Noida-based BPO Cyfuture sues Ringing Bells for breach of payment

Will Ringing Bells deliver a smartphone finally?

By Dileep Thekkethil

Since Ringing Bells launched Freedom 251, dubbed as the cheapest smartphone in the world for less than $4, the company has been in news for all the wrong reasons.

Ringing Bells first failed to reach up to the expectations of expectant buyers as on the very first day of  booking; their site was down with technical problems. Secondly, there are rumors about the company’s capability to deliver the product, even as the company CEO says it earns Rs 31 profit out of a single unit of the smartphone.

Even now, the problems of Ringing Bells don’t seem to end as its BPO partner is taking the Noida-based company to court for abruptly terminating the contract.

Ringing Bells had given a contract to the BPO company, Cyfuture, for dealing with the calls of the customer. According to the Cyfuture founder and CEO Anuj Bairthi, they signed the contract on a trust basis as some people within the company was sceptical about the business model of Ringing Bells.

Bairathi added that in the first two days after the launch of the device, Ringing Bells expressed happiness over the service provided but once they were asked to pay the weekly payment, the company changed the tone accusing Cyfuture of bad service and without notice terminated the contract.

According to the CEO of Cyfuture, they received millions of calls to the customer care number, which were promptly attended by it staffs.

“However, when we started asking for our payments, which were to be made to us on a weekly basis, they started making false allegations and abruptly decided to terminate our services citing unsatisfactory services. This is a clear case of cheating, fraud and breach of contract. As per the contract, Ringing Bells had specifically assured us of a minimum lock-in period of one year and no termination before a year,” Bairathi said.

On the other hand Ringing Bells accuses Cyfuture for having failed to respond to the huge number of calls they received despite the claim that they hired 100 new people for the new project.

“We had outsourced this job to Cyfuture BPO. Telecom companies confirmed that the helpline was receiving a volume of approximately 12 lakh calls per hour. It came to our knowledge that the BPO company was not able to handle the traffic. We are looking into the situation to serve our customers better,” said Ringing Bells President Ashok Chaddha said.

Freedom 251 is powered by a 1.3Ghz Quadcore processor, coupled with 1GB RAM, 8GB internal memory. The device also features a 3.2 MP rear camera and .3 MP front camera. The device also boasts of connectivity options like dual-SIM card slots, and 3G support. It runs on a customized version of Android 5.1 Lollipop.

Reports also say that Ringing Bells has just rebranded a smartphone model of Adcom, which sells the same product at Rs. 3600 via an e-commerce website.

Industry experts confirm that a 3G smartphone made in China costs around $28 and when it reaches India the price is expected to touch at least $40.

In light of all this, the Indian Cellular Association president Pankaj Mahindroo wrote to the Telecom Minister Ravi Shankar Prasad saying that no company can offer a smartphone equipped with such features for less than Rs 3,500.

“For your kind information, the bill of material (BOM) value for a product like this when sourced from the cheapest supply chain cost approximately $40 (Rs 2,700),” wrote Mahindroo.

Ringing Bells came out strongly against Mahindroo, with its director Mohit Goel saying that when the company sells a smartphone for Rs. 251, it’s getting Rs 31 profit out of each unit.

Goel during an Interview with The Times of India said, “Why am I being hounded? What wrong have I done? Why am I being called a ‘bhagora’ (who’ll run away with the money)? I intend to do a valid business, just like any other startup, and I have a business plan ready.

“We are taking online bookings for only 25 lakh units in the first batch due to limited supplies while giving another 25 lakh through offline distributors. I will deliver the handsets before June 30,” he told the newspaper.

When talking about reports that the design of the device was copied, Goel said, “Some of the devices had the Adcom branding as we sourced panel (screen) from them. However, the final device will have our branding and the phone will have the same features and design that we had showcased.”

After many companies alerted the telecom ministry about a possible fraud, Prasad ordered the Department of Electronics and IT Secretary Aruna Sharma to scrutinize the model of Ringing Bells that enable them to sell the phone for such a low cost.

“The minister has received a representation from Kirit Somaiya and mobile phone manufacturers where they have expressed doubt about the veracity of this venture,” a telecom ministry source told PTI.

The ministry has also sought clarification from Ringing Bells regarding how they managed to sell Freedom 251 without getting a clearance from Bureau of Indian Standards. It has also ordered the Uttar Pradesh government to look into the credentials of the firm.

The Income Tax Department is also looking into the financial structure of Ringing Bells, which has no prior history of selling smartphones.