Photograph: Freeimages.com/iceviking

An Indian company on is launching what could be the world's cheapest smartphone

Handset manufacturer Ringing Bells' Freedom 251 phone will cost 251 rupees, or around 3.66 dollars. It will be nearly one-sixth the price of the cheapest smartphone in India.

The device, which runs on the Android 5.1 Lollipop operating system, has a 4-inch colour display, a 1.3 gigahertz processor, and two cameras: a 3.2-megapixel back camera and a 0.3-megapixel front camera.

The smartphone was developed with "immense support" from the Indian government, Ringing Bells said.

The company is touting it as a success story of Premier Narendra Modi's Make in India campaign, which encourages manufacturing in India, according to broadcaster NDTV.

Indian Defence Minister Manohar Parrikar was expected to be the chief guest at the smartphone's official launch on Wednesday night.

India's mobile phone subscriber base has risen to over 1 billion users, while sales of low-cost smartphones have also surged. The country recently became the world's second-largest smartphone market after China, according to Counterpoint Research.

Full-page advertisements put out by Ringing Bells in newspapers called the launch a "historic moment in the mobile world," with its creators claiming the low-cost device will greatly improve connectivity in India.

At the given rate, the Freedom 251 costs less than a movie ticket at an Indian mall, but experts reckon the materials used to make the device cost a minimum of 24 dollars.

Although Ringing Bells has not disclosed details on manufacturing, government subsidies could have well helped fund the new model, said Anil Chopra Editor of PC Quest and Labs, a leading technology magazine.

But other experts said it was more likely that one or more of the mobile operators were subsidizing the handsets.

In 2011, the Indian government collaborated with British-Canadian vendor Datawind to launch low-cost tablet computers, called Aakash. The tablets were sold at a subsidized cost of under 3,000 rupees to poor students but the project reportedly closed last year.

Experts said it was too early to say whether the launch of the phone will disrupt the market or trigger a price war between manufacturers.

Chopra cited the Aakash example saying the tablets did not meet people's expectations. "We will have to wait and see if the phone is as good as it is claimed, then it could definitely make an impact," he said.

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