TELSTRA GROUP LIMITED — Capital/Financing Update 2004

Nov 7, 2004

8 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 to divest Infonet shareholdings but retain Global Services Agreement

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

379/2004

8 November 2004

Telstra to divest Infonet shareholdings but retain Global Services Agreement

Telstra today announced it has reached an agreement in principle to sell its shares in Infonet Services Corporation to British Telecommunications plc for US\$51.2m (A\$68.5m), while retaining its Services Agreement for Infonet's products and services.

Infonet's other major shareholders - TeliaSonera, KPN, Swisscom, Telefonica and KDDI - have also agreed in principle to sell their Infonet shares to BT.

Telstra has agreed to sell its shares because it considers the timing is right to realise the value of its holdings in Infonet. In addition, Telstra does not need to have equity in Infonet to retain its existing Services Agreement with Infonet.

Telstra's Managing Director, Global Business Solutions, Drew Kelton said: "For our multinational customers, this is very much business as usual. Retention of the Services Agreement was a 'nonnegotiable' for Telstra.

"The key to Telstra's success in servicing the needs of multi national corporations (MNCs) is our ability to integrate services under one single Global Services Agreement. A complete portfolio of services from a range of network assets and providers to deliver an end-to-end experience is underwritten by a Telstra SLA.

"Telstra Global is committed to providing MNC customers with a 'best of breed' service and will continue to provide seamless, converged Information Communication and Technology services globally using the portfolio of networks at our disposal," he said.

Telstra considers that Infonet has been a financially rewarding investment but it is not a strategic asset that Telstra needs to own, especially given the retention of the Services Agreement. Telstra has concluded that BT's offer was attractive enough to justify agreeing to sell its equity.

Telstra initially entered into a strategic alliance with Infonet in 1989. In total Telstra has invested A\$12.4m in Infonet equity.

Telstra expects to realise a pre-tax gain of approximately A\$164.5m from its Infonet equity investment, when the proceeds of this sale are added to Telstra's A\$109m share sales associated with Infonet's initial public offering in December 1999.

The sale price in the BT acquisition represents a 23 per cent premium to the three-month average share price.

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Completion of the acquisition is subject to various terms and conditions, including approval by Infonet shareholders and the receipt of various regulatory approvals. The transaction is expected to be completed during the first half of 2005.

Media enquiries Kerrina Lawrence +61 3 9634 5611 $+61$ 419 352 313

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