23 October 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

Mail-out of Telstra Buy-Back Booklet Commences

In accordance with the listing rules, I attach an announcement for release to the market.

Yours sincerely

North brake

Douglas Gration Company Secretary

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

Media Release

23 October 2003

323/2003

Mail-out of Telstra Buy-Back Booklet Commences

Telstra Corporation today commenced the mail-out of Buy-Back booklets to its 1.8 million shareholders in both Australia and overseas.

The booklet contains further details of the off-market tender process, which will open on 3 November and run for a period of nineteen days, closing on 21 November.

Telstra Chief Executive Officer, Dr Ziggy Switkowski, said that all shareholders would have nearly a month to review the booklet and consult their financial advisers.

"We hope to have completed the mail out by the end of October, and will be able to address shareholder queries at the Annual General Meeting on 14 November," Dr Switkowski said.

"Early feedback has been very positive, and we are confident that the program will be a success," he said.

Announced on Friday 3 October this year, the planned \$800 million to \$1 billion Buy-Back is a conservative and appropriate response to the strength of Telstra's cash flows, balance sheet and its disciplined capital expenditure program.

Designed to ensure a fair and beneficial outcome for all shareholders, the Buy-Back will make Telstra more capital-efficient, while permitting the company to maintain foreseeable capital investment, undertake appropriate acquisitions or fund other growth initiatives.

The total Buy-Back Price is being determined via a tender process, under which all eligible shareholders are able to tender any number of their shares to Telstra at specified prices from \$4.20 to \$5.40, or as a Final Price Tender.

The Final Price Tender option allows shareholders to elect to receive the final Buy-Back Price, whatever it is determined to be. Final Price Tenders are designed to make the tender process easier for retail shareholders.

All shareholders who participate in the Buy-Back will receive a fixed capital amount of \$1.50 per share, with the balance of the Buy-Back Price consisting of a fully franked dividend component of between \$2.70 and \$3.90 per share

For shareholders who decide to retain their holdings, the Buy-Back is expected to increase earnings per share and return on equity through the overall reduction in capital.

Important Notes

Under the off-market tendering process, Telstra will buy all the shares tendered by shareholders who elect to receive the final Buv-Back Price or who tender their shares at a price equal to or below the final Buy-Back Price, subject to any required scale-back.

Any shareholder who tenders all of their shares at or below the Buy-Back Price or as a Final Price Tender and who would be left with 400 or less shares as a result of any scale back will have all of their shares bought back.

All shares that are accepted by Telstra will be bought back at the final Buy-Back Price, even if they are tendered below that price. Telstra will not buy any of the shares tendered by shareholders at a price above the final Buy-Back Price.

Shareholders should note that the Buy-Back might have different consequences for each shareholder, depending on their original purchase price and individual tax situation.

Shareholders on the Australian register who have enquiries may call the Telstra Buy-Back enquiry line on 1300 305 385 (within Australia) or $+61$ 3 9615 9199 (outside Australia). Shareholders on the New Zealand register should dial 0800 835 7872 (within New Zealand) or +64 3 308 8887 (outside New Zealand).

It is anticipated that shareholders who participate in the Buy-Back and who acquired their Telstra shares after 8 October 2003 may not be entitled to a tax offset and franking credit. This is on the basis that the Buy-Back Price and any scale back will be determined no earlier than 23 November 2003.

Some participating shareholders who have acquired their Telstra shares on or before this date may also be denied the benefit of the tax offsets and franking credits, depending on their own particular circumstances.

Shareholders should seek professional advice in relation to participating in the Buy-Back.

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 the Telstra Newsroom is located at: www.telstra.com.au/newsroom

A VNR will be made available to all networks via news exchange ex GTV9 at 15:00 on Thursday 23 October 2003

RELIXED

Telstra Corporation Limited (ABN 33 051 775 556)

This is an important document If you are in any doubt as to the action you should take,
you should consult your professional adviser immediately.

Important dates

October

LIA (1999) A ZOLA LA LA LA LA	States quoted ex-erittlement to participate in the Suu-Back on the ASX States water to a find ASA and a three links and net and confer an entitlement to participate in the Bundletx
A (4 5 5 MA SA A 3 5 6 6 6 7 7 7 6 6 7 7 7 7 7 7 7 7 7	Determination of shoreholders entitled to participate in the Rou-Back fBuu-Back record datei
King Kuwang Tanan (Kabupatén 914 MAX EN 2774 MAN 28	Shares avoied ex-entitlement to participate in the Buy-Back on the NZX Teistra First Obtarter Market Unitate
November

E SA MARKA YA MALAMBA SHI YA YA KAMA YA KATA WA TA 1979.
1971 - A SA SA SA SA SA YA YA MARKA WA TA NASA YA TA NASA NA SA SA SA TA 1979.
1972 - A SA SA SA SA SA SA SA SA SA SA SA SA S an ang pag-pagpalang na

Amuud General Meeting Tender Period closes. Tenders must be received by the Telstra Share Registry ns later than 7pm in Australia or New Zealand

Announcement of the Buy-Back Price and the number of Shares bought back

EN 1991 (MARA 1991)
18. DE MARCA 1992, 1992

December

Dispotch/crediting of Boy-Back proceeds to participating shareholders completed

de la componenza You are eligible to participate in the Bug-Back if Shares are registered in your name on Friday, 17 October 2003 and in accordance with the SCH Business Rules, the Shares confer or gningnen (ozee ave the hytolior

lssuer Sportsen. A Holder

If you wish to participate in the Buy-Back, please complete and sign the enclosed Tender Form and send it to:

LE CHANGE DE BRAIL

1984 GRAND AN VIET A MONTAN CALLE

from aithio Auckain, teistid Buy Badk Tender Resident and Asiated Maionume Victorian Oso artiko estralio TELSTO Sgore Registro 1907-9 Salassidd Mahabiric Michael

Rund Gavenu

Tender Period opens

Telsuo Shore Registra GARY REDEESE Registrats aminea feval 4,333 Collins Street Melbourne VIC 2000

so that it is received no later than zom Melbourne time on Bíday, 21 November 2003.

If you have any questions about completion and processing of door Jender Form please contra the fektro two Rack engthu line on 1300 305 385 within Australia or 161 (3) 9615 9199 if you ore calling from outside Australia. Otherwise, pieasezontact gour professional advisér.

tha Bando

If you have a CHESS Holding and you wish to participate in the Buy Back contact your controlling participant (normally your broker) in sufficient thrie for them to process your Tender no later than 7pm Melbourne time on Friday, 21 November 2003. The name of your controlling participant is printed on the fop nont of the enclosed render form. You do not need , to return the Tender Form enclosed with this booklet, unless. requested by your controlling participants

All Bargare (1994), Straight and George Corporation If you hold shares on the New Zealand register of Telsim, you should refer to section 1.15 for details on how fossubrait Coop Finest

Key details of the Buy-Back

This booklet provides details of the \$800 million to \$1,000 million share buy-back recently announced by Telstra. The Buy-Back is an opportunity for you to offer to sell some or all of your Shares to Telstra.

Your choice

It is your choice whether you participate in the Buy-Back or not.

If you DO choose to participate in the Buy-Back:

you can choose the minimum price in the range \$4.20 to \$5.40 at which your Shares will be bought back (your Tender Price);
if your Shares are bought back, you will receive a fully franked dividend as part of the Buu-Back Price:
if the Buy-Back Price is higher than your Tender Price, you will receive the higher Buy-Back Price for each Share bought back;
you will not have to appoint a stockbroker to sell your Shares; and
if the Buy-Back Price is less than your Tender Price, you will get to keep your Shares.

If you choose NOT to participate in the Buy-Back:

the number of Shares you hold will not change, but you will have a slightly higher ownership interest in Telstra;
you will receive a slightly larger share of any dividends the Telstra Board declares in the future; and
you will benefit from any improvement in Telstra's earnings per share and return on equity.

What to do?

If you DO choose to participate in the Buy-Back

You should read this document carefully and then refer to section 1.15 for details on how to participate.

If you choose NOT to participate in the Buy-Back

You do not need to take any action.

.
Please read this document for more detailed information. If you have any questions after reading this document, please call the Telstra Buy-Back enquiny line on 1300 305 38! (outside of Australia on +61 (3) 9615 9199).

ELLEL PLATA ETA ETA ETA ELKERK
Katalog aslah katalog ang katalog at nag CONTRACTOR
1. Details of the Buy-Back and Tender process with the control
What is a bud-back? In the second company of kwu
Why is Telstra implementing a buy back? In the common - 7
What are the advantages of a tender process? All and EU.
Am Lentified to tender Shares in the Buu-Back? [11] w
Do i hove to fender my Shares? ewy 83 What does the Buy-Back mean for me if I do not participate?"
Will the Commonwealth participate in the Buy-Back? Commonwealth 55
55 What price will Teistra pay to buy back my Shares? The
How will know what his fun fact fake is? 89
Will all the Shares Hierder be bought back? 690
How will any scale back affect shareholders who hold a relatively small number of Shares? Fari		mila
Shareholders with 400 Shares or less community and control to SUPPORT How does the Buy-Back compare to selling my Shares on the stack market? ewr
How have Teistra Shares performed over recent times? [100] KWA WA
Thew do I participate in the Buy Bock? man
Can I withdraw or amending Tender? BUILD
How can Hobtain additional Tender and Withdrawal/Amendment Forms? r William
How will lifeceive pagment for Shares bought back? The Commission of the Commission mun
Will I still receive the 2002/2003 final dividend if my Shares are bought back? . 680 Can Istill vote at the Annual General Meeting if illender my Shares to Telstra?
8920 Can Itrade mi, Shares alter submitting a Tender? w
Note to shareholders located in the United States ww		W. K
Australian en implications for shirts and the PW
SIGNIFICA SUPPLE OF PERCONDUCT
4. Additional information on the Bou-Back
5. Definitions and interpretation E TANAHAN MARAHIDI KACAL TARAH DALAM DALAM DAN DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALAM DALA	_________	--
TATE POWER AND REACTIONS
Tender Withdrawai and Amendment Form (attached at the back of this booklet)

a mana ang pangang pangang pangang pangang pangang pangang pangang pangang pangang pangang pangang pangang pan

.......................................

Chairman's letter

Robert Mansfield AO Chairman

Dear shareholder

On 28 August 2003, Telstra announced its intention to buy back around \$800 million to \$1,000 million worth of Shares through an off-market buy-back tender process.

The Buy-Back is a conservative and appropriate response to the strength of your company's cash flows and balance sheet and its disciplined capital expenditure program. Our capital management program is very important and complementary to securing ongoing profitable growth and delivering great communications solutions to every customer....

For companies with surplus cash, buy-backs are an increasingly common method for improving capital efficiency in a manner that also rewards shareholders. The Buy-Back is available to all shareholders, and has been designed to ensure that all participants receive the same price for their Shares. This outcome is achieved through the use of an off-market tendering process, in which shareholders indicate the price they would like to receive for all, or some, of their Shares.

It is important to understand that all shareholders have complete flexibility in deciding whether they wish to participate in the Buy-Back. The Telstra Board believes the Buy-Back is beneficial for all shareholders. For shareholders who decide to retain their Shares, the Buy-Back is expected to increase the company's earning per share and return on equity through the overall reduction in capital. For shareholders who sell their Shares, the Buy-Back Price includes a fully franked dividend.

Shareholders may offer to sell some or all of their Shares at any of the specified prices within the range of \$4.20 to \$5.40, or submit a Final Price Tender and simply elect to receive the Buy-Back Price as determined by Telstra.

Once Telstra has received and reviewed all the Tenders, it will select as the Buy-Back Price the lowest price in the range that enables it to purchase around \$800 million to \$1,000 million worth of Shares.

Telstra intends to buy all the Shares tendered by shareholders as a Final Price Tender and Shares tendered at a price equal to or below the Buy-Back Price, subject to any required scale back. Telstra will not buy any of the Shares tendered by shareholders at a price above the Buy-Back Price. The scale back has been specially designed so that it need not apply to small shareholdings (see section 1.11 for details).

The Buy-Back offers shareholders the opportunity to receive a capital amount of \$1.50 per Share, with the balance of the Buy-Back Price being a fully franked dividend. Shareholders should note that the Buy-Back may have different tax consequences for different shareholders, depending on their original purchase price and individual tax situation.

If you wish to submit a Tender, you must ensure that your completed and signed Tender Form is received by the Telstra Share Registry or, if you hold your Shares in CHESS, that your controlling participant (normally your broker) processes your Tender, no later than 7pm Melbourne time (Australian register) or 7pm New Zealand time (New Zealand register) on Friday, 21 November 2003.

Shareholders on the Australian register may call the Telstra Buy-Back enquiry line on 1300 305 385 (within Australia) or +61 (3) 9615 9199 (outside Australia). Shareholders on the New Zealand register should dial 0800 835 7872 (within New Zealand) or +64 (3) 308 8887 (outside New Zealand).

I encourage you to consider this document carefully and, if you are in any doubt as to the action you should take, please contact your professional adviser.

Yours sincerely

Robert Mansfield AO Chairman

830anio 530pm Vonduno Fiddy Maboumeting

1300 305 335 (within Australia) Hốt (3) 9615 9199 (OURICE AUSTRITO)

Timografia a shekara ta 1999 a tshkoning ta 1999 a tshkoning ta 1999 a tshkoning ta 1999 a tshkoning ta 1999

830am to 5.80pm Monday to Friday NAVIZACIONE BELL

0800 885 7872 (Within NZ) +64 (3) 308 8887 (outside NZ)

1. Details of the Buy-Back and Tender process

This booklet invites you to tender your Shares to Telstra in the Buy-Back. It sets out the terms of the Buy-Back and other information to assist you in making a decision whether to participate in the Buy-Back.

