Reliance has launched the Rs 777 Classic range of mobile phone handsets, aimed at the entry-level market. The cheap Rs 777 Classic cellphones are manufactured by ZTE for Reliance, India’s largest private wireless operator.

The Reliance Classic phones come in three models - Classic 202, Classic 203 and Classic 204. Classic 202 mobile costs Rs 777, Classic 203 Rs 844 and Classic 204 Rs 888. Unlike earlier financing schemes from Reliance Info when the company handsets for a small fee and retrieved the money through installments, the Classic range of mobiles fully belong to the buyer - There is no finance or installments.

With the launch of cheap Rs 777 phones, Reliance has successfully smashed the entry barriers in mobile telephony. Currently, many leading cellphone manufacturers like Nokia and Motorola are struggling to launch sub-Rs 1000 cellphone, even while maintaining profit margins.

Reliance claimed in a press release that this is the cheapest mobile phone in the world. While in the West, cell services and mobile phone come bundled allowing companies to drive down the price, in India, the bundling is limited to CDMA manufacturers. Reliance said that the low mobile price is an introductory offer for Classic.

SP Shukla of Reliance admitted at a press conference that there was an element of subsidy built into the Rs 777 mobile phone price. He added that acquiring a new customer always involved a certain cost.

With Reliance Classic mobile phones which are as cheap as Rs 777, the company plans to attract second-hand mobile buyers and entry level buyers. Reliance sold 12 million handsets last year. The company claims that it has already sold 30 lakh Classic mobile phones. It is planning to push up the sales with the Rs 777 mobile. Reliance estimates the size of the entry-level cellphone market at 80 million.