TELSTRA GROUP LIMITED — Capital/Financing Update 2006

Nov 19, 2006

19 November 2006

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 3 Share Offer - Allocation Details

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

Yours sincerely

Pont braking

Douglas Gration Company Secretary

ASX release

TELSTRA 3 SHARE OFFER

ALLOCATION DETAILS RELEASED

Retail Offer

• Final price details for Retail Investors applying under the Australian Retail Offer (comprising the General Public Offer, the Shareholder Entitlement Offer and the Firm Offer) at the Retail Investor price are:
• Final price \$3.60 per share $\Omega$
• First instalment \$2.00 per share $\circ$
• Final instalment \$1.60 per share $\circ$
• Final price details for Retail Investors applying under the New Zealand Offer are:
• Final price \$3.70 per share $\circ$
• First instalment \$2.10 per share $\Omega$
• Final instalment \$1.60 per share $\circ$

Institutional Offer

• Final price details of Institutional Investors applying under the Institutional Offer (and non Australian resident applicants and Retail Investors applying under the Firm Offer at the Institutional Offer price) are:
• $\circ$ Final price - \$3.70 per share
• First instalment \$2.10 per share $\Omega$
• Final instalment \$1.60 per share $\circ$

ALLOCATION DETAILS

• Approximately 2,423 million shares (representing 57% of the Offer) have been allocated under the Australian and New Zealand Retail Offer, comprising:
• Approximately 12% under the General Public Offer. $\circ$
• Approximately 42% under the Shareholder Entitlement Offer. $\circ$
• Approximately 46% under the Firm Offer. $\Omega$
• Approximately 1.825 million shares (representing 43% of the Offer) have been allocated under the Institutional Offer, including shares allocated to Japanese retail investors under the Public Offer Without Listing (POWL).

Freehills

ALLOCATION BASIS

Shareholder Entitlement Offer

All Retail Investors who applied under the Shareholder Entitlement Offer for their entitlement or less have been allocated those shares in full.

Retail Investors who applied under the Shareholder Entitlement Offer for more than their entitlement have received allocations as follows:

Shareholder Entitlement Offer -	Receive
applicants who applied for up to $10,000$ shares	The number of shares they have applied for

Shareholder Entitlement Offer - applicants who applied for more than 10,000 shares, and:	Receive
1. Whose entitlement is less than or equal to 10,000 shares	10,000 shares plus 75% of any additional shares applied for above 10,000 shares, up to a maximum allocation of 100,000 shares
2. Whose entitlement is greater than 10,000 shares but less than 100,000 shares	Their entitlement plus 75% of any additional shares applied for above their entitlement, up to a maximum allocation of 100,000 shares
3. Whose entitlement is greater than or equal to 100,000 shares	Their entitlement with no additional shares

General Public Offer

Eligible Retail Investors who applied under the General Public Offer have received allocations as follows:

General Public Offer applicants who applied for	Receive
Up to 5,000 shares	The number of shares they have applied for
Above 5,000 shares	5,000 shares plus 75% of any additional shares applied for above 5,000 shares up to a maximum allocation of 100,000 shares

Firm Offer

Valid applications by broker firm applicants have been accepted in full.

Details of the pricing and allocation were published in major newspapers on 20 November 2006.

INSTALMENT RECEIPT TRADING

Trading in Telstra instalment receipts on the ASX is expected to commence on a conditional and deferred settlement basis at 11.30am, Sydney time today. The code for Telstra instalment receipts on the ASX is TLSCA.

Trading in Telstra instalment receipts on the ASX is expected to commence on a conditional basis because such trading is conditional on settlement under the International Purchase Agreement relating to the Telstra 3 Share Offer and issue of instalment receipts to successful applicants under the Offer. If these conditions are not satisfied within 10 business days after commencement of conditional trading:

Telstra instalment receipts will not be issued;

Freehills

• the contract formed on acceptance by the Commonwealth of an application for Ă shares in Telstra will be cancelled:
• all conditional trades in Telstra instalment receipts that have occurred on the ASX since conditional trading commenced, will be cancelled.
• After the end of conditional trading, there will be a further period of deferred settlement trading of instalment receipts on the ASX until dispatch of transaction confirmation statements which is expected to occur by 30 November 2006.

ISSUE OF SECURITIES AND TRANSACTION CONFIRMATION STATEMENTS

• Instalment receipts are expected to be issued on 24 November 2006.
• Transaction confirmation statements to successful applicants and refunds to applicants who have applied and paid for shares in excess of their allocation are expected to be dispatched by 30 November 2006.

QUESTIONS REGARDING ALLOCATIONS

• Investors who wish to obtain details of their allocations prior to receiving their transaction confirmation statements may either access the Telstra 3 Share Offer website at www.t3shareoffer.com.au or contact the Telstra 3 Telephone Information Centre (TIC) on 1800 18 18 18 and quote their reference number. Information about all allocations will be available from www.t3shareoffer.com.au or the TIC from 7am today. The TIC's normal operating hours are 8am to 10pm (Sydney time) Monday to Friday.
• It is the responsibility of applicants to determine their allocations prior to trading in Telstra instalment receipts to avoid the risk of selling instalment receipts they do not own. Applicants selling instalment receipts before they receive confirmation of their allocation do so at their own risk.

OTHER INFORMATION

Prepayments

Instalment receipt holders may prepay the final instalment for some (in minimum parcels of 2,000) or all of their registered holding on or before 31 March 2008, and will receive a Prepayment Discount (to the final instalment) if they do so. Instalment receipt holders with a New Zealand registered address will not receive a Prepayment Discount. Prepayment may be made on or by 28 February 2007 and on or by the last day of every month thereafter up until 31 March 2008. To prepay, instalment receipt holders will need to contact the Instalment Receipt and Share Registrar on 1800 18 18 18. If applicants under the Retail Offer elect to prepay the final instalment, they will not receive Bonus Loyalty Shares on the instalment receipts for which they have prepaid the final instalment.

Bonus Loyalty Shares

Those that purchase instalment receipts under the Australian Retail Offer at the Retail Investor price, hold those instalment receipts in the same registered name until 15 May 2008 and pay the final instalment on or by 29 May 2008, will receive one Bonus Loyalty Share for every 25 applicable instalment receipts. However, those that prepay the final instalment will not receive Bonus Lovalty Shares on those instalment receipts in relation to which a prepayment is made.

Media enquiries can be made to Ian Smith of Gavin Anderson on 0418 814 611.