This Invitation does not constitute or give rise to a legally binding offer capable of your acceptance. If you tender your Shares in the Buy-Back, you make a formal offer to sell those Shares on the terms and conditions set out in the Buu-Back Documents. If Telstra accepts your Tender, a Buy-Back Contract is formed and your tendered Shares will be sold to Telstra on those terms and conditions.

1.1 What is a buu-back?

A buy-back occurs where a company buys back its own shares. The shares bought back are cancelled, reducing the number of shares the company has on issue.

1.2 Why is Telstra implementing a buy-back?

Telstra has decided to implement a buy-back because it is expected to provide value to remaining shareholders through expected enhancements to earnings per share and return on equity and it will enable Telstra to maintain a more efficient capital structure.

The Buy-Back is being undertaken as part of the Board's program of capital management and reflects Telstra's sound financial settings. Telstra's strong cash flows and balance sheet enable it to pursue a range of new capital investments and expansion opportunities at the same time as increasing returns to shareholders through significant capital management initiatives. The Telstra Board believes that the Buy-Back has benefits for all shareholders, whether or not they participate in it.

1.3 What are the advantages of a tender process?

Telstra is conducting the Buy-Back by way of a tender process.

The advantages of the tender process include the following:

participation in the Buy-Back is optional and shareholders have maximum flexibility to tailor their participation to suit their own circumstances. You are able to:
choose whether to tender your Shares in the Buu-Back;
choose how many (if any) Shares to tender; and
· choose your Tender Price;
your Tender Price is the lowest price you will receive for each Share bought back. If the Buy-Back Price is higher than your Tender Price, you will receive the higher Buy-Back Price. Under no circumstances will you receive less than your Tender Price for each Share bought back:
all eligible shareholders have an equal opportunity to participate in the Buy-Back;
the Buy-Back will enable Telstra to pass on surplus franking credits; and
shareholders do not have to appoint a stockbroker to sell their Shares in the Buy-Back.

Further details of the tender process are set out in section 1.10.

1.4 Am I entitled to tender Shares in the Buy-Back?

You are entitled to tender Shares which are registered in your name on Friday, 17 October 2003 and which, in accordance with the SCH Business Rules, confer an entitlement to participate in the Buy-Back. Shares acquired on the ASX after 12 October 2003 do not confer an entitlement to participate in the Buy-Back.

The maximum number of Shares you are entitled to tender in the Buy-Back is set out on the personalised Tender Form enclosed with this booklet.

If you are a current or former employee of the Telstra Group and you have TESOP 97 Shares or TESOP 99 Shares, please refer to the TESOP Buy-Back Document sent to you with this booklet, which sets out the specific terms and conditions of participating in the Buy-Back for your TESOP Shares.

1.5 Do I have to tender my Shares?

Participation in the Buy-Back is entirely at your discretion. If you do not wish to participate, you do not have to do anything and the number of Shares you hold will not change as a result of the Buy-Back.

1.6 What does the Buy-Back mean for me if I do not participate?

If you choose not to participate, you will hold a

slightly larger percentage of the total Shares in Telstra after the Buy-Back is completed. You will receive a slightly larger share of the total amount of any dividends declared by the Telstra Board in the future. You will also benefit from any improvement in earnings per share and return on equity.

1.7 Will the Commonwealth participate in the Buy-Back?

The Commonwealth Government has announced that it supports the focus by the Telstra Board on a program of capital management, but it has decided that the Commonwealth will not participate in the Buy-Back as it would complicate the conduct of the Buy-Back.

1.8 What price will Telstra pay to buy back my Shares?

The Buy-Back Price will be the lowest specified price in the range of \$4.20 to \$5.40 per Share that will allow Telstra to purchase the amount of capital it determines to buy back. The top of the range represents an 11.8% premium and the bottom of the range a 13.0% discount to Telstra's closing price of \$4.83 on 2 October 2003 (the last trading day prior to announcement of full details of the Buy-Back).

You will be paid the Buy-Back Price for each of your Shares that are bought back, even if your Tender Price is below the Buy-Back Price.

If you wish to increase the likelihood that your Shares will be bought back, you should submit a "Final Price" Tender". If you submit a Final Price Tender, you are willing to sell your Shares at the Buy-Back Price, whatever it is determined to be under the tender process. The Buy-Back Price could be as low as \$4.20 or as high as \$5.40 per Share. Final Price Tenders are designed to make it easier for retail shareholders to successfully participate in the Buy-Back. Final Price Tenders will only be scaled back if the total number of Shares tendered at the lowest price in the range and as Final Price Tenders is more than Telstra determines to buy back.

1.9 How will I know what the Buy-Back Prica is?

Telstra intends to announce the Buy-Back Price to the ASX as soon as possible after the Buy-Back is completed, but no later than Tuesday, 25 November 2003.

1.10 Will all the Shares I tender be bought back?

Telstra intends to buy back around \$800 million to \$1,000 million worth of Shares (approximately 1.3% to 1.6% of issued capital, assuming a \$4.80' Buy-Back Price).

The success of your Tender will depend on your Tender Price, the size and price of Tenders lodged by other shareholders and the total number of Tenders Telstra accepts.

How will Telstra determine successful Tenders and any scale back?

If you tender your Shares at a price above the Buy-Back Price, your Tender will be rejected and your Shares will not be bought back.

If you tender Shares at or below the Buy-Back Price, or as a Final Price Tender, your Tender will be successful and your Shares will be bought back, subject to any scale back.

What is a scale back?

The following scale back mechanism will apply if the total number of Shares tendered at or below the Buy-Back Price and as Final Price Tenders is more than the total number of Shares Telstra determines to buy back:

(a) Tenders below the Buy-Back Price will be accepted in full:
(b) Tenders above the Buy-Back Price will be rejected;
(c) For Tenders at the Buy-Back Price and Final Price Tenders:
(i) If the Buy-Back Price is not the lowest price inthe range, Final Price Tenders will be accepted in full, and Tenders at the Buy-Back Price (other than Excluded Tenders) will be scaled back on a pro rata basis.
(ii) If the Buy-Back Price is the lowest price in the range (\$4.20), Tenders at the Buy-Back Price and Final Price Tenders (other than Excluded Tenders) will be scaled back on a pro-rata basis, but only after:
(A) the Priority Allocation is bought back from each shareholder who tendered, in aggregate, more than the Priority Allocation at the Buy-Back Price and/or as a Final Price Tender; and
(B) all of the Shares tendered at the Buy-Back Price and/or as a Final Price Tender are bought back from each shareholder who tendered, in aggregate, the Priority Allocation or less at the Buy-Back Price and/or as a Final Price Tender.

What is the Priority Allocation?

The Priority Allocation is 400 Shares or such lesser number of Shares as is required to ensure that Telstrais able to buy back only the number of Shares it determines to buy back.

What is an Excluded Tender?

The scale back mechanism does not apply to a Tender submitted by:

(i) a shareholder who tenders all of their Shares at the Buy-Back Price, below the Buy-Back Price and/or

as a Final Price Tender and who would have a Small Holding (400 Shares or less) as a result of the scale back; or

(ii) the TESOP Trustee.

Excluded Tenders at or below the Buy-Back Price or submitted as Final Price Tenders will be accepted in full.

The details of any scale back will be announced as soon as possible after the Closing Date. Telstra expects to make this announcement no later than Tuesday, 25 November 2003. When the scale back is calculated. all fractions will be rounded down to the next Share.

Example 1

As an illustration, assuming 3 shareholders tender 1,000 Shares each into the Buy-Back as follows:

	Shares tendered	Tender Price ________
Shareholder 1	1,000	\$5.40
Shareholder 2.	600	\$4.80
	400	\$4.20
Shareholder 3	1.000	Final Price Tender

and the Buy-Back Price is determined to be \$4.80³, the outcome of each Tender would be as follows:

	Tender Price	Outcome
Shareholder 1	\$5.40	Not successful, no Shares bought back
Shareholder 2	\$4.80	Successful, 600 Shares bought back subject to any scale back
	\$4.20	Successful, all 400 Shares bought back
Shareholder 3	-Final Price Tender -	Successful, all 1,000 Shares bought back

Shareholder 1 would not be successful because their Tender Price is above the Buy-Back Price, \$4.80.

Shareholder 2 tendered a total of 1,000 Shares at two different prices: 600 Shares at \$4.80 and 400 Shares at \$4.20. Both Tenders submitted by Shareholder 2 would be successful, however the Tender submitted at \$4.80 would be subject to any scale back that is required, because \$4.80 is the Buy-Back Price. If a scale back is required, the number of Shares bought back from Shareholder 2, under the Tender submitted at \$4.80, would be less than 600 Shares (unless it is an Excluded Tender). The 400 Shares tendered by Shareholder 2 at \$4.20 would not be subject to any scale back, as the Tender Price is below the Buy-Back Price.

Shareholder 3 (Final Price Tender) would not be subject to scale back, as the Buy-Back Price is not the lowest price in the range.

34.80 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.8 for an explanation of how the Buy-Back Price will be determined.

Example 2

As an illustration of the scale back process, assume the Buy-Back Price is \$4.80³, Telstra determines to buy back \$1,000 million worth of Shares, and the following Tenders are received:

	Tender Prices	Value of Shares tendered (at Buy-Back Price)	Total value of Shares tendered
Final Price Tenders and Tenders 'below' the Buy-Back Price	Final Price Tender \$4.20 $\mathcal{L}(\mathcal{S})$	3500m 4110m \$188m	$$798m$ – $= $1,200m$
Tenders 'at' the Buy-Back Price	\$4.80 (Buy Back Price)	540200	> \$1,000m (so scale 5402m back applies)
Tenders 'above' the Buy-Back Price	A and the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the co 35.20 35.40 L	\$570m 36/5m %840m

The value of Tenders received 'at' and 'below' the Buy-Back Price (including Final Price Tenders) is greater than the amount of capital Telstra has determined to buy back, therefore the scale back applies:

	Amount bought back
Final Price Tenders and Tenders 'below' the Buy-Back Price are accepted in full	\$798m
Tenders 'at' the Buy-Back Price (other than Excluded Tenders) are scaled back by 50% so that no more than \$1,000m is bought back in total (and Telstra may make a \$2m acquisition of Shares tendered in Excluded Tenders)	\$200m (of \$400m) \$2m (Excluded Tenders)
Tenders 'above' the Buy-Back Price are rejected	-\$0m
Total	\$1,000m

For example, in the above circumstances, a shareholder tendering 5,000 Shares at the Buy-Back Price of \$4.80 would have 2,500 Shares bought back (5,000 x \$200m/ \$400m), or in other words the Tender would be scaled back by 50%.

As illustrated above, the percentage scale back will be calculated to take into account the acquisition. of Shares tendered in Excluded Tenders.

1.11 How will any scale back affect shareholders who hold a relatively small number of Shares?

The scale back mechanism will not apply to any shareholder who tenders all of their Shares at the Buy-Back Price, below the Buy-Back Price and/or as a Final Price Tender, and who would have 400 Shares or less as a result of scale back.

If the Buy-Back Price is the lowest price in the rangeand there is a scale back, the Priority Allocation will be bought back from each shareholder who tendered more than the Priority Allocation at the Buy-Back Price. and/or as a Final Price Tender, and all of the Shares tendered at the Buy-Back Price and/or as a Final Price-Tender will be bought back from each shareholder who tendered, in aggregate, the Priority Allocation or less at the Buy-Back Price and/or as a Final Price Tender.

If you want to reduce the likelihood of any scale back applying to your Tender, you should lodge a Final Price. Tender. Final Price Tenders will only be scaled back if the total number of Shares tendered at the lowest price in

the range and as final Price Tenders is more than the total number of Shares Telstra determines to buy back.

1.12 Shareholders with 400 Shares or less

If you hold 400 Shares or less, you may only lodge one Tender, for all of the Shares you want to tender, either at one of the specified prices or as a Final Price Tender. You cannot split your holding and tender different parcels of your Shares at different prices.

1.13 How does the Buy-Back compare to selling my Shares on the stock market?

Depending on your individual circumstances, the Australian income taxation consequences for you if you successfully participate in the Buy-Back may be different than if you sold your Shares on-market (see section 2 for more details). Also, to execute a share sale on the ASX you usually need to appoint a broker and pay brokerage. Issuer Sponsored Holders do not need to appoint a broker or pay brokerage to participate in the Buy-Back. Brokers usually do not charge CHESS holders to process tenders in a buy-back.

However, you may be able to sell your Shares for a higher price on the ASX. Telstra's market price on the ASX may be, or may move, higher than the Buy-Back Price during or after the Tender Period. It may also vary significantly in the future. By making the Invitation and in setting the tender range, Telstra is not making any recommendation or giving any advice on the value of your Shares, or whether (or how) you should sell your Shares.

Before you decide what to do with your Shares, Telstra strongly recommends that you seek professional advice.

1.14 How have Telstra Shares performed over recent times?

The closing price of Telstra Shares on the ASX on Thursday, 2 October 2003, being the last day before Telstra announced full details of the Buy-Back, was \$4.83.

