TELSTRA GROUP LIMITED — Capital/Financing Update 2005

Jun 13, 2005

14 June 2005

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 Eurobond Issue 2005 - Supplementary Information Memorandum

Please find attached a Supplementary Information Memorandum which has been lodged with the United Kingdom Listing Authority. This updates the original Information Memorandum dated 23 September 2004.

Yours sincerely

Pont Grah

Douglas Gration Company Secretary

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

020 7066 0965

Gelstra

Telstra Corporation Limited $(ABN 33 051 775 556)$

(incorporated with limited liability in the Commonwealth of Australia)

$E8,000,000,000$ Debt Issuance Program

人民政 F. UK Listmes Authority Document Approved $200$ Date: io o Signed: 9

$-0.000$

These supplementary listing particulars ("Supplemental Information Memorandum") are prepared in connection with the es,000,000,000 Debt issuance Program ("Program") of Telstra Corporation Limited ("Issuer") and are supplemental to, and should be read in conjunction with, the information Memorandum dated 23 September 2004 ("Original Information Memorandum"). This Supplemental Information Memorandum comprises supplementary listing particulars as required under section 81 of the Financial Services and Markets Act 2000 ("FSMA").

Copies of this Supplemental Information Memorandum, which comprises supplementary listing particulars approved by the United Kingdom Listing Authority in accordance with Part VI of the FSMA, have been delivered for registration to the Registrar of Companies in England and Wales as required by section 83 of the FSMA.

Arranger JPMorgan

6 June 2005

** ITAL PARE 00 **

Important Notice

Responsibility

Unless otherwise defined in this Supplemental Information Memorandum, terms defined in the Original Information Memorandum have the same respective meaning where they appear in this Supplemental Information Memorandum.

The Issuer accepts responsibility for all information contained in this Supplemental Information Memorandum. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this Supplemental Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information.

Any reference in this document to listing particulars means this document excluding all information incorporated by reference. The Issuer has confirmed that any information incorporated by reference, including any such information to which readers of this document are expressly referred, has not been and does not need to be included in the listing particulars to satisfy the requirements of the Act or the Listing Rules. The Issuer believes that none of the information incorporated therein by reference conflicts in any material respect with the information included in the listing particulars.

This Supplemental Information Memorandum should be read and construed with any amendment or supplement to it, with any Pricing Supplement and with any other documents incorporated by reference as set out under the section in the Original Information Memorandum entitled "Documents Incorporated by Reference" provided always that any such amendment or supplement and any other such documents incorporated by reference shall not form part of the listing particulars or the supplementary listing particulars as comprised by the Original Information Memorandum and this Supplemental Information Memorandum, respectively.

None of the Arranger nor, when appointed, the Dealers makes any representation or warranty, express or implied as to, nor assumes any responsibility or liability for the authenticity, origin, validity, accuracy or completeness of, or any errors or omission in any information statement, opinion or forecast contained in this Supplemental Information Memorandum.

No authorisation

No person has been authorised to give any information or make any representation not contained in this Supplemental Information Memorandum or in the Original Information Memorandum in connection with the Issuer, or its subsidiaries, the Program or the offer or subscription of the Notes. If given or made, such representation or information must not be relied upon as having been authorised by the Issuer or its subsidiaries or the Arranger or, when appointed, any of the Dealers.

Currency of Information

Neither the delivery of this Supplemental Information Memorandum, the Original Information Memorandum or any Pricing Supplement nor the offer or subscription of Notes implies or should be relied upon as a representation or warranty that the information contained in this Supplemental Information Memorandum or the Original Information Memorandum concerning the Issuer or its subsidiaries is correct at any time subsequent to the date of this Supplemental Information Memorandum or that any information supplied in connection with the Program is correct as of any time subsequent to the date indicated.

Distribution

The distribution of this Supplemental Information Memorandum, the Original Information Memorandum and any Pricing Supplement and the offer or subscription of the Notes may be restricted by law in certain jurisdictions. Persons into whose possession this Supplemental Information Memorandum (including any documents incorporated by reference in it) or any Notes come must inform themselves about and observe any such restrictions.

No registration in the United States

The Notes have not been and will not be registered under the Securities Act of 1933 of the United States (as amended), and include Notes in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold, delivered or transferred within the United States or to, or for the account of, U.S. persons (as defined in Regulation S under the Securities Act).

No public offer in the United Kingdom

The Issuer has not authorised any offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended, (the "Regulations") of Notes having a maturity of one year or more which have not been admitted to listing in accordance with Part VI of the FSMA. Such Notes may not be lawfully offered or sold to persons in the United Kingdom except in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Regulations or otherwise in compliance with all applicable provisions of the Regulations.

