New Delhi: Ringing Bells Pvt. Ltd is to launch the country’s cheapest smartphone on Wednesday, breaking a new price barrier, but the news has been met with cautious optimism by industry analysts.

Freedom 251 smartphone will be priced at 251, or less than a medium-sized pizza. The cheapest smartphone in India sells for 1,729.

Ringing Bells is promoted by Mohit Kumar Goel, a graduate of the Western Sydney University and holds an MBA degree from Amity University, said a company spokeswoman.

Goel, who follows TechCrunch on his Linkedin profile, has also worked with Shaw Communications Inc., a Canadian telecommunications company that provides telephone, Internet and television services.

The Ringing Bells promoter hails from a three-decade-old family business of agri-products and ventured into telecom only in September.

The shift to technology from agriculture was spurred by the “Modi government’s extensive work and obvious commitment to “Sabka Saath, Sabka Vikas", the spokeswoman said in an email.

Goel himself was unavailable for comment.

Member of Parliament Murli Manohar Joshi and defence minister Manohar Parrikar are to launch the smartphone in the capital on Wednesday evening under the Make in India banner.

Little is known about the company except that it based out of Noida and has Sushma Devi and Rajesh Kumar besides Goel as its directors, according to data from the Registrar of Companies.

Analysts, however, are sceptical about the price point of the smartphone.

“There is no way the company can sell the product at such a low cost without subsidizing it," said Jayanth Kolla, founder and partner at research firm Convergence Catalyst.

Ringing Bells has so far not made public any partnership with telecom operators who typically subsidize the handset but lock the customer over a time frame to use their services.

It wasn’t immediately clear whether the company is being subsidized by a government programme.

Another industry analyst seemed concerned about Freedom 251’s economic viability.

A smartphone with expected specifications as Freedom 251’s should cost around 680-816 even if you were to use the cheapest possible components, said Faisal Kawoosa of CyberMedia Research.

Mint’s own back-of-the-envelope calculation came up with a much higher number, close to 5,000.

“The component industry," Kawoosa said,“works on volume, so it is difficult to believe that a company as small as this one could achieve such a feat."

Kawoosa also expressed surprise how an unknown company that “no one knows anything about" could manage to purchase components at such cheap rates.

Kawoosa said that the product would definitely disrupt the industry, but maintaining quality at a price like this would be difficult.

“In India, we have in the past, witnessed many smartphones and tablets being launched at extremely lower price... (which) failed to sell any significant numbers in the market," Kolla said, adding, “If the same thing repeats again, then there really is no impact on the industry."

Moulishree Srivastava contributed to the story.

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