Telstra's highest and lowest market sale prices during each of the preceding four months were as follows:

Month	Low	High	Volume Weighted Average Price
July 2003	\$4.38	\$4.84	\$4.63
August 2003	\$4.63	\$5.05	\$4.77
September 2003	\$4.71	\$5.16	\$4.86
October 2003*	\$4.71	\$4.84	\$4.78

NOTES: "High and low market prices up to October 2, 2003.

A graph indicating the Share price performance of Telstra over the period from January 2002 to 2 October 2003 is set out below.

1.15 How do I participate in the Buy-Back?

Step 1 - Decide how many Shares you wish to sell To participate in the Buy-Back, you first need to decide how many Shares you wish to sell.

The personalised Tender Form enclosed with this booklet sets out the maximum number of Shares you can tender in the Buy-Back. You may tender any

number of Shares up to this maximum number. You should not, before the Buy-Back Date, sell or offer to sell to others the Shares you have tendered in the Buy-Back, unless you first withdraw or amend your Tender (see section 1.16).

Step 2 - Decide your Tender Price(s)

Once you have determined the number of Shares you wish to sell, you need to indicate the price, or prices, at which you are willing to sell these Shares (the Tender Price(s)).

If you hold 400 Shares or less, all the Shares you wish to sell must be tendered either at one of the specified prices (from \$4.20 to \$5.40 per Share set out on the Tender Form) or as a Final Price Tender (see section 1.8). You cannot split your holding and tender different parcels of your Shares at different Tender Prices.

If you hold more than 400 Shares, you may tender the Shares you wish to sell at one of the specified prices (from \$4.20 to \$5.40 per Share set out on the Tender Form) or as a Final Price Tender. You may also tender different parcels of the Shares you wish to sell at different Tender Prices. For example, you may tender one third of the Shares you wish to sell at the specified price of \$4.80, one third at the specified price of \$4.20 and one third as a Final Price Tender. However, you may not tender the same Shares at different Tender Prices. Each parcel of Shares tendered at a different Tender Price is a separate Tender.

Step 3 -- Submit your Tender(s)

All shareholders on the Australian register The way you complete Step 3 will depend on the type of holding you have. This will be specified on your Tender Form.

(a) Issuer Sponsored Holdings

Once you have determined the number of Shares you wish to sell and your Tender Price(s), you need to complete and sign your personalised Tender Form and return it to the Telstra Share Registry.

Your completed Tender Form must be received by the Telstra Share Registry by 7pm Melbourne time on Friday, 21 November 2003 at:

If sending by mail $\cdots$ If hand delivering
from within Australia
Telstra Buy-Back Tender, OR, Telstra Share Registry
Reply Paid 78462 :: CJ- ASX Perpetual :-
Melbourne VIC 8060 Registrars Limited
Level 4, 333 Collins Street
Melbourne VIC 3000 from outside Australia
Telstra Share Registry
Locked Bag 5100.
Melbourne VIC 8060

You can use the enclosed reply-paid envelope if you are posting in Australia.

Your Tender Form may not be accepted by Telstra unless it is actually received at either of the above addresses by 7pm Melbourne time on Friday, 21 November 2003. You should allow sufficient time for this to occur if you are sending your Tender Form by mail.

(b) CHESS Holdings

Once you have determined the number of Shares you wish to sell and your Tender Price(s), you need to instruct your controlling participant (normally your broker) in sufficient time for them to process your Tender no later than 7pm Melbourne time on Friday, 21 November 2003. The name of the controlling participant who manages your CHESS Holding as at the Buy-Back record date is printed on your Tender Form.

You should not send your Tender Form to the Telstra Share Registry.

If you are a CHESS Holder, you may receive written confirmation from CHESS of the Tenders made on your holding by your controlling participant. Irrespective of its wording, this confirmation is not an acceptance by Telstra of any Tender.

All shareholders on the New Zealand register If you hold Shares on the New Zealand register you must submit your completed and signed Tender Form. by mail to: BK Registries Limited, PO Box 384, Ashburton, New Zealand so that it is received no later than 7pm New Zealand time on Friday, 21 November 2003.

1.16 Can I withdraw or amend my Tender?

Once you have submitted a Tender, you may only withdraw or amend your Tender by following the procedures set out below.

All shareholders on the Australian register. (a) Issuer Sponsored Holdings

Withdrawal of Tenders

You may withdraw all of your Tenders by ticking the "Withdrawal" box on the Withdrawal/Amendment Form at the back of this booklet, completing your shareholder details, signing the form and sending it to the Telstra Share Registry at the address provided so that it is received no later than 7pm Melbourne time on Friday, 21 November 2003.

Amendment of Tenders

If you wish to change the terms of all or some of your Tenders or you wish to withdraw some (not all) of your Tenders, you must tick the "Amendment" box on the Withdrawal/Amendment Form at the back of this booklet, complete your shareholder details, complete the details of all of your Tenders on that form in accordance with the instructions shown on it and send it to the Telstra Share Reaistru as specified above so that it is received no later than 7pm Melbourne time on Friday, 21 November 2003.

The effect of amending your Tenders by submitting a Withdrawal/Amendment Form will be to withdraw all of your Tenders and replace them with the Tenders detailed on that form. On the Withdrawal/Amendment Form you will need to complete the details of all of the Tenders you wish to submit as if you had not previously submitted them.

(b) CHESS Holdings

If you have a CHESS Holding, you will need to instruct your controlling participant in sufficient time for them to process your amendment or withdrawal no later than 7pm Melbourne time on Friday, 21 November 2003.

You should not send a Withdrawal/Amendment Form to the Telstra Share Registry.

The effect of your controlling participant withdrawing or amending one or more of your Tenders will be to

withdraw those Tenders, and in the case of an amendment, to replace the amended Tenders with new Tenders.

If you are a CHESS Holder, you may receive written confirmation from CHESS of the withdrawals/ amendments made on your holding by your controlling participant. Irrespective of its wording, this confirmation is not an acceptance by Telstra of any Tender.

All shareholders on the New Zealand register Withdrawal of Tenders

You may withdraw all of your Tenders by ticking the "Withdrawal" box on the Withdrawal/Amendment Form at the back of this booklet, completing your shareholder details, signing the form and sending it to BK Registries Limited at PO Box 384, Ashburton, New Zealand so that it is received no later than 7pm New Zealand time on Friday, 21 November 2003.

Amendment of Tenders

If you wish to change the terms of all or some of your Tenders or you wish to withdraw some (not all) of your Tenders, you must tick the "Amendment" box on the Withdrawal/Amendment Form at the back of this booklet, complete your shareholder details, complete the details of all of your Tenders on that form in accordance with the instructions shown on it and send it to BK Registries Limited at PO Box 384, Ashburton, New Zealand so that it is received no later than 7pm New Zealand time on Friday, 21 November 2003.

1.17 How can I obtain additional Tender and Withdrawal/Amendment Forms?

All shareholders on the Australian register If you require any replacement Tender Forms or additional Withdrawal/Amendment Forms, please call the Telstra Buy-Back enquiry line on 1300 305 385

within Australia or +61 (3) 9615 9199 if you are calling from outside Australia.

All shareholders on the New Zealand register If you require any replacement Tender Forms or additional Withdrawal/Amendment Forms, please call the Telstra Buy-Back enquiry line on 0800 835 7872 within New Zealand or +64 (3) 308 8887 if you are calling from outside New Zealand.

1.18 How will I receive payment for Shares bought back?

If you have an existing direct credit authority for the payment of dividends on your Shares recorded on the Telstra share register at 7pm on Friday, 21 November 2003, all proceeds due to you under the Buy-Back will be credited to your nominated bank account. In all other cases Telstra will send you a cheque for the proceeds in Australian dollars. Proceeds paid by direct credit to shareholders on the New Zealand register will be converted to \$NZ at a rate determined by Telstra on Friday, 21 November 2003.

Cheques and direct credit advices will be sent, at your risk, by mail addressed to you at your address as shown on the Telstra share register at 7pm on Friday, 21 November 2003.

Payments to bank accounts and dispatch of cheques will be completed by Friday, 12 December 2003. Payments to the accounts and the dispatch of cheques to the addresses specified above will satisfy Telstra's obligation to pay you for any Shares bought back.

1.19 Will I still receive the 2002/2003 final dividend if my Shares are bought back?

Yes. All shareholders with an entitled registered holding on 26 September 2003 will receive the 12c per Share fully franked final dividend, whether or not they participate in the Buy-Back.

1.20 Can I still vote at the Annual General Meeting if I tender my Shares to Telstra?

Yes. Shareholders who tender their Shares to Telstra will still be entitled to vote in respect of those Shares (in accordance with the voting rights attached to those Shares) at the AGM on Friday, 14 November 2003,

and at any other general meeting that is held before the Closing Date.

1.21 Can I trade my Shares after submitting a Tender?

You should not sell or offer to sell the Shares you have tendered in the Buy-Back.

Once you have submitted a Tender, the number of Shares you have tendered will be locked and placed in a "subposition" in the Telstra share register. You will not be able to successfully deal with those Shares until those Shares are released from the subposition. For the Shares to be released from the subposition you must withdraw or amend your Tender in accordance with the procedures set out in this booklet.

Withdrawals or amendments made in accordance with these procedures may not take immediate effect. You should take this into consideration if you wish to sell or offer to sell any of the Shares in respect of which you have submitted a Tender. If you sell or offer to sell any Shares after you submit a Tender, and at the Buy-Back Date you do not hold at least the number of Shares you have tendered, Telstra may, in its absolute discretion, reject your Tender(s) or treat your Tender(s) as if you had tendered the number of Shares held by you at the Closing Date (see sections 4.11 and 4.13 for further detail).

1.22 Note to shareholders located in the United States

If you are a shareholder located in the United States, you should be aware that the disclosure requirements regarding the Buy-Back are different from the requirements that would apply if the Buy-Back was for shares of a United States company. Furthermore, because most of Telstra's directors and executive officers reside outside the United States and all or a substantial portionof the assets of these persons and a substantial portion of Telstra's assets are located outside the United States, it may not be possible for shareholders to effect service of process within the United States upon such persons or to enforce against them judgments obtained in United States courts predicated upon the civil liability provisions of the federal securities laws of the United States.

2. Australian tax implications for shareholders

The following discussion is intended only as a general summary of the Australian income tax implications of participating in the Buy-Back.

Unless otherwise specified, this discussion is based on income tax legislation and administrative practice as at 3 October 2003. These laws, the interpretation of them by the courts, and administrative practice may change at any time, possibly with retrospective effect. Telstra has applied for a Class Ruling from the ATO for shareholders who participate in the Buy-Back which is expected to provide confirmation of a number of the statements contained in this summary. Whilst it is not anticipated to be the case, it is possible that the Class-Ruling issued by the ATO may express a view contrary to that set out below.

Some shareholders, for example those who carry on a business in dealing with shares, may be assessed on their dealings in shares other than under the CGT provisions. The tax consequences for those shareholders may alter significantly from those discussed below.

If you decide to participate in the Buy-Back, your particular tax treatment will depend on your own circumstances.

It is, therefore, important that you seek professional tax advice to take into account your particular circumstances.

Introduction

The Buy-Back will constitute an "off-market" buy-back for tax purposes. Telstra has received confirmation from the ATO that all of the Buy-Back Price in excess of \$1.50 will be treated as a frankable distribution (which will be fully franked by Telstra).

A shareholder participating in the Buy-Back should be taken, for CGT purposes, to have disposed of their Shares when Telstra accepts the Tender. This is anticipated to be no later than 25 November 2003.

2.1 Australian resident individual

Income Tax - Treatment of franked distribution An Australian resident individual participating in the Buy-Back will be deemed to have received a franked distribution equal to the difference between \$1.50 and the Buy-Back Price.

The shareholder will be required to include in their assessable income the amount of the franked distribution together with the franking credit on the franked distribution.

The shareholder should be entitled to a tax offset equal to the franking credit. This tax offset may reduce the total tax payable by the shareholder on their taxable income. If the tax offset exceeds the total tax payable by the shareholder on their taxable income, the shareholder may be entitled to a refund of that excess. The tax offset may not be available in certain circumstances. This is discussed in Section 2.5.

Capital Gains Tax - Disposal of Shares A resident individual participating in the Buy-Back will be deemed for CGT purposes to have disposed of each Share for capital proceeds of \$1.50. This is irrespective of the Buy-Back Price. Generally, the CGT cost base for a Share will be the amount the shareholder paid to acquire the Share together with certain incidental costs of acquisition, for example stamp duty and brokerage, and certain incidental costs of disposal.

There are specific rules to determine the cost base for Shares acquired by Telstra employees under the Telstra-Employee Share Ownership Plans. Class Ruling CR 2001/28 deals with the determination of the cost base for certain Telstra employees who acquired their Shares under TESOP 97 and TESOP 99.

A capital loss for a Share disposed of under the Buy-Back will be the excess of the CGT cost base of the Share over the deemed capital proceeds of \$1.50. This is irrespective of the Buy-Back Price. No allowance for indexation is made in determining the cost base for the Share for this purpose.

The capital loss which arises under the Buy-Back may be greater than the capital loss which may have arisen under an equivalent sale of the Shares on-market. This is because the capital proceeds under the Buy-Back are deemed to be \$1.50 rather than the price at which the shareholder sold their Shares.

This also means that any capital gain which would have otherwise arisen on disposal of the Shares is reduced.

A capital loss that arises from the Buy-Back can only be used to offset capital gains made by the individual shareholder. Capital losses not used may be carried forward to be used later.