No offer

None of this Supplemental Information Memorandum, the Original Information Memorandum, nor any Pricing Supplement constitutes nor is it intended to constitute an offer or an invitation by or on behalf of the Issuer, or its subsidiaries, the Arranger or, when appointed, any Dealers to any person to subscribe for, purchase or otherwise deal in any Notes, nor it is intended to be used for the purpose of or in connection with offers or invitations to subscribe for, purchase or otherwise deal in any Notes.

No independent verification

The Arranger and, when appointed, the Dealers have not separately verified the information contained in this Supplemental Information Memorandum or in the Original Information Memorandum. None of this Supplemental Information Memorandum, the Original Information Memorandum nor any other information supplied in connection with the Program is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer, the Arranger or, when appointed, any of the Dealers that any recipient of this Supplemental Information Memorandum, the Original Information Memorandum or any other information supplied in connection with the Program should purchase the Notes nor does it constitute an offer or an invitation to subscribe for Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Supplemental Information Memorandum and the Original Information Memorandum and any purchase of Notes should be based upon such investigation as it considers necessary. The Arranger and, when appointed, the Dealers do not undertake to review the financial condition or affairs of the Issuer during the life of the Program or to advise any investor or potential investor in the Notes of any information relating to the issuer.

No significant change

Save as disclosed in this Supplemental Information Memorandum there has been no significant change and no significant new matter has arisen since the publication of the Original Information Memorandum.

The information set out under the heading "General" on page 9 of the Original Information Memorandum is updated by inserting the following additional paragraph:

Telstra announced continuing revenue growth in its 2004/2005 third quarter market update:

• reported sales revenue grew by 6.5% in the third quarter and 7.4% to A\$16.6 billion year to date;
• underlying sales revenue grew by 3.3% in the third quarter and 4.3% to A\$16.1 billion year to date:
• underlying domestic sales revenue grew by 2.8% in the third guarter and 4.0% to A\$15 billion year to date;
• Internet & IP Solutions revenue grew by 38% in the third quarter and 35% or A\$251 million year to date;
• mobiles revenue grew by 7.6% in the third quarter and 8.3% or A\$238 million year to date; and
• underlying advertising and directories revenue grew by 15% in the third quarter and 8.3% or A\$83 million year to date.

The information set out under the heading "3G wireless service" on page 14 of the Original Information Memorandum is updated by deleting the text from line six beginning "We entered into a network sharing agreement..." to "Brisbane, Adelaide and Perth." and inserting the following:

On 6 December 2004, we signed agreements with Hutchison 3G Australia Pty Ltd (H3GA), a subsidiary of Hutchison Telecommunications (Australia) Limited, to jointly own and operate H3GA's existing third generation (3G) radio access network and fund future development. The final agreements with H3GA create an asset sharing arrangement, where we have acquired a 50% interest in H3GA's existing 3G Radio Access Network (RAN) assets. The purchase price for the 50% interest in the 3G RAN assets was A\$450 million, 5% of which has been paid with the balance payable by instalments until 1 July 2006..

The information set out under the heading "Data and Internet services" on page 16 of the Original Information Memorandum is updated by inserting the following additional paragraph:

On 17 September, 2004, we acquired 100% of the issued share capital of ESA Holding Pty Limited and its controlled entities, Damovo (Australia) Pty Limited and Damovo HK Limited for A\$64.3 million.

The information set out under the heading "Advertising and directories" on page 18 of the Original Information Memorandum is updated by inserting the following additional paragraph:

On 20 December 2004, we acquired Universal Publishers Pty Ltd for A\$46 million, including acquisition costs.

The information set out under the heading "Solutions Management" on page 20 of the Original Information Memorandum is updated by removing the phrase "On 19 July 2004, we completed the acquisition of KAZ Group Ltd (KAZ) for A\$333 million." and replacing it with:

On 19 July 2004, we acquired 100% of the issued share capital of the KAZ Group Limited and its controlled entities for A\$342 million, including acquisition costs;

and inserting the following additional paragraph immediately after the dot points:

On 8 November 2004, we agreed in principle to sell our interest in Infonet Services Corporation to British Telecommunications plc for A\$68.5 million. Once the proceeds of this sale are added to our share sales associated with Infonet's initial public offering in December 1999, we expect to realise a pre-tax gain of approximately A\$164.5 million."

