fraud: A Web of Deceit
The scam extended beyond customers. Ringing Bells was accused of non-payment of dues to its suppliers and employees. The company’s customer service provider, Cyfuture, filed a complaint alleging fraud. Investigations revealed that Ringing Bells had duped not only its customers but also its business partners and employees. The total scam amount was estimated to be around ₹20 crore (US$2.98 million).
3. Arrest of Mohit Goel: Legal Consequences
In 2017, Ringing Bells’ director, Mohit Goel, was arrested by Indian authorities for fraud. The arrest followed a complaint by a Ghaziabad-based distributor, Ayam Enterprises, which alleged that Ringing Bells had defrauded them of ₹16 lakh (US$23,811). Goel was later released on bail but faced multiple charges of corruption and blackmailing.
The Aftermath: A Lasting Impact on the Smartphone Market
The Freedom 251 scam left a lasting impact on India’s smartphone market. It exposed the vulnerabilities of consumers and the ease with which fraudulent schemes can be executed in the name of affordability. The company’s website, www.freedom251.com, was eventually shut down, and the domain was auctioned by GoDaddy. In March 2019, the domain was repurposed as a tech blog by its new owner.
Lessons from the Freedom 251 Scam: A Cautionary Tale
The Freedom 251 scam serves as a cautionary tale for consumers and businesses alike. Here are some key takeaways:
- Beware of Too-Good-To-Be-True Offers: If a deal seems too good to be true, it probably is. Always research the product and the company before making a purchase.
- Verify Credentials: Check for proper certifications and approvals, such as BIS certification for electronic devices.
- Stay Informed: Keep an eye on industry experts and government advisories to avoid falling prey to fraudulent schemes.
- Demand Accountability: If you are a victim of a scam, report it to the authorities and demand accountability.
Conclusion: A Dream That Turned Into a Nightmare
The Freedom 251 was marketed as a symbol of India’s technological progress and affordability. However, it turned out to be one of the biggest scams in the country’s smartphone market. The story of the Freedom 251 is a reminder of the importance of vigilance and due diligence in the digital age. While the dream of a ₹251 smartphone may have been enticing, the reality was a harsh lesson in the dangers of blind trust and unverified promises.
As consumers, it is our responsibility to stay informed and cautious, ensuring that we do not fall victim to such scams in the future. The Freedom 251 may have been a scam, but the lessons it taught us are invaluable.