Any capital loss arising from the Buy-Back cannot be offset against the franked distribution and franking credit included in the shareholder's assessable income from the Buy-Back.

The table below provides illustrative examples of the potential tax consequences for an Australian resident individual disposing of their Shares under the

Buy-Back. The tax consequences will depend on the Buy-Back Price, the individual's applicable marginal tax rate and their CGT cost base for the Shares.

It is important to understand that the table is an $\cdots$ example only and is based on a number of assumptions. including an assumed Buy-Back Price which may not $\sim$ be the actual Buy-Back Price. The actual Buy-Back Price and the amount of the franked distribution will not be known until after the Buy-Back closes. The tax . consequences for an individual may be different. because of their particular circumstances.

	Your income \$6.001-\$21.600 18.5%'	Your income \$21.601-\$52.000 31.5%	Your income \$52.001-\$62.500 43.5%1	Your income \$62,501+ 48.5%*
Income tax consequences	ł,	Ì,	٦	\$
Illustrative Butj-Back Price?	4.80	4.80	4.80	4.80
Less: Deemed capital proceeds	150	1.50	1.50	1.50
Assumed franked distribution in Bug-Back Price	3.30	3.30	330	3.30
Add: gross up for franking credit	141	1.41	3.41	1.41
Assessable income	4.71	4.71	471	4.71
Tax on assessable income	(OOM	(1.48)		(2.28)
Tax offset	141	1.41	141	1.41
Net tax offset/(Tax payable) on franked distribution in Buy-Back Price	0.44	(0.07)	(0.64)	(0.87)
Capital gains tax consequences	Ł Ś. Ł	\$ Š. \$	T. Š. Ť.	\$ \$ \$
Deemed capital proceeds	1.50 _z 1.60 150	1.50 1.50 1.50	7 50 1.50 1.50	1.50 1.50 1.50
l ess-illustrative cost base	5.00 3.30 7.40	3.30 5.00 7.40	5.00 740 3.30	3.30 5.00 7.40
Total capital loss arising from disposal under Buy-Back ²	$(3.50)$ $(5.90)$ (1.80)	$(3.50)$ $(5.90)$ (1.80)	(180) (150) (590)	$(1.80)$ $(3.50)$ (5.90)
Reduction in capital gain which would arise on disposal of shares (other than under the Buy-Back)	all all 1.50	nil 1.50 míl	1.50 小说 .nil.	nil nil 1.50

Example of tax consequences per Share for Australian resident individuals participating in the Buy-Back (based on an illustrative Buy-Back Price of \$4.80)

i The tax rate used includes the Medicare Levy. The Medicare Levy depends on the individual's own circumstances, it is assumed that the Medicare Levy rate is 1.5%. 2 \$4.80 is used for illustrative purposes only. You should not rely on this price as being the Buy-Back Price. The procedure to determine the Buy-Back Price is explained in Section 1.8.

.) The capital loss which arises under the Buy-Back may be greater than the capital loss which may have arisen under an equivalent sale of the Shares on-market. This is because the capital proceeds under the Buy-Back are deemed to be \$1.50.

2.2 Australian resident company

Income Tax - Treatment of franked distribution An Australian resident company participating in the Buy-Back will be deemed to have received a franked distribution equal to the difference between \$1.50 and the Buy-Back Price.

The shareholder will be required to include the franked distribution in their assessable income, together with the franking credit on the franked distribution.

The shareholder should be entitled to a tax offset equal to the franking credit. No refund will be available to the extent that the tax offset exceeds the tax payable by the shareholder. A franking credit (equal to the franking credit on the franked distribution) will also arise in the franking account of the shareholder. The tax offset may not be available in certain circumstances. This is discussed in Section 2.5.

Capital Gains Tax - Disposal of Shares

The Minister for Revenue and Assistant Treasurer issued a Press Release on 27 September 2002 indicating that further amendments to the imputation provisions to apply from 1 July 2002 would be introduced into Parliament as soon as practicable. It is possible that these amendments may, amongst other things, affect the CGT treatment of an Australian resident company participating in the Buy-Back. The impact of any amendments will depend upon the form of the legislation enacted.

The amendments may mean that a capital loss may only arise to the extent that the CGT cost base of the Shares exceeds the Buy-Back Price (rather than the capital proceeds of \$1.50). No allowance for indexation is made in determining the cost base for the Shares for this purpose.

If no amendments are made to the legislation, the position may be different. Accordingly, it is very important that Australian resident companies seek their own independent taxation advice before participating in the Buy-Back.

2.3 Australian complying superannuation fund

Income Tax - Treatment of franked distribution An Australian complying superannuation fund participating in the Buy-Back will be deemed to have

received a franked distribution equal to the difference between \$1.50 and the Buy-Back Price.

The shareholder will be required to include in their assessable income the amount of the franked distribution, together with the franking credit on the franked distribution.

Capital Gains Tax - Disposal of Shares An Australian complying superannuation fund participating in the Buy-Back will be deemed for CGT purposes to have disposed of each Share for capital proceeds of \$1.50. This is irrespective of the Buy-Back Price. Generally, the CGT cost base for a Share will be the amount the shareholder paid to acquire the Share together with certain incidental costs of acquisition, for example stamp duty and brokerage, and certain incidental costs of disposal.

A capital loss that arises from the Buy-Back can only be used to offset capital gains. Capital losses not used may be carried forward to be used later.

Any capital loss arising from the Buy-Back cannot beoffset against the franked distribution and franking credit included in the shareholder's assessable income.

2.4 Non-residents

Income Tax - Tax treatment of franked distribution A non-resident shareholder will not be liable to Australian withholding tax on any part of the Buy-Back Price.

Capital Gains Tax - Disposal of Shares An Australian CGT liability should not arise for a non-resident participating in the Buy-Back unless the non-resident together with its "associates" has at any time in the preceding five years held 10% or more of the issued shares of Telstra.

2.5 Limits on Availability of Franking Credits and Tax Offsets

The Australian tax legislation includes a number of rules which may deny shareholders participating in the Buy-Back from claiming the benefit of tax offsets arising from the franked distribution component of the Buy-Back Price.

These rules are designed to, amongst other things, discourage trading in franking credits.

Where the rules apply, a shareholder may be denied the benefit of tax offsets and franking credits on the franked distribution deemed to have been received under the Buy-Back. These rules may deny the benefit of tax offsets and franking credits to shareholders generally, or because of their particular circumstances.

Telstra is seeking confirmation from the ATO in the Class Ruling that the ATO will not make a determination to deny shareholders generally the benefit of tax offsets on the franked distribution under the Buy-Back.

The particular circumstances of the shareholder will also be relevant in determining whether the rules deny the benefit of the tax offset or franking credit. For example, the period which the shareholder holds the Share and any arrangements the shareholder has inrelation to the Share will be important.

Generally, resident shareholders should have regard to the operation of the holding period rule ("the 45 day rule") in relation to their participation in the Buy-Back. Shareholders who are individuals and whose total franking credit entitlement for the income year does not exceed \$5,000 will not be subject to the 45 day rule.

As a result of some recent changes to the law this exemption may not be available. However, the Treasurer in a Press Release dated 27 September 2002 indicated that the Government intends to amend the law to ensure that this exemption continues to be available.

In simple terms, the 45 day rule requires a resident shareholder in certain circumstances to have held their Shares "at risk" for a specified period in order to

"qualify" for the franking credit on the franked distribution. This would include the franked distribution of the Buy-Back Price.

The 45 day rule requires that shareholders must hold their Shares at risk for a period of 45 days (excluding the days of acquisition and disposal) within a period beginning on the date those Shares were acquired and ending 45 days after the Shares become ex-dividend.

The 45 day rules are complex. Generally, a shareholder who is subject to the rules and has acquired their Shares after 8 October 2003 would fail the 45 day rule in respect of the franked distribution component of the Buy-Back Price. This is on the basis that the determination of the Buy-Back allocations (including any scale back) occurs on 23 November 2003. In that case, shareholders whose Shares are bought back will hold their Shares at risk until 23 November 2003, uponwhich date the Shares will no longer be at risk.

A shareholder may fail the requirements of the 45 day rule even if the shareholder acquired their Shares on or before 8 October 2003. This may arise where the shareholder has entered into other arrangements regarding the Shares. For example, granting an optionto another person to acquire their Shares.

The 45 day rule also operates on a last-in-first-out basis so that a shareholder will be deemed to have disposed of under the Buy-Back their most recently acquired Shares for the purpose of applying the 45 day rule. Generally, if the most recently acquired Shares were acquired after 8 October 2003, the shareholder may not qualify for the franking credit on the franked distribution. deemed to have been received by a shareholder participating in the Buy-Back.

If the Buy-Back allocation occurs on a day other than 23 November 2003, these dates may alter. Telstra can give no assurance that the Buy-Back allocation will occur on 23 November 2003.

In addition, where the Shareholder is under an obligation to make related payments in respect of the franked distribution arising on the Buy-Back Price, the shareholder may not qualify for the tax offset or franking credit.

3. Effect of the Buy-Back on Telstra

As at 30 June 2003, Telstra had on issue 12,866.6 million Shares. Assuming \$1,000 million worth of Shares are bought back at a Buy-Back Price of \$4.80¹, 208.3 million Shares (approximately 1.6% of all Shares on issue) would be transferred to Telstra and cancelled U

The table below sets out the Telstra Group debt and total shareholders' equity as at 30 June 2003 and post the Buy-Back (assuming 208.3 million Shares are bought back). The amount by which the Buy-Back Price exceeds the amount debited to contributed equity (\$1.50 per Share), will be debited to retained profits. For example, if the Buy-Back Price is \$4.80', an amount of \$3.30 per Share will be debited to retained profits.

Debt and total shareholders' equitu	Reported as at 30 June 2003 Sm	Pro-forma as at 30 June 2003* \$m
Debt
Gross debt"	12,272	12,772
Net debt°	10,972	11,972
Shareholders' equity
Contributed equity*	6,433	6,121
Reserves	(150)	(150)
Retained profits"	9,137	8,449
Shareholders' equity available to Teistra shareholders	15,420	14,420
Total outside equity interests	2	2
Total shareholders' equity	15,422	14,422
Gross debt to capitalisation (%) $\cdot$	ksls. 3%	47.0%
Net debt to capitalisation (%) ^d	41.6%	45.4%

a. Pro-forma calculations assume the Bug-Back Price is \$4.80 and the number of Shares bought back is 208.3 million.

b. \$1.50 of the Buy-Back Price will be debited to contributed equity and the assumed balance of \$3.30 per Share will be debited to retained profits. Indidental costs of the Bug-Back have been excluded because they will be insignificant to the pro-forma calculations.

c. Based on gross debt (total current and non-current borrowings) as a percentage of gross debt plus shareholders' equity.

d. Based on net debt (grass debt less Liquid Interest-Bearing Assets) as a percentage of net debt plus shareholders' equity.

e. Assumes the 80y-Back is funded by \$500 million liquid assets and \$500 million. short term funding facilities. For the purposes of calculating the pro-forma gross and net debt, employees who purchased shares with an interest-free loan under TESOP 97 or TESOP 99 are assumed not to participate in the Buy-Back.

The Board and management continuously review Telstra's capital structure and its target parameters to achieve an appropriate balance between deployment of capital in existing businesses and strategic investments, and distribution of surplus capital to shareholders. It aims to ensure Telstra maintains an efficient but prudent capital structure. Following the Buy-Back, Telstra expects to remain within its target parameters for gearing and interest cover.

While the precise impact of the Buy-Back cannot be determined until the Buy-Back Price and the size of the Buy-Back is known, the Buy-Back is expected to improve Telstra's earnings per share and return on equity.

The amount of franking credits that Telstra will pass on to shareholders under the Buy-Back will not be known until the Buy-Back Price and the total size of the Buy-Back are determined. In any event, Telstra expects to be able to continue to fully frank its dividends for the foreseeable future.

3.1 How will the Buy-Back be funded?

The Buy-Back will be funded from liquid assets and short term funding facilities. The maximum amount Telstra will pay out under the Buy-Back is approximately \$1,000 million.

The Board believes that after the Buy-Back Telstra will remain strongly capitalised. The Buy-Back will not prejudice Telstra's ability to take advantage of foreseeable profitable opportunities.

3.2 What effect will the Buy-Back have on Telstra's issued Shares?

As at 30 June 2003, Telstra had on issue 12,866.6 million Shares. Assuming a total of \$1,000 million worth of Shares are bought back, the table below sets out the number of Shares and the percentage of total issued Shares which would be bought back at different Buy-Back Prices. All Shares that Telstra buys back will be cancelled.

1\$4.80 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.8 for an explanation of how the Buy-Back Price will be determined.

Specified Buy-Back Prices	Number of Shares Bought Back (million)	% of Total Issued Shares
\$4.20	238.1	1.85%
\$4.40	227.3	1.77%
\$4.60	217.4	1.69%
\$4.80	208.3	1.62%
\$5.00	200.0	1.55%
\$5.20	192.3	1.49%
\$5.40	185.2	1.44%

3.3 What effect will the Buy-Back have on control of Telstra?

The Commonwealth currently holds 50.1% of all Telstra Shares and has decided that it will not participate in the Buy-Back. Assuming \$1,000 million worth of Shares are bought back at \$4.80³, the Commonwealth's shareholding will increase to 50.9% after the Buy-Back is completed.

Having regard to the Commonwealth's holding and to Telstra's otherwise widely held shareholding, the Buy-Back is not expected to have any change of control implications for Telstra.

