TELSTRA GROUP LIMITED — Capital/Financing Update 2003

Nov 23, 2003

24 November 2003

The Manager

Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

Telephone 03 9634 6400 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

TELSTRA SUCCESSFULLY COMPLETES \$1 BILLION OFF MARKET SHARE BUY-BACK

In accordance with the listing rules, I attach an announcement for release to the market together with Appendix 3F - Final share buy-back notice.

Yours sincerely

North Grahi

Douglas Gration Company Secretary

Telstra Corporation Limited ACN 051 775 556 ABN 33 051 775 556

Media Release

24 November 2003

358/2003

TELSTRA SUCCESSFULLY COMPLETES \$1 BILLION OFF MARKET SHARE BUY-BACK

Telstra Corporation today announced the successful completion of its \$1 billion off-market share Buy-Back. A total of 238,230,580 shares will be bought back at \$4.20 per share, representing 3.71 per cent of Telstra's non Commonwealth of Australia owned issued capital.

Telstra Chief Financial Officer, Mr John Stanhope, said there was strong support for the Buy-Back and this had led to the Buy-Back Price being struck at the bottom of the Tender range, in accordance with the Tender process explained in the documents provided to shareholders.

"The Buy-Back has enabled Telstra to return surplus capital to shareholders in an efficient, fair and timely manner." Mr Stanhope said.

Telstra accepted Tenders at a specified price of \$4.20 and Final Price Tenders will receive \$4.20. Strong shareholder support for the Buy-Back has meant that it was over two and a half times oversubscribed at the \$4.20 price, requiring larger Tenders to be scaled back by approximately 65.6 per cent. Shares tendered at prices greater than \$4.20 and shares not tendered in accordance with the terms of the Buy-Back will not be bought back by Telstra.

The first 400 shares successfully tendered by each registered shareholder will be bought back in full before the scale back applies, as described in the Buy-Back documents. Telstra will not apply the scale back where this would leave shareholders who tendered all their shares with a remaining holding of 400 shares or less. Accordingly, shareholders with 1009 or less Telstra shares who tendered all their shares into the Buy-Back at \$4.20 or as Final Price Tenders will have all their shares bought back in full.

The \$4.20 Buy-Back Price will comprise a fully franked dividend of \$2.70 and a capital component of \$1.50 per share bought back. The different tax implications of selling shares into the Buy-Back means the Buy-Back Price is not directly comparable to an on-market sale price.

Mr Stanhope said that Telstra had emphasised to shareholders that the financial consequences of participating in the Buy-Back for each shareholder would depend on their individual circumstances. For this reason, Telstra had recommended to all shareholders that they seek their own professional advice about what decision best suited their needs.

"Shareholders whose shares have been purchased under the Buy-Back may receive certain tax advantages, depending on their particular circumstances. For the more than ninety five per cent of Telstra shareholders who decided to retain all their shares, the Buy-Back Price represents a very efficient price for Telstra to buy back its shares and thereby maximise earnings per share and longterm value enhancement for the Company and its shareholders.

"The Buy-Back was part of Telstra's ongoing capital management program and reflected Telstra's very sound financial settings.

"The Buy-Back does not impact the Company's ability to maintain foreseeable capital investment. undertake appropriate acquisitions or fund other growth initiatives.

"Telstra will continue to consider various capital management initiatives in the future," Mr Stanhope said.

Payment of proceeds to successful Tenderers should be completed by 12 December 2003.

Shares offered into the Buy-Back that have not been bought back by Telstra are expected to be released to shareholders' holdings before the opening of trading today.

Before the Buy-Back, Telstra had 12,866,600,200 shares outstanding, including those held by the Commonwealth of Australia. As a result of the Buy-Back, the number of shares outstanding will reduce to 12.628.369.620 and the number of shareholders will reduce from approximately 1.845 million to 1.815 million. The Commonwealth did not participate in the Buy-Back.

Shareholder Examples of Buy-Back

	Total shares tendered at $$4.20$ and as Final Price Tender	Priority Allocation bought back	Shares subject to scale back	Scale: back 1, 2	Shares not bought back	Total shares bought back
S/Holder 1	400	400	0	N/A	0	400
S/Holder $2^2$	$1.000$ .	400		N/A		1.000
S/Holder 3	5.000	400	4.600	65.6%	3.018	1,982

NOTES:

1 A scale back of 65.6 per cent means 34.4 per cent of the shares subject to scale back will be bought back.

2 Example assumes that shareholder 2 has tendered his or her entire holding. If a shareholder has tendered their entire holding at \$4.20 and/or as a Final Price Tender, and as a result of the scale back the shareholder would be left with 400 shares or less, all of the shareholder's holding will be bought back.

Shareholder Enquiries

Telstra Buy-Back enquiry line Phone: 1300 305 385 (within Australia) Phone: +61 3 9615 9199 (outside Australia)

Media Enquiries

Stephen Morrison Media Relations Manager Phone: 03 9634 5611 or 0417 053 501

Telstra's national media inquiry line is 13 1639 and its Media Centre is located at: www.telstra.com au/communications/media

Rule 3.8A

Appendix 3F

Final share buy-back notice (except minimum holding buy-back)

Introduced 1/9/99. Origin: Appendices 7D and 7E. Amended 30/9/2001.

Information and documents given to ASX become ASX's property and may be made public.

Name of entity	ABN
IFELSTRA CORPORATION LIMITED	33 051 775 556

We, Telstra Corporation Limited, give ASX the following information.

Description of buy-back

Type of buy-back $\mathbf{1}$

Selective buy-back on equal access buy-back conditions (as modified).

Details of all shares bought back

$\overline{2}$ Number of shares bought back 238,230,580

1,000,568,436

date:

• $\mathfrak{Z}$ Total consideration paid or payable for the shares
• If buy-back is an on-market buy- $\boldsymbol{4}$ back - highest and lowest price paid

highest price: N/A

lowest price: N/A date:

$+$ See chapter 19 for defined terms.

Compliance statement

• The company is in compliance with all Corporations Act requirements relevant to $1.$ this buy-back.
• $\overline{2}$ . There is no information that the listing rules require to be disclosed that has not already been disclosed, or is not contained in, or attached to, this form.

$6 - 1$ $6 - 124$ November 2003

Sign here:

Company Secretary

Print name:

Douglas Gration

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$+$ See chapter 19 for defined terms.