We made it abundantly clear in March that we would go through this cost-cutting exercise and we have done exactly what we said."He added that this strategy would continue alongside a substantial uplift in marketing expenditure. The company's interim profits halved to pounds 78.3m in the six months to 3 July and turnover fell 6.1 per cent to pounds 1.04bn.A spokesman for Reckitt's said: "There are no surprises for the market here. Reckitt's non-executive chairman Alan Dalby is set to chair the new group.Mr Turrell said: `We are not in a position to give a headcount by region as there are legal issues with the closure of facilities and we want to let employees know first.'Reckitt's restructuring plans were unveiled as the company announced its interim results, which confirmed the outline figures released last week in conjunction with the merger proposal. Reckitt, the firm that makes Dettol and Lemsip, said yesterday it would consolidate, close or sell 15 plants to restore earnings growth following turmoil in emerging markets and major destocking in North America. The company's acting chief executive, Mike Turrell, would not specify where the job losses would come, but at last week's merger announcement, Benckiser's Bart Becht, the proposed chief executive of the expanded group Reckitt Benckiser, said redundancies would be concentrated in Europe and the US, and especially in the companies' headquarters.

RECKITT & COLMAN, the UK household products group which last week made public its intention to merge with Benckiser of Holland, has announced it will shed 1,500 jobs as part of a cost-cutting plan. It is up to the Oranges of this world to devise a package which combines the certainty of pre-pay with the value for money of a contract.. Mr Snook worries that the Asda's of this world will give the mobile industry a bad name by selling something which was not designed to be piled high on supermarket shelves and which ends up costing the customer an arm and a leg But the ball is in the court of the mobile operators. There was an explosive growth in sales followed by an equally dramatic rise in churn rates as the bills began dropping through the letter box and customers began tearing up their contracts.

The choice is between paying 40p-50p a minute or paying 5p-10p with an effective network useage charge built into the cost of the pre-pay card.If Mr Snook is right, then one in every three pre-pay phones sold in the last year will now be lying discarded in drawers somewhere after their users discovered just what an expensive present they could be.Something similar happened two Christmases ago when the networks decided to start selling handsets for as little as a fiver. Knock them out for as little as pounds 39.99 at the local Asda, and the pre-pay phone becomes an irresistible bargain.But there is no such thing as a free lunch, or a free phone call, even when you are dialling 0800. Pre-pay phone sales have exploded precisely because customers like the comfort of knowing in advance how much they have available to spend, particularly when the user may not be one picking up the bill. They use their phones more heavily, which makes them more loyal, and they are less inclined to hang around for the off-peak period to kick in before phoning their teenage friends. Nevertheless, there is some credence in what Mr Snook says. Contract customers are more valuable for the mobile networks and Orange just happens to be taking the lion's share of this part of the market.

To some extent, Mr Snook's observation is also a touch self-serving since Orange would much prefer to have no pre-pay customers at all and persuade them all to sign up on 12-month contracts instead. Orange has one million subscribers who fall into this category so the chief executive needs to chose his words with a little care. THE FUTURE may be orange but the mobile industry was seeing red yesterday after Hans Snook's claim that the pre-pay phone is really a device for fleecing the customer. The US has set an example of the benefits of financial orthodoxy which some European governments, whose budget plans one analyst described yesterday as "quantified escapism", would do well to copy.. Deficit reduction has been the secret ingredient in America's economic miracle Debt reduction could well sustain it. Never mind the technological revolution and the stock market.