3.4 Full year results

On 28 August 2003, Telstra announced its full year results for the year ending 30 June 2003. EBIT decreased by 7.9% to \$5.7 billion and profit after income tax and minorities decreased by 6.3% to \$3.4 billion. The decrease in reported earnings was largely attributed to the \$965 million non-cash write down of the investment in Telstra's 50% owned joint venture, Reach Ltd.

Free cash flow increased by 18.9% to \$4,565 million as a result of higher proceeds from asset and investment sales and a decrease in capital expenditure.

The Telstra Board announced an increased final ordinary dividend of 12 cents, up 9.1% on last year. Including the 3 cent special dividend announced with the interim results, the total annual dividend to shareholders was 27 cents per share, up 22.7%. The total dividend for the year was \$3.5 billion dollars.

Electronic copies of the Annual Report and Annual Review can be found at www.telstra.com.au/investor. Shareholders can also contact the Telstra Share Registry on 1300 88 66 77 and ask for a hard copy to be sent to them.

3.5 Outlook for 2003/2004

While aggregate industry revenue growth remains near 4% per annum, and industry restructuring and technology change continue apace, the outlook for the year ahead is for a slight improvement on conditions experienced in the past year, but quarterly trends may remain volatile.

Telstra anticipates that in 2003/2004:

its revenue will be higher than in 2002/2003, but probably below aggregate industry growth levels;
any cost growth will be kept below revenue growth;
EBIT and EBITDA margins (as a percentage of revenues) will be higher;
planned domestic capital expenditure will be approximately \$2.9 billion; and
quarterly service trends will improve.

In the context of this outlook, trading results for the first quarter of the 2003/2004 year have been in line with Telstra's expectations.

Telstra will release its 2003/2004 First Quarter Market Update on 21 October 2003. Electronic copies of this release and other Telstra ASX announcements can be found at www.telstra.com.au/investor.

4. Additional information on the Buy-Back

This section sets out further details of the Buy-Back including important information for joint shareholders, trustees and nominees.

4.1 Size of the Buy-Back

ASIC has granted Telstra an exemption under subsection 257D(4) of the Corporations Act to permit Telstra to conduct the Buy-Back as an equal access scheme. Further details of the exemption granted by ASIC are set out in section 4.15.

Under the Corporations Act, Telstra may, without shareholder approval, buy back any number of Shares under an equal access scheme, provided that the number of voting shares bought back in the Buy-Back and in any other buy-back conducted in the last 12 months, does not exceed 10% of the smallest number, at any time during the 12 months preceding the Buy-Back, of votes attaching to Telstra's voting shares. Although this limit would permit it to buy back around 1,286.7 million Shares, Telstra will not buy back more than 260 million Shares under this Buy-Back, and retains the discretion to buy back any lesser number of Shares.

4.2 Restrictions on Tender acceptances

Telstra will not accept any Tender which it may not lawfully accept or which, if accepted, would give rise to an illegal or unenforceable Buy-Back Contract or a Buy-Back Contract which Telstra cannot otherwise lawfully perform.

Section 8AB of the Telstra Corporation Act 1991 provides that the Commonwealth must retain the majority ownership (50.1%) of Telstra. Although the Commonwealth Government has decided that the Commonwealth will not participate in the Buy-Back, an Invitation will be made to the Commonwealth as one of Telstra's shareholders. To the extent necessary, Telstra will not accept any Tender from the Commonwealth, if acceptance would cause a contravention of the Telstra Corporation Act 1991.

Section 8BH of the Telstra Corporation Act 1991 prohibits an "unacceptable foreign ownership situation" in relation to Telstra. In general, such a situation would arise if foreign persons held more than 35% of Telstra's non-Commonwealth owned Shares or any one foreign person held more than 5% of Telstra's non-Commonwealth owned Shares. To the extent necessary, Telstra will not accept any Tender or apply the scale back mechanism if acceptance or the

application of the scale back mechanism would cause. a contravention of the Telstra Corporation Act 1991.

This Invitation is not made to persons to whom the Invitation may not lawfully be made, or to persons whose participation in the Buy-Back is not permitted under the laws of the jurisdiction in which they are resident. Without limiting the rights that Telstra otherwise has in relation to Tenders, a Tender submitted by such a person will not be accepted by Telstra.

4.3 Shareholders with more than one holding of Shares

You will receive a personalised Tender Form for each separate registered holding of Shares (for example, if you hold some Shares in your name and some Shares jointly with your spouse, you will receive two Tender Forms). You may tender Shares in the Buy-Back from any or all of your separate registered holdings provided that you complete the Tender Form and follow the instructions on each Tender Form for each holding you wish to tender. Any scale back that applies to Shares tendered from more than one of your registered holdings of Shares will be applied to each of those registered holdings as if they were held by different persons.

4.4 Joint shareholders

If you hold your Shares jointly with another person (for example, your spouse) you must complete and return the Tender Form in accordance with the instructions for joint holdings on the Tender Form.

4.5 Shares held by Trustees and Nominees and American Depositary Receipt (ADR) holders

Trustees and nominees who hold Shares should inform the beneficial owners of the Shares about the Buy-Back and then aggregate all Tenders received from beneficial owners. It is the responsibility of the trustee or nominee to complete an aggregated Tender Form. on behalf of all beneficial owners.

Any scale back that applies to Shares tendered by trustees or nominees will be performed on a registered shareholder basis.

If you hold American Depositary Receipts (ADRs)

representing Shares, you will separately receive additional information regarding how to instruct the ADR depositary to tender your Shares if you wish to participate in the Buy-Back.

4.6 Margin lending arrangements

If you hold Shares under margin lending arrangements or if they are held as security for a loan or as OCH collateral, you should ensure that your participation in the Buy-Back is permitted by those margin lending arrangements, that loan documentation or by OCH.

4.7 Shareholders who receive a pension or allowance

The effect your participation in the Buy-Back will have on your pensions or allowances (or those of your dependents) will depend upon the value of the Shares bought back, and on the level of your other income and assets. It is possible that your pension or allowance payments will not be affected at all because the social security income and assets tests allow you to have income and assets up to certain amounts without any reduction in payment. It will depend upon your particular circumstances. If you are in any doubt as to the action you should take, you should consult your professional adviser immediately.

4.8 Restrictions on the payment of Buy-Back proceeds

Telstra will pay shareholders the Buy-Back Price for each of their Shares that are bought back, unless it is prohibited from doing so.

Telstra is currently prohibited from making payments to certain political regimes, terrorist organisations and their sponsors under the Banking (Foreign Exchange) Regulations 1959, the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002 and the Iraq (Reconstruction and Repeal of Sanctions) Requlations 2003.

4.9 Rights under this Invitation cannot be transferred

You cannot transfer your rights under this invitation. Those rights are personal to you.

4.10 The effect of submitting a Tender

A Tender constitutes an offer to sell the tendered Shares to Telstra on the terms and conditions set out in the Buy-Back Documents. A Tender does not, of itself, constitute a binding contract for the sale of the tendered Shares and cannot be enforced against Telstra. Telstra retains the discretion to accept or reject any Tender, and may choose to reject all Tenders. If Telstra accepts your Tender, a binding Buy-Back Contract is formed between you and Telstra, and you must sell the tendered Shares back to Telstra on the terms and conditions set out in the Buy-Back Documents including the terms and conditions set out below.

By submitting a Tender Form, you:

offer to sell to Telstra on the Buy-Back Date the number of Shares nominated for sale on your Tender Form (adjusted in accordance with the terms and conditions set out in the Buy-Back Documents) at your Tender Price(s);
agree that Telstra's announcement on the Buy-Back Date is effective notice or communication of Telstra's acceptance of those of your Tenders which are submitted at or below the Buy-Back Price or as a Final Price Tender (adjusted in accordance with the terms and conditions set out in the Buy-Back Documents) and which are submitted in accordance with the Buy-Back Documents (or treated by Telstraas being so submitted) and which are not rejected by Telstra, and Telstra's rejection of any of your Tenders above the Buy-Back Price. You waive any requirement to receive further notice or communication from Telstra of its acceptance or rejection of any Tender submitted by you;
warrant to Telstra that at any time you tender your Shares for sale in the Buy-Back, and on the Buy-Back Date, you are the registered holder of the Shares which you have tendered and that they are free from any mortgage, charge, lien or other encumbrance (whether legal or equitable) and from any third party rights;
authorise Telstra (and its officers, agents or contractors) to correct any error in or omission from your Tender Form or your Withdrawal/Amendment Form and to insert any missing details;
undertake not to sell or offer to sell Shares to any other person if, as a result, you will at any time after you submit your Tender until the Buy-Back Date hold fewer Shares than the number of Shares you have tendered: and
undertake that, if you breach any of these covenants, undertakings, agreements or warranties you will indemnify Telstra for all its costs arising from the breach.

You will be taken to have submitted a Tender when the Telstra Share Registry receives your signed and validly completed Tender Form or, if you have a CHESS Holding, your Tender from your controlling participant through CHESS.

4.11 Telstra's rights to accept or reject Tenders and Tender Forms

At any time, Telstra may (at its sole discretion):

accept or reject any Tender or Tender Form; and
accept or reject a Tender not made on the terms and conditions set out in the Buy-Back Documents, or a Tender Form not submitted in accordance with the procedures set out in the Buy-Back Documents.

Telstra may do each of these things in relation to all or some of the Tenders or the Tender Forms it receives. in its absolute discretion.

4.12 Telstra's right to vary dates and times

Whilst Telstra does not anticipate changing any of the dates and times set out in the Buy-Back Documents (including, without limitation, the Closing Date and the Buy-Back Date), it reserves the right to do so without notifying you.

4.13 Telstra's right to adjust Tenders

You are entitled to sell in the Buy-Back the lesser of:

(a) the number of Shares registered in your name on Friday, 17 October 2003 (and, in accordance with the SCH Business Rules conferring an entitlement to participate in the Buy-Back); and
(b) the number of Shares you hold on the Buy-Back Date,

(your "Entitled Shares").

If you submit one Tender of more than your Entitled Shares and Telstra accepts your Tender, Telstra will buy back only the number of your Entitled Shares.

If you submit more than one Tender and, in aggregate, you have tendered more than your Entitled Shares, Telstra will buy back only the number of your Entitled Shares in the following order of priority:

(a) Telstra will first buy back your Entitled Shares from your Tender submitted at your lowest Tender Price which is at or below the Buy-Back Price; and
(b) if, after the application of (a), you have Entitled Shares remaining, Telstra will next buy back your Entitled Shares from your Tender submitted at your next lowest Tender Price which is at or below the Buy-Back Price and will repeat this process until all of your Entitled Shares tendered at or below the Buy-Back Price are bought back.

A Final Price Tender will be treated as a Tender at the lowest price in the range for the purposes of this provision.

4.14 Directors' entitlements

Directors are entitled to participate in the Buy-Back, but the Telstra Board has determined that Directors, Group Managing Directors and selected executives involved in implementing the Buy-Back should not participate in the Buy-Back. As at 3 October 2003, the Directors of Telstra held or had a relevant interest in the following securities in Telstra:

$Shars^1$
92,938
72,871
135,650
o
70.486
43,814
63.249
24.424
37.445
29,440
10,459
73.528

1. These relevant interests include interests in shares arising through superannuation. funds, trusts and joint or other ownership structures.
2 Teistra's non-executive directors do not hold options or similar equity based instruments in the company. The autstanding equity based instruments held by the Chief Executive Officer, Dr Zggmunt Switkowski, including performance rights/restricted shares, options and deferred remuneration plans are set outon page 41 of Telstra's 2003 Arinual Review.

4.15 ASIC and ASX Relief

ASIC has granted Telstra an exemption under subsection 257D(4) of the Corporations Act. This exemption permits Telstra:

(a) to conduct the Buy-Back similarly to the conduct of an equal access buy-back in accordance with Division 2 of Part 2J.1 of the Corporations Act;
(b) to use the scale back mechanism described in section 1.10:
(c) to invite all shareholders to offer for sale Shares in accordance with the terms and conditions set out in the Buy-Back Documents rather than Telstra offering to buy back such Shares;
(d) to invite the TESOP Trustee to submit a Tender of TESOP 97 Shares on behalf of a TESOP Participant only if that TESOP Participant has asked the TESOP Trustee to tender all of their TESOP 97 Shares at one of the specified prices within the range of \$4.20 and \$5.40, or as a final Price Tender (as required by the TESOP Buy-Back Document);
(e) to invite the TESOP Trustee to submit a Tender of TESOP 99 Shares on behalf of a TESOP Participant only if that TESOP Participant has:
(i) asked the TESOP Trustee to tender all of their TESOP 99 Shares at one of the specified prices within the range of \$4.20 and \$5.40, or as a Final Price Tender (as required by the TESOP Buy-Back Document); and
(ii) repaid the outstanding balance of their TESOP 99 Loan in accordance with the TESOP Buy-Back Document;
(f) to invite shareholders with 400 Shares or less to offer Shares for sale only if they submit one Tender at either a specified price in the range or as a Final Price Tender:
(g) to the extent necessary, not to accept any Tender from:
(i) the Commonwealth; or

(ii) any other shareholder,

if acceptance would cause a contravention of the Telstra Corporation Act 1991; and

(h) not to make an invitation to, or accept any Tender received from, any person to whom the Invitation may not lawfully be made, or to persons whose participation in the Buy-Back is not permitted under the laws of the jurisdiction in which they are resident.

