TELSTRA GROUP LIMITED — Capital/Financing Update 2006

Nov 16, 2006

17 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

Appendix 3B - New issue announcement, application for quotation of additional securities and agreement

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

Yours sincerely

Pont brak

Douglas Gration Company Secretary

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Telstra Corporation Limited

ABN

33 051 775 556

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

$\mathbf{I}$ ⁺Class of $\dot{}$ securities issued or to be $\vert$ issued

Ordinary shares

• $\overline{2}$ Number of ⁺securities issued or to be issued (if known) or maximum number which may be issued
• 3 Principal terms of the *securities (eg, if options, exercise price and expiry date; if partly paid *securities, the amount outstanding and due dates for payment; if ⁺convertible securities, the conversion price and dates for conversion)

2.15 billion shares underlying an equal number of instalment receipts (subject to upsizing and the ability to over-allocate as described in section 2.2.2 of the T3 prospectus)

Ordinary shares

$\pm$ See chapter 19 for defined terms.

4	Do the "securities rank equally in all respects from the date of allotment with an existing + class of quoted *securities? If the additional securities do not rank equally, please state: the date from which they do the extent to which they participate for the next dividend, (in the of case a trust. distribution) or interest payment the extent to which they do not rank equally, other than in	Yes.
	relation to the next dividend, distribution or interest payment
5.	Issue price or consideration	N/A
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Sell down of the Commonwealth's remaining interest in Telstra.
7	Dates of entering "securities into uncertificated holdings or despatch of certificates	Subject to the issue of instalment receipts to applicants. The transfer of shares will be completed at the same time.
8	Number and + class of all +securities quoted on ASX (including the securities in clause 2 if applicable)	Number + Class 8,147,078,863 (subject FPO to upsizing and the ability to over-allocate as described in section 2.2.2 of the T3 prospectus)

$\sim 10^{11}$

$\epsilon_{\rm c}$

$\mathcal{A}$ , and $\mathcal{A}$ , and $\mathcal{A}$ , and

9	Number and + class of. all *securities not quoted on ASX (including the securities in clause 2 if applicable)	Number 4,295,995,494 (subject to upsizing and the ability to over-allocate as described in section 2.2.2 $\mathbf{0}$ the T3	* Class FPO
10	Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	prospectus) strategy and no further material	The Telstra Board currently intends to declare a 28 cents per share fully franked dividend for financial year 2007 subject to continuing to be successful in implementing the transformation adverse regulatory outcomes during the course of
		financial year 2007. to place risks.	The Telstra Board is unable to give guidance on ordinary dividends for financial year 2008 owing the continuing uncertainty attached to regulatory outcomes and the impact on Telstra's business as well as transformation and market

Part 2 - Bonus issue or pro rata issue

Ħ	holder security approval $\vert$ N/A Is. required?
12 12	Is the issue renounceable or non- $\vert$ N/A renounceable?
13	Ratio in which the + securities will $\parallel N/A$ be offered
14	Class of "securities to which the N/A offer relates
15	determine + Record date to. entitlements	N/A
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	N/A
17	Policy for deciding entitlements in $\mid N/A \rangle$ relation to fractions

$\alpha$ -section $\alpha$ -section

⁺ See chapter 19 for defined terms.

18	Names of countries in which the $N/A$ entity has 'security holders who not be sent will new issue documents
	Note: Security holders must be told how their entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for ٥f receipt acceptances or renunciations	N/A

$\mathcal{O}(n^2)$ , and $\mathcal{O}(n^2)$ , and $\mathcal{O}(n^2)$

$24/10/2005$

$\alpha$ , and $\alpha$ , and $\alpha$ , and $\alpha$

⁺ See chapter 19 for defined terms.

20	Names of any underwriters	N/A
21	Amount of any underwriting fee or commission	N/A
22	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of "security holders	N/A
25	If the issue is contingent on "security holders' approval, the date of the meeting	N/A
26	Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled	N/A
27	If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	N/A
28	Date rights trading will begin (if applicable)	N/A
29	Date rights trading will end (if applicable)	N/A
30	How do + security holders sell their entitlements in full through a broker?	N/A
31	How do "security holders sell part of their entitlements through a broker and accept for the balance?	N/A

• See chapter 19 for defined terms.

32 How do ⁺security holders dispose of their entitlements (except by sale through a broker)?

$N/A$

33	*Despatch date

	--------------------------------------
N/A	_________	-----
	.	----------

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one)
• Securities described in Part 1

$(a)$

All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the ⁺securities are ⁺equity securities, the names of the 20 largest holders of the additional *securities, and the number and percentage of additional *securities held by those holders 36 If the ⁺securities are ⁺equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$ 10,001 - 100,000 100,001 and over
• 37 A copy of any trust deed for the additional +securities

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

38.	Number of securities for which *quotation is sought	N/A
39	Class of 'securities which for quotation is sought	N/A
40	Do the + securities rank equally in all respects from the date of allotment with an existing "class of quoted *securities?	N/A
	If the additional securities do not rank equally, please state: the date from which they do ٠ the to extent which they ٠ participate for the next dividend, (in the case of $\mathbf{a}$ trust, distribution) or interest payment the extent to which they do not ۰ rank equally, other than in relation to the next dividend, distribution or interest payment
41	Reason for request for quotation now	N/A
	Example: In the case of restricted securities, end of restriction period
	(if issued upon conversion οf another security, clearly identify that other security)
		Number	*Class
42	Number and 'class of all 'securities	N/A	N/A
	Anatad an ACV Healedine tha

quoted on ASX (including the securities in clause 38)

Number	*Class
N/A	N/A
	--------

• See chapter 19 for defined terms.

. The continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum continuum conti

$\mathcal{H}^{\pm}$ , $\mathcal{H}^{\pm}$ ,

Quotation agreement

• $\mathbf{1}$ *Quotation of our additional *securities is in ASX's absolute discretion. ASX may quote the "securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not for $\bullet$ an illegal purpose.
• There is no reason why those "securities should not be granted 'quotation. $\bullet$
• An offer of the 'securities for sale within 12 months after their issue will $\bullet$ not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any 'securities to be quoted and that no-one has any right to return any *securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the *securities be quoted.
• If we are a trust, we warrant that no person has the right to return the $\bullet$ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the *securities be quoted.
• We will indemnify ASX to the fullest extent permitted by law in respect of any 3 claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before *quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

14 Thate: 17 November 2006

Sign here:

Company secretary

Print name: Douglas Gration

......................................

1/1/2003

⁺ See chapter 19 for defined terms.