Effective next month December, 500 job posts will have to go at Vodafone Hutchison Australia as the company sizes up what could still be managed and saved from the firm amid a dropping market share.

The reduction represents 10 per cent of the telco's 5,000 manpower all over Australia.

"Vodafone will be a leaner, more effective business that is completely focused on what our customers want now and for the long term," Chief Executive Bill Morrow said in a statement, noting that investment priorities are more geared in creating a more reliable data network and upgraded IT systems.

A joint venture between British mobile phone giant Vodafone Group and Hong Kong's Hutchison Telecommunications (Australia), Vodafone Australia operates the brands Vodafone, 3 and Crazy John's. It is Australia's third-ranked mobile phone company.

The cost-cutting measures, according to The Australian Financial Review, was more in exchange of its major shareholders' plans to put in more funds into the joint venture that will fund its planned network upgrades as well as the rollout of its 4G services.

"It is vital that we simplify the business to be efficient and to enable growth in the long term. We need to prioritise every dollar and internal action to count toward an improved customer experience and these changes are designed to deliver just this," Mr Morrow said.

Vodafone said it has spent A$1 billion (US$1.04 billion) on network upgrades. It also has further plants of investing another A$700 million by the end of calendar 2012.

Vodafone's total customer base reduced to 6.8 million, when it lost 178,000 customers in the first half of its 2012 financial year to Australia's two largest telecommunications providers, Telstra Corp. and SingTel's Optus. It likewise lost $131 million in revenues in the same period in review.