The ASX has granted Telstra the following:

a waiver from Listing Rule 7.40 to permit Telstra to despatch the Buy-Back Documents to shareholders within 10 business days after the Buy-Back record date; and
a waiver from Listing Rule 3.8A to permit Telstra to lodge an Appendix 3F up to 2 business days after the Closing Date.

4.16 Privacy

Telstra is carrying out the Buy-Back in accordance with the Corporations Act. This involves the collection of personal information contained in Tender Forms to enable Telstra to process your Tender. If you do not provide this information, Telstra may be hindered in, or prevented from, processing your Tender.

The personal information collected by Telstra will only be disclosed to ASX Perpetual Registrars Limited in its capacity as share registrar of Telstra, to a print and mail service provider, to "lelstra's advisers in relation to the Buy-Back and to financial institutions in respect of payments to you in connection with the Buy-Back or as required or authorised by law.

If you wish to access the individual information collected by Telstra in relation to your shareholding, please write to Telstra, care of ASX Perpetual Registrars. Limited at the mailing address set out in the Tender Form.

5. Definitions and interpretation

$5.1$ Definitions

In the Buy-Back Documents unless the context otherwise requires:

AGM means the 2003 Annual General Meeting of Telstra shareholders.

ASIC means the Australian Securities & Investments Commission.

ASX means Australian Stock Exchange Limited.

ATO means the Australian Taxation Office.

Board or Teistra Board means the Board of directors of Telstra.

Buy-Back means the buy-back of shares by way of tender set out in the Buy-Back Documents.

Buy-Back Contract means the contract formed on the Buy-Back Date between you and Telstra if Telstra accepts your Tender.

Buy-Back Date means the date and time Telstra announces to the ASX the Buy-Back Price, the total number of Shares to be bought back and the details of any scale back.

Buy-Back Documents means this booklet, the Tender Form and the Withdrawal/Amendment Form.

Buy-Back Price means the price at which Telstra will buy back Shares from Tenders it accepts in the Buy-Back.

CGT means capital gains tax.

CHESS means the Clearing House Electronic Subregister System.

CHESS Holder means a holder of Shares on the CHESS subregister of Telstra.

CHESS Holding means a holding of Shares on the CHESS subregister of Telstra.

Closing Date means 7pm Melbourne time on Friday, 21 November 2003 for all shareholders on the Australian register, and 7pm New Zealand time on Friday, 21 November 2003 for all shareholders on the New Zealand register, unless the Board announces a later date.

Commonwealth means the Commonwealth of Australia.

Corporations Act means the Corporations Act 2001 (Commonwealth).

EBIT means earnings before interest and tax.

EBITDA means earnings before interest, tax, depreciation and amortisation.

Excluded Tender means a Tender submitted by:

(i) a shareholder who tenders all of their Shares at the Buy-Back Price, below the Buy-Back Price and/or as a Final Price Tender and who would have a Small Holding (400 Shares or less) as a result of the scale back; or

(ii) the TESOP Trustee.

Final Price Tender means a Tender in which the shareholder elects to receive the Buy-Back Price, whatever Telstra determines it to be.

Invitation means the invitation by Telstra to its shareholders to offer to sell Shares, as set out in the Buy-Back Documents.

Issuer Sponsored Holder means a holder of Shares on the issuer sponsored subregister of Telstra.

Issuer Sponsored Holding means a holding of Shares on the issuer sponsored subregister of Telstra.

Liquid Interest-Bearing Assets means cash at bank and on hand, bank deposits, bills of exchange and commercial paper.

NZX means New Zealand Exchange Limited.

OCH means the Options Clearing House Pty Ltd.

Priority Allocation means 400 Shares or such lesser number of Shares as is required to ensure that Telstrais able to buy back only the number of Shares it determines to buy back.

SCH Business Rules means the business rules of the securities clearing house of the ASX from time to time.

Shares means fully paid ordinary shares in the capital of Telstra on issue as at Friday, 17 October 2003.

Small Holding means a holding of fewer than or equal to 400 Shares.

Telstra means Telstra Corporation Limited (ABN 33 051 775 556).

Telstra Group means Telstra and its subsidiaries.

Teistra Share Registry means the share registry of Telstra maintained by ASX Perpetual Registrars Limited (ABN 54 083 214 537).

Tender means a shareholder's offer to sell nominated Shares back to Telstra at a Tender Price and on the terms and conditions set out in the Buu-Back Documents as amended in accordance with the procedures set out in this Buu-Back booklet.

Tender Form means the form of offer by a shareholder to sell nominated Shares to Telstra which is enclosed with this booklet and includes a Tender Form amended in accordance with the procedures set out in the Buy-Back Documents.

Tender Period means the period within which shareholders may lodge, withdraw or amend a Tender in accordance with the Buy-Back Documents.

Tender Price means one of the specified prices (from \$4.20 to \$5.40 per Share set out on the Tender Form) or, where a Final Price Tender is submitted, the Buy-Back Price.

TESOP 97 means the Telstra Employee Share Ownership Plan 1997.

TESOP 97 Shares means Shares, which are registered in the name of the TESOP Trustee on 17 October 2003 and held on trust for a TESOP Participant under the terms of TESOP 97.

TESOP 99 means the Telstra Employee Share Ownership Plan 1999.

TESOP 99 Loan means the loan from Telstra under TESOP 99.

TESOP 99 Shares means Shares, which are registered in the name of the TESOP Trustee on 17 October 2003 and held on trust for a TESOP Participant under the terms of TESOP 99.

TESOP Buy-Back Document means the document of that name accompanying this booklet if you are a TESOP Participant.

TESOP Participant means a beneficial holder of TESOP 97 Shares and/or TESOP 99 Shares.

TESOP Shares means TESOP 97 Shares and TESOP 99 Shares.

TESOP Trustee means Telstra ESOP Trustee Pty Limited (ACN 080 180 285).

Withdrawal/Amendment Form means the form entitled "Tender Withdrawal/Amendment Form" at the back of this booklet or otherwise provided to you by Telstra to withdraw or amend a Tender.

you or shareholder means a holder of Shares in Telstra.

5.2 Interpretation

In the Buy-Back Documents, unless the context otherwise requires:

the singular includes the plural, and vice versa;
words importing one gender include other genders;
other parts of speech and grammatical forms of a word or phrase defined in this document have a corresponding meaning;
terms used in the Buy-Back Documents and defined in the Corporations Act have the meanings ascribed to them in the Corporations Act;
a reference to currency is to Australian dollars; and
a reference to time is to Melbourne time.

The postal acceptance rule does not apply to Tenders.

This Invitation, your Tender, and any Buy-Back Contract are governed by the laws of Victoria, Australia.

Telstra Corporation Limited ABN 33 051 775 556

THIS DOCUMENT IS IMPORTANT. IF YOU DO NOT UNDERSTAND IT, YOU SHOULD CONSULT YOUR PROFESSIONAL ADVISER WITHOUT DELAY.

Shareholder details (please print in CAPITAL LETTERS in black ink)

Registered Name:
Registered Address:
HIM/SRN:
Shares shown in Box A of your original personalised Tender Form:

Tick one (only):

Withdrawal: I/We wish to withdraw my/our previous Tender Form in its entirety and I/we do not wish to replace it with a new Tender Form. (Complete Box A and sign at Box F)

Amendment: I/We wish to withdraw my/our previous Tender Form in its entirety and wish to replace it with a new Tender Form as set out below. (Complete Boxes A to F)

Number of Shares and price per Share tendered into the Buy-Back

I/we offer to sell the following Shares to Telstra at the Tender Price(s) specified and on the terms and conditions set out in the Buy-Back Documents: Insert number of Shares

				and the state of the complete problem in the state of the complete of the complete state of the complete of the
			Shares as a FINAL PRICE TENDER	linsert at Box Cithe number of Shares (if any) you wish to tender as a Final Price Tender. and a government of the control of the state.
	┿		per Share at \$ 4.20	Insert at Box D the number of Shares (if any) you wish to tender next to the price at which you wish to tender those Shares.
	$\div$		per Share at \$ 4.40	You should refer to the special instructions overleaf before completing this form particularly if the number of Shares shown in Box A above is 400 or less
	$\div$		per Share at \$ 4.60	Add up all the Shares in each row of Boxes
Ð	4		per Share at \$ 4.80	~C and D and write that number in Box E. $\sim$ . That number must not exceed the $\sim$ number of Shares shown in Box A above.
	┿		per Share $at\$ 5.00	Ħ
	┿		per Share E 5.20 at \$
	$\hspace{0.1mm} +\hspace{0.1mm}$		per Share - at \$ 5.40
		Please sign within the boxes below in accordance with instructions overleaf
		Individual or Joint Shareholder 1	Joint Shareholder 2 (Individual)	Joint Shareholder 3 (Individual)

		* Director/Sole Director and Sole Company Secretary	* Director/Company Secretary
		Please provide contact details:

	Contact name Charles and an annual contract of a		Contact daytime telephone	Date TLS BBT006

Withdrawing or Amending your Tender Form

The instructions below are cross-referenced to each section of the Withdrawal/Amendment Form.

	You need to provide the details of your registered holding in Box A. The registered name and registered address details must match exactly the name and address details recorded on the Telstra share register for that registered holding.
	CHESS Holders must provide their Holder Identification Number (HIN) and Issuer Sponsored Holders must provide their Securityholder Reference Number (SRN). Please also specify the number of Shares shown in Box A of your original personalised Tender Form. This is the number of Shares registered in your name as at 17 October 2003 that confer an entitlement to participate in the Buy-Back.
12)	Tick one of the two boxes only. Tick the "Withdrawal" Box if you wish to withdraw your previous Tender Form in its entirely and you do not wish to replace it with a new Tender Form. Tick the "Amendment" Box if you wish to withdraw your previous Tender Form in its entirety and replace it with this new Tender Form.
	If the number of Shares shown in Box A is 400 or less, you must tender all of the Shares you wish to tender either as a final Price Tender at Box C, or at one of the specified prices at Box D. You cannot tender different parcels of Shares at different Tender Prices.
M	If the number of Shares shown in Box A is more than 400, you may tender different parcels of Shares at different Tender Prices. For example, you may tender some Shares shown in Box A as a Final Price Tender, some Shares at the specified price of say \$4.80, and some Shares at the specified price of say \$4.20. Each parcel of Shares tendered at a different Tender Price is a separate Tender.
	You must add up the number of Shares inserted in Boxes C and D and write the total number in Box E. This total number must not exceed the number of Shares shown in Box A.
	Sign the Withdrawal/Amendment Form at Box F.
	By signing and returning this Withdrawal/Amendment Form you acknowledge that you have read and understood the Buy-Back Documents.
	• If you have ticked the "Withdrawal Box", you wish to withdraw the Tender(s) specified on your previous Tender Form. You do not wish to replace those Tenders with any new Tenders.
	• If you have ticked the "Amendment Box", you wish to replace the Tender(s) specified on your previous Tender Form with the new Tender(s) specified on this Tender Form. You acknowledge that your new Tender(s) are offers to sell the tendered Shares to Telstra at the Tender Price(s) specified and on the terms and conditions set out in the Buy-Back Documents.
	Joint holders - all holders must sign.
	Under power of attorney $\scriptstyle\sim$ if not already noted by the Telstra Share Registry, a certified copy of the power of attorney must accompany this form. Where this form is signed under power of attorney, the attorney declares that the attorney has no notice of revocation of the power or the death of the donor of the power.
	Deceased estate – all executors should sign and, if not already noted by the Telstra Share Registry, a certified copy of probate or letters of administration must accompany this form.
	Company - this form must be signed by 2 directors, a director and company secretary or, in the case of a company with a sole director who is also the sole company secretary, the sole director.
	Submitting your Withdrawal/Amendment Form
	Shareholders on the Australian register - call 1300 305 385 or +61 (3) 9615 9199 for further information
	CHESS Holders Do not send your Withdrawal/Amendment Form to the Telstra Share Registry. You need to ensure that your controlling participant receives your withdrawal/amendment instructions in sufficient time for them to process the withdrawal/amendment no later than 7.00 pm Melbourne time on Friday 21, November 2003.
	issuer Sponsored Holders (1982) and 1988 (1988) and 1989 (1982) and 1988 (1988) and 1989 (1989) (1989) and 1989 (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989) (1989 Send or deliver your completed and signed Withdrawal/Amendment Form to the following address so that it is received no later than 7.00 pm Melbourne time - on Friday 21, November 2003: · Delivery address Mailing address Alliance : Telstra Šhare Registry C/- ASX Perpetual Registrars Limited Telstra Share Registry Locked Bag 5,100 – Methourne VIC 8060 Level 4, 333 Collins Street . The Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins of the Collins a sharar Secrets of the construction Melbourne VIC 3000 of the Superior Construction
	Shareholders on the New Zealand register - call 0800 8357872 or +64 (3) 308 8887 for further information
	Send your completed and signed Withdrawal/Amendment Form to the following address so that it is received no later than 7.00 pm New Zealand time on Friday 21, November 2003: I Telstra Share Registru a service Protoky, Anthony South and South and South Andrew South

CJ-BK Registries Limited PO Box 384 Service

Ashburton NEW ZEALAND 8300

Advisers to the Buy-Back

MALLESONS STEPHEN JAQUES

TARAS ANG PARTITION

ea
E

Brokers to the Buy-Back

© Telstra Corporation Limited (ABN 33 051 775 556) 2003.
™Trade mark of Telstra Corporation Limited.
* Registered trade mark of Telstra Corporation Limited.