The information set out under the heading "International Investments" on page 21 of the Original Information Memorandum is updated by deleting the phrase at dot point four "On 25 August 2004, we announced our acquisition of PSINet UK for A\$127 million (D50million)." and replacing it with:

On 25 August 2004, we acquired 100% of the issued share capital of PSINet UK Limited and its controlled entities for A\$127 million, including acquisition costs.

The information set out under the heading "Competition Rule" on page 34 of the Original Information Memorandum is updated by deleting the paragraph beginning "A competition notice relating to changes to BigPond Broadband..." and replacing it with:

The ACCC issued a Competition Notice on 19 March 2004 notifying that the ACCC had reason to believe that Telstra was engaging in anti-competitive conduct in breach of the Trade Practices Act 1974 in its supply of broadband ADSL services to wholesale and retail customers. The notice was revoked on 21 February 2005 following an agreement with Telstra resolving the matters raised in relation to the Competition Notice. Telstra did not admit liability for any breach under the Act. Telstra has agreed to adhere to a Notification Protocol for Broadband Pricing Changes for 12 months, in which Telstra must notify the ACCC in advance of future changes to retail broadband prices. Telstra also agreed to work with the ACCC, using independent expert advice, to determine a process for deciding the appropriate price relativities in future, as well as offering its wholesale customers revised pricing and a rebate totalling A\$6.5 million.

The information set out under the heading "Retail price restrictions" on page 35 of the Original Information Memorandum is updated by deleting the paragraph beginning "The Commonwealth Government..." and replacing it with:

The current price control arrangements made by the Minister for Communications, Information Technology and the Arts under the Telecommunications Act 1997 for our local, long distance and international fixed line calls, line rentals and connection services are due to expire on 30 June 2005. At the Minister's direction, the ACCC held a public inquiry in relation to the current arrangements and released a draft report of its inquiry in November 2004. The final ACCC report was released on 30 March 2005, although no Government decision has yet been announced. If the Minister decides to adopt the ACCC's recommendation to implement price controls that are more extensive than under the current arrangements, this may impact upon Telstra's profitability.

The information set out under the heading "Access pricing" on page 37 of the Original Information Memorandum is updated by inserting the following additional paragraph:

On 13 December 2004, we lodged four undertakings with the ACCC specifying the monthly usage charge and the connection and/or disconnection charge for each of Unconditioned Local Loop Service and Spectrum Sharing Service (also known as Line Sharing Service) in 2004/05 and 2005/06. Acceptance of the undertakings will provide certainty in the short term.

The information set out under the heading "Mobile terminating access" on page 38 of the Original Information Memorandum is updated by deleting all text from "The ACCC also proposed new pricing principles..." to "currently subject to an appeal lodged by another carrier." and replacing it with:

The ACCC also decided that the price for Mobile Terminating Access Service ("MTAS") should be reduced. It published pricing principles for MTAS that included a 'glide path' of MTAS prices starting at 18 cents per minute ("cpm") on 1 January 2005 and reducing by 3 cpm over each of the next two years to 12 cpm on 1 January 2007. Until recently, prices for MTAS were approximately 21 cpm. Telstra is a net outpayer of MTAS charges. Vodafone commenced a Federal Court action challenging the validity of the ACCC's pricing principles and lodged an access undertaking with the ACCC containing pricing which is substantially higher than the ACCC's, coupled with a "pass-through safeguard" which sets a maximum retail price for fixed to mobile services provided by an access seeker. Optus has also lodged an access undertaking with higher charges than those determined by the ACCC. The ACCC has commenced a public consultation on the Optus undertaking. Telstra has successfully concluded commercial negotiations with Vodafone and Optus on MTAS pricing.

The information set out under the heading "Universal service and digital data service obligations" on page 41 of the Original Information Memorandum is updated by inserting the following additional paragraph immediately after the second paragraph:

At the direction of the Minister for Communications, Information Technology and the Arts, the Australian Communications Authority (ACA) has conducted a public enquiry and provided advice to the Minister on universal service obligation (USO) subsidies for the 2005-06 to 2007-08 financial years. These subsidies can be claimed by universal service providers (USP) for fulfilling the USO. Currently, Telstra is the sole USP. Subsidies are currently funded by all licensed telecommunications carriers on the basis of eligible revenue. The Minister has determined USO subsidies for the period up to and including 2004-05. The Telecommunications Act 1997 provides that the Minister may determine $\ddot{\cdot}$

subsidies after receiving advice from the ACA. In the past, the Minster has set USO subsidies at a level that has not allowed Telstra to fully recover its costs of fulfilling the USO.

