Ultra-cheap Ringing Bells Freedom 251 Android phone previously thought to be scam will ship in batch of 200,000 – but company will make loss on each handset

The $4 Indian phone that some thought might never materialise reportedly does exist, but only because the startup producing it is making a loss on each one.

The Ringing Bells Freedom 251, initially announced at a price of £5, is apparently set to ship this week to customers who preordered the phone in February for – ($3.70 or £2.77). At that price – the one the company originally pledged – it is losing the Indian startup Rs 150 ($2.2 or £1.65) on each smartphone.

Ringing Bells founder and chief executive Mohit Goel told the Indian Express: “We will have a loss, but I am happy that the dream of connecting rural and poor Indians as part of the Digital India and Make in India initiatives has been fulfilled with Freedom 251.”

The 3G Android 5.1 smartphone has a 4in screen, 8-megapixel rear camera, 3.2-megapixel selfie camera, a 1.3GHz processor, 1GB of RAM and 8GB of storage, with a microSD card slot for adding more.

The company says that it has nearly 200,000 Freedom 251s ready to ship, with plans to open up orders again in the near future and ship 200,000 handsets a month, although to date no phones have been made available for scrutiny.

Since February, Ringing Bells has faced increasing scepticism. At the launch of the phone the company showed off supposed “prototypes”, which turned out to be smartphones made by another Indian manufacturer with the branding covered.

A government investigation led to a raid of the company’s offices over tax and the lack of certification for the device with the country’s telecoms regulator. Ringing Bells was also accused of cheating and threatened with lawsuits over the rebranding of Adcom smartphones.

Should Ringing Bells be able to ship a working Android smartphone to customers on the 30 June as planned, it will be quite an achievement, although whether a startup can sustain losing £330,000 a month at its planned shipment schedule remains to be seen.