Dear TESOP Participant

At the Annual Results this year I announced that Telstra intended to buy back around \$800 million to \$1,000 million worth of Telstra Shares through an off-market buy-back tender process.

This TESOP Buy-Back Document is sent to you because you have TESOP Shares that are held on trust for you by the TESOP Trustee. In this document, the TESOP Trustee has provided special rules and information about selling your TESOP Shares in the Buy-Back. If you hold other Telstra Shares, you should refer to the Buy-Back booklet for information about selling those Shares in the Buy-Back.

Telstra values the fact that so many of our employees are also Telstra shareholders. It shows a level of staff confidence and commitment that is highly valued and makes Telstra a better company.

The Telstra Board believes that the Buy-Back is beneficial to shareholders. For shareholders who decide to retain their Shares, the Buy-Back is expected to increase the company's earnings per share and return on equity through the overall reduction in capital. For shareholders who sell their Shares, the Buy-Back Price includes a fully franked dividend.

It is important to understand that the financial consequences of selling your TESOP Shares in the Buy-Back depend on your individual circumstances, including your tax position. Importantly, if your TESOP Shares are sold in the Buy-Back you will lose the benefit of your interest free TESOP Loan(s) and you will exit TESOP before you may otherwise have to. If you decide to sell your TESOP 99 Shares in the Buy-Back, you must repay your TESOP 99 Loan up-front. Irrespective of the Buy-Back Price, the proceeds of sale of your TESOP 99 Shares in the Buy-Back will be less than the amount that you must repay.

Participation in the Buy-Back is voluntary. If you want to participate in the Buy-Back you may participate in respect of either or both of your TESOP 97 Shares or TESOP 99 Shares. In each case all of the relevant Shares must be tendered. Alternatively, you may decide to retain all of your TESOP 97 Shares and/or your TESOP 99 Shares in which case, you don't need to do anything.

If you wish to participate in the Buy-Back, you must ensure that the TESOP Share Registry receives your completed TESOP Tender Form(s) no later than 5.00pm Melbourne time on Friday, 14 November 2003. Please note that this is earlier than the close of the Buy-Back Tender Period.

Telstra has set up a TESOP enquiry line to assist you with any questions you may have in relation to the Buy-Back. The number is 1300 303 199 (within Australia) and +61 (3) 9615 9889 (outside Australia).

You should read this TESOP Buy-Back Document and the accompanying Buy-Back booklet carefully. You should seek professional advice before you ask the TESOP Trustee to tender your TESOP Shares in the Buy-Back.

Yours sincerely

C. Swithowski

Dr Ziggy Switkowski Chief Executive Officer Telstra Corporation Limited

Attention

Telstra made loans available to you for your TESOP Shares, Your TESOP Loans do not cost you anything, you do not pay any interest on them, and you do not have to repay them except from the dividends paid on your TESOP Shares and from the proceeds of any sale of your TESOP Shares.

TESOP enables you to sell your TESOP Shares in certain circumstances. The Buy-Back offers you an alternative method to sell your TESOP Shares. You are not obliged to sell your TESOP Shares in the Buy-Back.

If you sell your TESOP 97 Shares or pay out your TESOP 99 Loan in order to sell your TESOP 99 Shares, you are deciding, as the case may be, to exit TESOP 97 and/or TESOP 99 and you will lose the relevant interest free TESOP Loan(s).

If you wish to exit TESOP, it is important to consider whether it is appropriate for you to do so by selling your TESOP Shares in the Buy-Back rather than on-market.

There may be benefits of continued participation in TESOP. These benefits will depend on the future price of Telstra Shares and future dividends on Telstra Shares.

Neither Telstra nor the TESOP Trustee can give you any assurance as to the future price of Telstra Shares or future dividends.

If you have TESOP 99 Shares, the proceeds from the buy-back of those Shares will not cover the amount outstanding on your TESOP 99 Loan. Irrespective of the Buy-Back Price, you must pay more money to Telstra to repay your TESOP 99 Loan than you will receive from the sale of your TESOP 99 Shares in the Buy-Back.

What is this about?

YOUT TESOP Shores

This TESOP Buy-Back Document explains what you should do if you want to sell your TESOP Shares in the Buy-Back.

If you want to sell your TESOP 97 Shares and/or your TESOP 99 Shares in the Buy-Back, you need to ask the TESOP Trustee to tender those TESOP Shares by following the special rules set out in this TESOP Buy-Back Document and the enclosed TESOP Tender Form(s). The TESOP Trustee will then tender those TESOP Shares on the terms and conditions set out in the Buy-Back booklet accompanying this document.

Please read this TESOP Buy-Back Document and the accompanying Buy-Back booklet carefully. You should seek professional advice before you ask the TESOP Trustee to tender your TESOP Shares in the Buy-Back.

What about my other Shares?

This TESOP Buy-Back Document only applies to your TESOP Shares. Please refer to the Buy-Back booklet for information on tendering your other Shares.

Where can I find more information?

You can find more information about the Buy-Back by:

· reading this TESOP Buy-Back Document and the accompanying Buy-Back booklet;
· referring to www.telstra.com.au/investor for information about the tax consequences of selling your TESOP Shares in the Buy-Back; or
· calling the TESOP enquiry line on 1300 303 199 within Australia or on $+ 61 (3)$ 9615 9889 if you are calling from outside Australia.

Important dates

TESOP Closing Date	1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999
Announcment of Buu-Back Price and minier of Shares bought back	Ma hierzinin 8 - 1944 1945 1946 1947 1958 1959 1959 1959 1959 1959 1959 1959
Oispotchicreating of Buy Back proceeds comueted by:	Katalon wa kata asa a masa shi

What is the balance of my TESOP Loan(s)?

If you have TESOP 97 Shares, the balance of your TESOP 97 Loan is shown in Box A of the blue TESOP 97 Tender Form enclosed with this document.

If you have TESOP 99 Shares, the balance of your TESOP 99 Loan is shown in Box A of the green TESOP 99 Tender Form enclosed with this document.

This will be the balance of your TESOP Loan(s) at 31 October 2003, taking into account the payment of dividends on that day, but not taking into account any other payments processed by the TESOP Share Registry after 17 October 2003.

What should I do if I want to stay in TESOP and keep my interest free TESOP Loans? You should do nothing. Participation in the Buy-Back is voluntary.

What must I do if I want to exit TESOP by participating in the Buy-Back?

TESOP 97: you must ask the TESOP Trustee to tender all (not some) of your TESOP 97 Shares in the Buy-Back by following the special rules set out in this TESOP Buy-Back Document and the blue TESOP 97 Tender Form.

TESOP 99: you must repay your TESOP 99 Loan up-front and ask the TESOP Trustee to tender all (not some) of your TESOP 99 Shares in the Buy-Back by following the special rules set out in this TESOP Buy-Back Document and the green TESOP 99 Tender Form.

Your steps to exiting TESOP by participating in the Buy-Back

If you exit TESOP, there will be important tax consequences for you. You should refer to page 5 of this TESOP Buy-Back Document for an outline of some of the consequences and to www.telstra.com.au/investor for further tax information.

TESOP 97

STEP 1 - Read the documents and seek advice Read this TESOP Buy-Back Document and the accompanying Buy-Back booklet and seek professional advice.

STEP 2 - Decide whether or not to exit TESOP 97 by participating in the Buy-Back

If you decide that you do not want to exit TESOP 97, you should do nothing.

If you decide that you want to exit TESOP 97 by participating in the Buy-Back, you must complete the blue TESOP 97 Tender Form.

STEP 3 - Complete the blue TESOP 97 Tender Form Complete the blue TESOP 97 Tender Form by asking the TESOP Trustee to tender all of your TESOP 97 Shares either:

· as a Final Price Tender; or
at only one of the prices specified on the blue TESOP 97 Tender Form.

For more information about Final Price Tenders, refer to section 1.8 of the Buy-Back booklet.

The number of your TESOP 97 Shares as at 17 October 2003 is shown in Box B of the blue TESOP 97 Tender Form.

STEP 4 - You do not need to repay your TESOP 97 Loan up-front

If your TESOP 97 Shares are sold in the Buy-Back, the TESOP Trustee will repay your TESOP 97 Loan out of the proceeds of the sale on your behalf.

STEP 5 - Sign the completed blue TESOP 97 Tender Form and submit it to the TESOP Share Registry Your blue TESOP 97 Tender Form must be received by the TESOP Share Registry (at the address provided on the form) before 5.00pm Melbourne time on Friday, 14 November 2003.

TESOP 99

STEP 1 - Read the documents and seek advice Read this TESOP Buy-Back Document and the accompanying Buy-Back booklet and seek professional advice.

STEP 2 - Decide whether or not to exit TESOP 99 by participating in the Buy-Back

If you decide that you do not want to exit TESOP 99, you should do nothing.

If you decide that you want to exit TESOP 99 by participating in the Buy-Back, you must complete the green TESOP 99 Tender Form.

STEP 3 - Complete the green TESOP 99 Tender Form Complete the green TESOP 99 Tender Form by asking the TESOP Trustee to tender all of your TESOP 99 Shares either:

· as a Final Price Tender; or
$\hat{\mathbf{g}}$ at only one of the prices specified on the green TESOP 99 Tender Form.

For more information about Final Price Tenders, referto section 1.8 of the Buy-Back booklet.

The number of your TESOP 99 Shares as at 17 October 2003 is shown in Box B of the green TESOP 99 Tender Form.

STEP 4 - You must repay your TESOP 99 Loan up-front The balance of your TESOP 99 Loan is shown in Box A of the green TESOP 99 Tender Form. You must pay that amount by cheque in accordance with the instructions provided on that form.

STEP 5 - Sign the completed green TESOP 99 Tender Form and submit it to the TESOP Share Registry with the cheque for the balance of your TESOP 99 Loan Your green TESOP 99 Tender Form must be received by the TESOP Share Registry (at the address provided on the form) before 5.00pm Melbourne time on Friday, 14 November 2003.

The TESOP Closing Date is earlier than the close of the Buy-Back Tender Period

Your questions answered

Do I have to pay tax?

The buy-back of your TESOP Shares may give rise to a tax liability

The Buy-Back Price will include a fully franked dividend component. You will be required to include the dividend component and franking credit in your assessable income. For example, if the Buy-Back Price is \$4.80⁵, you could be liable to pay tax of up to 92c per TESOP Share on the dividend component. This potential liability will increase if the Buy-Back Price is greater than \$4.80. The amount (if any) of your tax liability on the dividend component will depend, among other things, on your marginal tax rate.

Such a tax liability may not arise if you sell your TESOP Shares on-market.

The buy-back of your TESOP Shares may give rise to a capital loss for tax purposes

The amount of the loss may be affected by proposed legislation which at 3 October 2003 was not yet law.

The capital loss may not arise or may be reduced if you sell your TESOP Shares on-market.

Capital loss may have limited value

A capital loss can only be used to offset capital gains. Accordingly, the "value" of any capital loss you may make from selling your TESOP Shares in the Buy-Back will depend, among other things, on whether you have, or expect to have, capital gains to offset against that capital loss.

You need to take into account your personal circumstances

The relative tax cost or benefit of selling your TESOP Shares in the Buy-Back, rather than selling the shares on-market, will depend on your personal circumstances, including whether you made a tax election for the year in which the relevant shares were acquired, your marginal tax rate and whether you have capital gains to offset capital losses.

As your particular tax treatment will depend on your personal circumstances, it is important that you seek professional tax advice to take into account these

circumstances before you ask the TESOP Trustee to tender your TESOP Shares in the Buy-Back.

A detailed outline of the tax treatment of selling your TESOP Shares in the Buy-Back is available at www.telstra.com.au/investor.

Will all of my tendered TESOP Shares be bought back?

If you follow the special rules set out in this TESOP Buy-Back Document and the TESOP Tender Form(s), and you ask the TESOP Trustee to submit a Final Price. Tender or a Tender at a specified price that is at or below the Buy-Back Price determined by Telstra, all of your tendered TESOP Shares will be bought back and you will not be subject to any scale back.²

If, however, you ask the TESOP Trustee to submit a Tender at a price above the Buy-Back Price, none of your TESOP Shares will be bought back.

Telstra will determine the Buy-Back Price after the Tender Period for the Buy-Back has closed. For further details, refer to section 1.8 of the Buy-Back booklet.

What happens if my tendered TESOP Shares are not bought back?

TESOP 97: you will not exit TESOP 97. The TESOP Trustee will continue to hold your TESOP 97 Shares on trust for you until your TESOP 97 Loan is repaid or your TESOP 97 Shares are sold in accordance with the TESOP 97 Rules.

TESOP 99: as you have repaid your TESOP 99 Loan, all of your TESOP 99 Shares will be transferred to you and you will exit TESOP 99.

What happens if my TESOP Shares are bought back?

TESOP 97: you will exit TESOP 97. The proceeds from the buy-back of your TESOP 97 Shares will first be applied to repay your TESOP 97 Loan. You will then receive the balance of the proceeds (by direct credit if you have current payment instructions with the TESOP Share Registry, or by cheque) in Australian dollars.

^154.80 is an example only. You should not rely on this price as being the Buy-Back Price. See section 2.8 of the 8uy-Back booklet accompanying this document for an explonation of how the Bug-Back Price will be determined.

^<sup>3 That is, unless Telsina exercises the discretion referred to in section 4.11 of the Buy-Back booklet accompanying this document.