The information set out under the heading "Hong Kong Telecommunications Regulatory Information" on page 44 of the Original Information Memorandum is updated by inserting the following additional paragraph immediately after the first paragraph:

On 18 April 2005, Telstra and PCCW Limited (shareholders in REACH) announced changes to the REACH operational model, including:

• the allocation of dedicated components of REACH's international cable capacity to Telstra and PCCW;
• Telstra and PCCW each paying REACH US\$157 million (in Telstra's case settled by way of a discharge of REACH's liabilities under the Capacity Prepayment Agreement);
• Telstra and PCCW have each committed to funding a half share of REACH's committed capital expenditure (up to 2022) being about US\$106 million each;
• REACH will manage allocated capacity on behalf of Telstra and PCCW and provide Telstra and PCCW with outsourced and other services including data and voice; and
• Telstra and PCCW will each pay REACH an outsourcing fee on a cost-plus mark up basis. Satellite services will be purchased at market rates.

The information set out under the heading "Directors" on page 54 of the Original Information Memorandum is updated by deleting the text in table footnote (2) "On 27 August 2003, the Telstra Board..." and replacing it with:

On 1 December 2004, Telstra announced that its Chief Executive Officer and Managing Director, Dr Zygmunt Switkowski, had agreed with the Telstra Board of Directors that he will step down on 1 July 2005, or earlier if a new CEO is appointed prior to that date.

The information set out under the heading "Capitalisation and indebtedness" on page 60 of the Original Information Memorandum is updated by deleting all of the text under the heading and replacing it with:

The following table has been prepared in accordance with AGAAP (including but not limited to AGAAP applicable to interim financial reporting) and shows our capitalisation extracted from our reviewed half-year financial report for the half-year ended 31 December 2004.

	As at 31 December 2004 (5) (in millions) AS
Short-term debt (1)	3.360
Long-term debt (2)
Telecom/Telstra bonds	2,616
Loans	6,884
Cross currency swap hedge	567
Finance leases	49
Total long-term debt	10,116
Shareholders' equity
Ordinary shares (12,443,074,357 fully paid ordinary shares issued)	5.793
Reserves	(160)
Retained profits $(3)$	9.619
Minority interests	2
Total shareholders' equity	15,254
Total capitalisation (4)	28,730
(1) Includes the current portion of long-term debt. A\$3.355 million of short term debt is unsecured and unquarantee

ed. A\$5 million of finance leases are secured but unguaranteed.

With the exception of the finance leases which are secured but unguaranteed, all long term debt is unsecured and $(2)$ unguaranteed.

• (3) On 10 February 2005, we declared a fully franked interim dividend of A\$0.14 per ordinary share and a fully franked special dividend of A\$0.06 per ordinary share payable on 29 April 2005.
• (4) Total capitalisation consists of short-term debt, long-term debt and shareholders' equity, including minority interests.
• (5) Except as described above, there has been no material change in the consolidated capitalisation or indebtedness of the Company since 31 December 2004.

On 15 November 2004, we completed an off-market share buy-back of 185,284,669 ordinary shares as part of our ongoing capital management program. The ordinary shares were bought back at A\$4.05 per share, for a total value of A\$750 million including both a capital and dividend component. The shares bought back were subsequently cancelled, reducing the number of fully paid ordinary shares on issue. In total, 2.87% of our non Commonwealth owned ordinary shares were bought back.

In March 2005 the Commonwealth Government commissioned a scoping study into the possible sale of its remaining shares in Telstra (being 51.8% of the number of issued shares). The scoping study will examine whether the sale will deliver an appropriate return and, if so, how and when the sale should occur. A sale could occur in one or more tranches and involve a restructuring of Telstra's businesses, as well as share buy backs by Telstra. The scoping study is due to be presented to the Government in the middle of 2005.

The information set out under the heading "Contingent liabilities and contingent assets" on page 60 of the Original Information Memorandum is updated by deleting the text in the first line "30 June 2004" and replacing it with:

31 December 2004

The information set out under the heading "Indemnities, performance guarantees and financial support" on page 61 of the Original Information Memorandum is updated by deleting the text under dot point five and replacing it with:

As at 30 lune 2004, we provided quarantees over the performance of third parties under defeasance arrangements, whereby lease payments are made on our behalf by the third parties over the remaining terms of finance leases. As at 31 December 2004, the lease payments over the remaining period of the leases (approximately 11 years) amount to A\$858 million (30 June 2004: A\$981 million). The reduction is predominantly due to movements in foreign exchange rates and semi-annual repayments.

