This is significantly lower than the existing entry-level prices of black and white handsets at around Rs 1,000 and colour handsets at Rs 1,400-Rs 1,800 from the Tatas, the other significant CDMA mobile service provider.

The handset range, which is being manufactured in China, has two other low-end models that were also launched today. They are Classic 204 and Classic 203 and are priced at Rs 844 and Rs 888, respectively, much lower than the existing entry-level phone prices.

These phones are SIM-enabled, allowing consumers to move from one CDMA service to another, a flexibility hitherto available only on GSM handsets.

The company said the offer would last as long as there were enough phones. Executives said the Classic 202 is a black and white phone that shows a colour screen when it is switched on.

Announcing the launch, RComm President (personal business) S P Shukla said, "We believe that this would provide customers looking at second-hand phones an opportunity to buy a new handset. The lowering of handset prices would also increase the telephony penetration in the country."

India's present telephony penetration stands at 14.7 per cent and the company hopes to sell around 3 to 4 million such handsets a year.

However, a senior executive of a leading mobile manufacturing competitor said, "Our belief is that the company is subsidising the cost of the handset to get new customers."

The lowest prices that competitors offer

• Tata CDMA black and white phones Rs 999
• Tata CDMA colour phones Rs 1399
• Nokia black and white GSM phones Rs 1699
• Nokia GSM colour Rs 2200