Noida-based company Ringing Bells on Monday started refunding money to customers who had booked its Freedom 251 smartphone, touted as the world’s cheapest. The company’s director Mohit Goel said they are returning the money to the 30,000 people who had paid for it on Ringing Bells' website, and that the customers can pay them once they are satisfied with the delivery. Another 7 crore people have registered for the phone, but not paid yet.

Goel said the company has been forced to take this step as there has been a lot of “negative speculation” over the phone, which costs Rs251. The company says its investors have backed the project and they don’t need the money up front. “There is a business model to justify the price. We have a foolproof plan,” Goel added.

The phone costs the makers Rs 2,500 apiece to manufacture, but Ringing Bells is hoping to make profits through measures such as "economies of scale, innovative marketing, reduction in duties and creating an e-commerce marketplace", PTI reported. Deliveries begin in April.