The information set out under the heading "FOXTEL minimum subscriber guarantees" on page 61 of the Original Information Memorandum is updated by deleting the sentence "These involve commitments for minimum subscriber fees." and replacing it with:

At 31 December 2004, we have commitments of A\$1,704 million (30 June 2004: A\$2,075 million) under these agreements relating mainly to minimum subscriber guarantees. The contingent liability for minimum subscriber quarantees has been adjusted downward from the amount disclosed in our June 2004 financial report as FOXTEL has reviewed the original minimum subscriber guarantee contracts, and reassessed the applicable commitment period for certain contracts;

and deleting the sentence in the second paragraph beginning "As a result, our contingent liabilities..." and replacing it with:

Our contingent liabilities arising from the above agreements have also been adjusted downward by A\$371 million during the period.

The information set out under the heading "(h) other withholding taxes on payments in respect of Notes" on page 104 of the Original Information Memorandum is updated by inserting the following immediately after "section 12-140 of":

Schedule 1 to

The information set out under the heading "(i) supply withholding tax" on page 105 of the Original Information Memorandum is updated by inserting the following immediately after "section 12–190 of":

Schedule 1 to

The information set out under the heading "(i) goods and services tax (GST)" on page 105 of the Original Information Memorandum is updated by deleting "and" at the end of the paragraph.

The information set out under the heading "(k) debt/equity rules" on page 105 of the Original Information Memorandum is updated by deleting "." at the end of the paragraph and replacing it with ".".

The information set out under the heading "Recent Developments" on page 105 of the Original Information Memorandum is updated by deleting all text from "3 Recent Developments" to "foreign exchange gains or losses arising from their holding of those Notes." and replacing it with:

$($ additional withholdings from certain payments to non-residents - section 12-315 of Schedule 1 to the Taxation Administration Act gives the Governor-General power to make regulations requiring withholding from certain payments to non-residents after 1 July 2003.

However, section 12-315 expressly provides that the regulations will not apply to interest and other payments which are already subject to the current IWT rules or specifically exempt from those rules. Further, regulations may only be made if the responsible minister is satisfied the specified payments are of a kind that could reasonably relate to assessable income of foreign residents. The regulations promulgated prior to the date of this Information Memorandum are not relevant to any payments in respect of the Notes. Any further regulations should also not apply to repayments of principal under the Notes, as in the absence of any issue discount, such amounts will generally not be reasonably related to assessable income. The possible application of any future regulations to the proceeds of any sale of the Notes will need to be monitored; and

$(m)$ taxation of foreign exchange gains and losses - Divisions 775 and 960 of the Australian Tax Act contain rules to deal with the taxation consequences of foreign exchange transactions entered into on or after 1 July 2003 (unless a taxpayer elects for them to apply to earlier transactions).

The rules are complex and may also apply to any Note holders who are Australian residents or non-residents that hold Notes that are not denominated in Australian dollars in the course of carrying on business in Australia. Any such Note holders should consult their professional advisors for advice as to how to tax account for any foreign exchange gains or losses arising from their holding of those Notes.

PRINCIPAL OFFICE OF THE ISSUER

Telstra Corporation Limited 242 Exhibition Street Melbourne Victoria 3000

REGISTERED OFFICE OF THE ISSUER

Level 41 242 Exhibition Street Melbourne Victoria 3000

ARRANGER

J.P. Morgan Securities Ltd. 125 London Wall London EC2Y 5AJ

AUDITORS OF THE ISSUER

Ernst & Young 120 Collins Street Melbourne Victoria 3000

FISCAL AGENT

Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB

PAYING AGENTS Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer L-1115 Luxembourg

Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB

AUSTRALIAN REGISTRAR

Austraclear Services Limited 30 Grosvenor Street Sydney NSW 2000

NEW ZEALAND REGISTRAR

Computershare Investor Services Limited Level 2 JD Edwards Building 159 Hurstmere Road Takapuna Auckland 1020

AUTHORISED ADVISER

J.P. Morgan Securities Ltd. 125 London Wall London EC2Y 5AJ

LEGAL ADVISERS

to the Issuer as to Australian law

Mallesons Stephen Jaques Level 50 Bourke Place 600 Bourke Street Melbourne Victoria 3000

to the Issuer as to New Zealand law

Bell Gully Vero Centre 48 Shortland Street Auckland

to the Dealers as to English law

Clifford Chance Limited Liability Partnership 10 Upper Bank Street London E14 5JJ