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584,000 customers leave Vodafone in 3 months

Vodafone, which is owned by Vodafone Group through its 50% holding in Hutchison Telecommunications Australia (ASX: HTA), has a customer base of just 5.02 million, around one third of Telstra (ASX: TLS).

Since Hutchison Telecommunications Australia (commonly referred to as VHA) reported its half year results to June 30, 2013, the company has lost over 10% of its customer base. When Vodafone Group (the parent company), reported its half year results in London on Tuesday night, VHA had 5.03 million customers at September 30, 2013. It should be noted this figure does not include wholesale customers.

Based on the parent company’s results, Vodafone Hutchison Australia lost 584,000 subscribers in the three months to September 30. This comes just as the company was hoping for a turnaround in customer numbers.

Australia’s second biggest carrier, Optus, owned by Singapore Telecommunications (ASX: SGT) currently boasts around 9.5 million customers whilst Telstra has the lion’s share at 15.3 million.

Despite the declining customer base, VHA is determined to regain its number of subscribers and share price. At Tuesday night’s results, Vodafone said its Australian operations were improving profit margins. Australia CEO Bill Morrow has previously said the company’s got a tough road ahead but is up to the challenge and expects to start growing its customer base in 2014.

Foolish takeaway

After numerous network failures, bad coverage and years of poor customer service, Vodafone customers has had enough. The carrier has lost 1 million customers in 12 months and well over 1.5 million since 2011. Despite launching its 4G network, improving coverage and boosting data plans (contrary to its rivals), customers are still leaving. Mr Morrow has a tough job ahead but after his successes in Europe, it appears he’s the right candidate to tackle VHA’s issues.

Investors have taken a bullish stance on Vodafone and Mr Morrow’s ability to raise the company from the ashes – in the past year Hutchison shares have risen 235%. Although many risks still remain now could be the time to start adding Hutchison Telecommunications to your watchlist.

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Motley Fool contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.  

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