VODAFONE has suffered a dramatic exodus of customers as grassroots campaigns aimed at the telco come home to roost, sending co-owner Hutchison Australia tumbling into the red.

About 375,000 mobile-phone and broadband customers have abandoned the nation's third-biggest telco this year, according to figures released yesterday by Hutchison.

And the group has acknowledged that an aggressive push by rival carriers to poach customers has intensified the fallout.

But Vodafone Hutchison Australia chief Nigel Dews insisted the company was positioning itself to win back public support, investing heavily in infrastructure and customer service.

The service and reliability problems that plagued the network - and spawned a series of biting social-media campaigns - had been resolved, Mr Dews said.

"I am confident that what we are doing, and the way we are doing it, is a lot better," he said.

"We've learned from our mistakes. We are rolling out ahead of what we need and ensuring this doesn't happen again."

Hutchison Telecoms, which owns half of the Vodafone network in Australia, reported a loss of $78.2 million for the six months to June. The company posted a $17.9 million first-half net profit in the same period last year.

Mr Dews attributed the 5 per cent slide in customer numbers to the service problems and to mobile users who were walking away from prepaid handsets in favour of more sophisticated smartphones on contracts.

"(There has been an) increasing number of people who want subsidised handsets in order to get a smartphone," he said.

"The second factor (driving the move from prepaid) would be Telstra's aggression in the pre-paid area," Mr Dews said.

Telstra has garnered more than a million new customers this year with a strong push to cut prices in the mobile market.

Mr Dews admitted extensive social-networking campaigns attacking Vodafone earlier this year had undermined the group's branding.

"We learned a lot the hard way in social media and we've responded," he said.

He said the telco's social media strategy was now on customer service and not simply selling products.

The company had also pumped up infrastructure investment by 30 per cent on last year, and increased service staff by more than 300.

The telco is a joint-venture between Hutchison Telecommunications Australia and Vodafone Group Plc.

Originally published as Vodafone left holding the phone