TELSTRA GROUP LIMITED — Capital/Financing Update 2004

Aug 9, 2004

people telecom and Telstra working together

People Telecom is pleased to announce that it has successfully negotiated new wholesale pricing terms with Telstra Wholesale for fixed wire services.

The new agreement allows for people telecom to maintain its gross margins for fixed wire services in this extremely competitive environment for the 2005 financial year and allows it to support its continued aggressive growth plans.

Chief Operating Officer Kazim Reza said "we have had a very strong relationship with Telstra and we are pleased to see that even when retail pricing is under further pressure the relationship continues to support people telecom"

Chief Executive Officer, Ryan O'Hare says "I congratulate the Managing Director of Telstra Wholesale, Ms Deena Shiff and the Team for demonstrating their commitment to Wholesale relationships with service providers and carriers in Australia.

On another note people telecom continues growth in its customers numbers citing its Swiftbroadband customer base has reached 24,000 and its corporate mobile customer base has exceeded 11,000.

For further information please contact:

Rvan M. O'Hare Chief Executive Officer 02 9458 5801 0415 888 500 ryan.ohare@peopletelecom.com.au