TELSTRA GROUP LIMITED — Capital/Financing Update 2004

Nov 16, 2004

17 November 2004

The Manager

Company Announcements Office Australian Stock Exchange 4^th Floor, 20 Bridge Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

Telephone 03 9634 6400 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra announces successful SNZ 200 million Kauri bond issue

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

Yours sincerely

Port brake

Douglas Gration Company Secretary

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

Media Release

17 November 2004

394/2004

Telstra announces successful SNZ 200 million Kanri bond issue

Telstra announced today it had successfully completed a \$NZ 200 million Kauri bond issue comprising seven and 10 year tranches of \$NZ 100m each.

The bonds were priced at 0.35 per cent and 0.45 per cent over the respective seven and 10 year \$NZ interest rate swap rates at the mid-point of the indicated pricing range - giving an attractive yield to investors of 6.99 per cent and 7.15 per cent.

The issue met with strong investor demand and was oversubscribed with around 25 New Zealand domestic institutional investors. The \$NZ 200m was the optimal figure Telstra had intended to achieve

The issue follows the recent well received roadshows led by Telstra's Chief Financial Officer, Mr John Stanhope and Corporate Treasurer, Mr Cliff Davis in Auckland and Wellington on 9 November.

Mr Stanhope said that the results of Telstra's Kauri bond are excellent – all the more so given that this is Telstra's first-ever issue of a \$NZ bond.

"This issue met every objective. We achieved competitive pricing, good volume and maturity, the right currency and a significant new investor base - all at the same time.

"It is an important milestone when a foreign company enters the New Zealand bond market for the first time and achieves such good volumes, pricing and maturity.

"It further demonstrates the markets' confidence in Telstra's continued long term commitment to its New Zealand operation, TelstraClear," Mr Stanhope said.

Bond proceeds will be used to retire derivatives-based \$NZ debt currently in place.

Mr Stanhope added that Telstra had now completed around two thirds of its \$A2.5 billion, long term funding plans for FY04/05 and was on target to achieve the remainder by June 2005.

The bond issue was jointly led by ANZ Investment Bank and Westpac Institutional Bank.

Telstra is rated $A+ (S\&P)$ , A1 (Moody's) and $A+ (Fitch)$ and all ratings have a stable outlook.

Telstra Media Contact Kerrina Lawrence Telstra Media Relations 03 9634 5611 0419 352 313

Telstra's Media Centre is located at: www.telstra.com.au/communications/media