TELSTRA GROUP LIMITED — Capital/Financing Update 2006

Oct 8, 2006

	ASX Krenkr
	Dato: 9 October, 2006
	Key topics
	1. Entitlement offer
	2. Diary adjustments & Netting
	3. Trading & Special Markets 4. Foreign Dwnership
	5. Key Dates
	6. Contact Persons
	Reading List
Banks
	Client Advisers Compliance Managers
	Corporate Advisory
	DTR Operators
Issuers	institutions
	ASTC Participants
	Office Managers Operations Managers (back
office)
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Contact
	James Gerraty (see full list)
	Lalephone
	(03) 9617 7842
	Australian Stock Exchange Ltd ABN 98 008 624 691
	Exchange Centre 20 Bridge Street
	Sydney NSW 2000 PO Box H224
	Australia Square NSW 1215
	Internet: http://www.asx.com.au

TELSTRA CORPORATION LIMITED - T3 OFFER DETAILS (AMENDED CIRCULAR)

This circular provides details of the trading and settlement arrangements in relation to trading in Telstra Corporation Limited shares ("Telstra") following the announcement today, 9 October 2006 by the Australian Government ("the Government") of the sale of a substantial part of its shareholding in Telstra through a public share offer.

Matters addressed are as follows.

• Entitlement offer to eligible Telstra shareholders
• Diary adjustments & Netting
• Trading & Special Markets
• Foreign Ownership ٠
• