TELSTRA GROUP LIMITED — Capital/Financing Update 2004

Aug 24, 2004

25 August 2004

The Manager

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

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

Telephone 03 9634 6400 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra Improves Global Managed Services for multi-nationals

In accordance with the listing rules, I attach a copy of a media release which will be made today.

Yours sincerely

North Graham

Douglas Gration Company Secretary

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

Media Release

25 August 2004

283/2004

Telstra Improves Global Managed Services for multi-nationals

Telstra Corporation Limited today boosted its offshore services supporting Australian and global multinational corporations (MNCs) overseas with the A\$127m (£50m) acquisition of PSINet UK, a leading provider of e-business infrastructure solutions and corporate IP-based communication services.

Telstra Business & Government's Group Managing Director, David Thodey, said the acquisition enables MNC customers to get seamless, converged Information Communication and Technology (ICT) services whether they are in London, Singapore or Sydney."

Mr Thodey said the acquisition met Telstra's rigorous investment criteria and is consistent with Telstra's recent capital management announcement.

"This acquisition expands our ICT services capability in a world where both international and Australian companies are increasingly playing on a global stage and require borderless communications solutions enabling them to run their operations in the most efficient manner." Mr Thodey said.

"Telstra has been providing customers with global carriage services to the UK for the past 13 years. Now we can offer value added solutions such as security services, storage, managed hosting and disaster recovery, in London. It allows us to provide a total package, giving customers the ability to buy services from a single provider.

"Just as Telstra's recent acquisition of the Kaz Group expanded Telstra's ICT services capability, this acquisition enables Telstra to provide similar services to customers operating between our region and the UK."

Telstra Global Business Managing Director, Drew Kelton said: "Telstra's and PSINet's complementary product-sets enable both entities to cross-sell and up-sell products to new and existing customers.

Media Release

"I welcome the PSINet management who will become integral members of the Telstra Global team^"

In FY03, PSINet UK's revenue was A\$83m with an EBITDA of A\$20m. It has over 100 staff based in London and Cambridge and operates a 10,000m² data and hosting centre in London. Docklands. It offers a portfolio of managed services to a corporate customer base of 3,200 customers.

Telstra Global offers voice, data, IP and managed services to its 5,000 corporate customers in the UK, Macquarie Bank, Westpac, De Beers and Hilton. Telstra Global Business also has teams in Asia, Australia and the USA serving other MNC customers such as Hyatt, Adobe, Kelly Services and Nokia.

Telstra Media Contact: Warwick Ponder +61 2 9298 4619 $+61409369711$

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