TESOP 99: you will exit TESOP 99. You will receive the proceeds from the buy-back of your TESOP 99 Shares (by direct credit if you have current payment instructions with the TESOP Share Registry, or by cheque) in Australian dollars.

The direct crediting of bank accounts and the dispatching of cheques will be completed by Friday, 12 December 2003.

If I want to sell my TESOP Shares must I do so in the Buy-Back?

The Buy-Back is not the only way of selling your TESOP Shares. You may also ask the TESOP Trustee to sell your TESOP 97 Shares on-market or you may repay your TESOP 97 Loan and/or your TESOP 99 Loan and, after the relevant TESOP Shares have been transferred to you, you may sell them on-market.

The financial consequences of selling your TESOP Shares on-market or in the Buy-Back will depend upon your particular circumstances, including your tax position, the price at which you are able to sell the Shares and any costs associated with the sale.

If you want to exit TESOP, the tax consequences of selling your TESOP Shares in the Buy-Back may be worse than selling the Shares on-market. This is more likely, for example, if you made a tax election for the year in which the relevant Shares were acquired and you are a higher marginal rate taxpayer, particularly, if you do not expect to derive capital gains in the current year or in subsequent years.

The actual proceeds you receive on a sale of TESOP Shares on-market will depend on the future price of Telstra Shares and future dividends paid on Telstra Shares. Of course, Telstra and the TESOP Trustee cannot give you any assurance as to the future price of Telstra Shares or future dividends.

If you want to sell your TESOP Shares on-market you should contact the TESOP Share Registry on 1300 303 199 (within Australia) or +61 (3) 9615 9889 (outside Australia) for further information.

It is important you seek professional advice before you exit TESOP and as to which method of sale is appropriate for you.

What are the proceeds of the Buy-Back likely to be?

Set out below are a number of examples, which indicate the Buy-Back proceeds (if any) TESOP Participants may receive from Telstra in certain circumstances.

You should not rely on these examples, as your personal circumstances may be different.

You need to consider the tax consequences You should refer to www.telstra.com.au/investor for further information about the tax consequences of selling your TESOP Shares in the Buy-Back.

The examples below do not take into account the tax consequences of selling your TESOP Shares in the Buy-Back, in particular, that the buy-back of your TESOP Shares may give rise to a tax liability.

Your particular tax consequences will depend on your personal circumstances. It is important that you seek professional tax advice before deciding to exit TESOP in the Buy-Back.

Example 1: You have 2500 TESOP 97 Shares If the balance of your TESOP 97 Loan was \$4,183.19, the Buy-Back Price determined by Telstra was \$4.80¹, and you asked the TESOP Trustee to tender your TESOP 97 Shares as a Final Price Tender or at or below the Buy-Back Price, you would receive (before tax and after your TESOP 97 Loan is repaid) \$7,816.81 from Telstra. For the balance of your own TESOP 97 Loan, refer to the blue TESOP 97 Tender Form.

Example 2: You have 400 TESOP 99 Shares Irrespective of the Buy-Back Price, the proceeds of the buy-back of your TESOP 99 Shares will be less than the amount you must pay up-front to the TESOP Trustee to repay your TESOP 99 Loan. If the balance of your TESOP 99 Loan was \$2,705.22 , and the Buy-Back Price was \$5.40² (the highest price in the range), you would receive (before tax) \$2,160.00 from Telstra, which would be

^\$4.80 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.8 of the Buy-Back booklet accompanying this document for anexplanation of how the Bug-Back Price will be determined.

^' \$5.40 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.8 of the Buy-Back booklet accompanying this document for an explanation of how the Suy-Back Price will be determined.

\$545.22 less than the amount you would have paid upfront to repay your TESOP 99 Loan. If, however, the Buy-Back Price was \$4.80³, and you asked the TESOP Trustee to tender your TESOP 99 Shares as a Final Price Tender or at or below the Buy-Back Price, you would receive (beforetax) \$1,920.00 from Telstra, which would be \$785.22 less than the amount you would have paid up-front to repay your TESOP 99 Loan. For the balance of your own TESOP 99 Loan, refer to the green TESOP 99 Tender Form.

Can I use the proceeds of the buy-back of my TESOP 97 Shares to repay my TESOP 99 Loan?

No. You cannot use the proceeds of the buy-back of your TESOP 97 Shares to repay your TESOP 99 Loan. If you want the TESOP Trustee to tender your TESOP 99 Shares in the Buy-Back, you must repay your TESOP 99 Loan up-front.

Can I withdraw my TESOP Tender Form(s)?

Yes, by contacting the TESOP Share Registry on 1300 303 199 (within Australia) and + 61 (3) 9615 9889 (outside Australia) to request a TESOP Withdrawal Form. You will need to complete, sign and submit the TESOP Withdrawal Form so that it is received by the TESOP Share Registry (at the address provided on the form) before 5.00pm Melbourne time on Friday, 14 November 2003.

You may not amend your TESOP Tender Form(s). You may only withdraw your TESOP Tender Form(s).

TESOP 99: If you withdraw your green TESOP 99 Tender Form, the TESOP Trustee will nevertheless repay your TESOP 99 Loan on your behalf. Once the TESOP 99 Loan has been repaid, all of your TESOP 99 Shares will be transferred to you, and you will exit TESOP 99.

What happens if my TESOP Tender Form(s) or TESOP Withdrawal Form(s) are late, incomplete or incorrectly completed?

The TESOP Trustee may disregard any incomplete or incorrectly completed TESOP Tender Form or TESOP Withdrawal Form and any TESOP Tender Form or TESOP Withdrawal Form received by the TESOP Share

Registry after 5.00pm Melbourne time on Friday, 14 November 2003.

The TESOP Trustee may also disregard any TESOP 99 Tender Form submitted with a cheque that is not honoured when presented.

Why are my TESOP 97 Shares treated differently to my TESOP 99 Shares?

The proceeds of the buy-back of your TESOP 97 Shares will be sufficient to repay your TESOP 97 Loan, but the proceeds of the buy-back of your TESOP 99 Shares will not. This means that you do not need to repay your TESOP 97 Loan up-front, but you do need to repay your TESOP 99 Loan up-front if you want the TESOP Trustee to tender those Shares in the Buy-Back.

Why is the TESOP Closing Date earlier than for other shareholders?

The TESOP Trustee needs additional administration time to tender your TESOP Shares before the close of the Buy-Back Tender Period.

Can I participate in the Buy-Back if I repay my TESOP Loans before the close of the Tender Period?

Under the TESOP 97 and TESOP 99 Rules, you may repay your TESOP Loans at any time and direct the TESOP Trustee to transfer your TESOP Shares to you.

If you have repaid a TESOP Loan, you are only entitled to participate in the Buy-Back in respect of the relevant TESOP Shares if the Shares were registered in your name on Friday, 17 October 2003, and, in accordance with the SCH Business Rules, the Shares confer an entitlement to participate in the Buy-Back. If you are entitled to participate in the Buy-Back in respect of the Shares that have been transferred to you, you should refer to the Buy-Back booklet.

The TESOP Trustee and Telstra can give no assurance that if you have previously requested the TESOP Shares to be transferred to you under the TESOP 97 or TESOP 99 Rules, the relevant Shares have been registered in your name on or before Friday, 17 October 2003.

1 \$4.80 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.8 of the Buy-Back booklet accompanying this document for an explanation of how the Bug-Back Price will be determined.

Definitions

Capitalised terms not defined in this section, have the same meaning as in the Buy-Back Documents.

In this document, unless the context otherwise requires:

TESOP means TESOP 97 and/or TESOP 99.

TESOP 97 means the Telstra Employee Share Ownership Plan 1997.

TESOP 97 and TESOP 99 Rules means the TESOP 97 Rules and/or the TESOP 99 Rules.

TESOP 97 Loan means the loan from Telstra under TESOP 97

TESOP 97 Rules means the Trust Deed, as varied from time to time, between Telstra and the TESOP Trustee dated 26 September 1997 together with the Loan Rules, as varied from time to time, of the Telstra Employee Share Ownership Plan - Loan Scheme adopted on 26 September 1997.

TESOP 97 Shares means the Shares purchased with the TESOP 97 Loan and the Extra Loan 1 for 4 Shares provided to you if you acquired those Shares, which are registered in the name of the TESOP Trustee on 17 October 2003 and held on trust for you under the TESOP 97 Rules.

TESOP 99 means the Telstra Employee Share Ownership Plan 1999.

TESOP 99 Loan means the loan from Telstra under TESOP 99.

TESOP 99 Rules means the Trust Deed as varied from time to time, between Telstra and the TESOP Trustee dated 3 September 1999 together with the Loan Rules, as varied from time to time, of the Telstra Emplouee Share Ownership Plan II - Loan Scheme adopted on 3 September 1999.

TESOP 99 Shares means Shares purchased with the TESOP 99 Loan, which are registered in the name of the TESOP Trustee on 17 October 2003 and held on trust for you under the TESOP 99 Rules.

TESOP Closing Date means 5.00pm Melbourne time on Friday, 14 November 2003.

TESOP Loans means the TESOP 97 Loan and the TESOP 99 Loan.

TESOP Participant means a beneficial holder of TESOP 97 Shares and/or TESOP 99 Shares.

TESOP Shares means TESOP 97 Shares and/or TESOP 99 Shares.

TESOP Share Registry means the registry of Telstra for TESOP Participants maintained by ASX Perpetual Registrars Limited (ABN 54 083 214 537).

TESOP Trustee means Telstra ESOP Trustee Pty Ltd (ACN 080 180 285).

AI assistant

TELSTRA GROUP LIMITED — Capital/Financing Update 2003

65927_rns_2003-10-22_53515cbd-fbb0-4f3f-b572-471331a74fec.pdf

Mail-out of Telstra Buy-Back Booklet Commences

Media Release

Mail-out of Telstra Buy-Back Booklet Commences

Important Notes

A VNR will be made available to all networks via news exchange ex GTV9 at 15:00 on Thursday 23 October 2003

Important dates

October

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December

de la componenza You are eligible to participate in the Bug-Back if Shares are registered in your name on Friday, 17 October 2003 and in accordance with the SCH Business Rules, the Shares confer or gningnen (ozee ave the hytolior

lssuer Sportsen. A Holder

LE CHANGE DE BRAIL

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so that it is received no later than zom Melbourne time on Bíday, 21 November 2003.

tha Bando

Key details of the Buy-Back

Your choice

If you DO choose to participate in the Buy-Back:

If you choose NOT to participate in the Buy-Back:

What to do?

If you DO choose to participate in the Buy-Back

If you choose NOT to participate in the Buy-Back

Contents

Chairman's letter

Dear shareholder

Timografia a shekara ta 1999 a tshkoning ta 1999 a tshkoning ta 1999 a tshkoning ta 1999 a tshkoning ta 1999

1. Details of the Buy-Back and Tender process

1.1 What is a buu-back?

1.2 Why is Telstra implementing a buy-back?

1.3 What are the advantages of a tender process?

1.4 Am I entitled to tender Shares in the Buy-Back?

1.5 Do I have to tender my Shares?

1.6 What does the Buy-Back mean for me if I do not participate?

1.7 Will the Commonwealth participate in the Buy-Back?

1.8 What price will Telstra pay to buy back my Shares?

1.9 How will I know what the Buy-Back Prica is?

1.10 Will all the Shares I tender be bought back?

What is a scale back?

Example 1

Example 2

1.11 How will any scale back affect shareholders who hold a relatively small number of Shares?

1.12 Shareholders with 400 Shares or less

1.13 How does the Buy-Back compare to selling my Shares on the stock market?

1.14 How have Telstra Shares performed over recent times?

1.15 How do I participate in the Buy-Back?

Step 3 -- Submit your Tender(s)

(a) Issuer Sponsored Holdings

(b) CHESS Holdings

1.16 Can I withdraw or amend my Tender?

Withdrawal of Tenders

Amendment of Tenders

(b) CHESS Holdings

All shareholders on the New Zealand register Withdrawal of Tenders

Amendment of Tenders

1.17 How can I obtain additional Tender and Withdrawal/Amendment Forms?

1.18 How will I receive payment for Shares bought back?

1.19 Will I still receive the 2002/2003 final dividend if my Shares are bought back?

1.20 Can I still vote at the Annual General Meeting if I tender my Shares to Telstra?

1.21 Can I trade my Shares after submitting a Tender?

1.22 Note to shareholders located in the United States

2. Australian tax implications for shareholders

It is, therefore, important that you seek professional tax advice to take into account your particular circumstances.

Introduction

2.1 Australian resident individual

2.2 Australian resident company

2.3 Australian complying superannuation fund

2.4 Non-residents

2.5 Limits on Availability of Franking Credits and Tax Offsets

3. Effect of the Buy-Back on Telstra

3.1 How will the Buy-Back be funded?

3.2 What effect will the Buy-Back have on Telstra's issued Shares?

3.3 What effect will the Buy-Back have on control of Telstra?

3.4 Full year results

3.5 Outlook for 2003/2004

4. Additional information on the Buy-Back

4.1 Size of the Buy-Back

4.2 Restrictions on Tender acceptances

TELSTRA GROUP LIMITED Capital/Financing Update 2003

E SA MARKA YA MALAMBA SHI YA YA KAMA YA KATA WA TA 1979.
1971 - A SA SA SA SA SA YA YA MARKA WA TA NASA YA TA NASA NA SA SA SA TA 1979.
1972 - A SA SA SA SA SA SA SA SA SA SA SA SA S an ang pag-pagpalang na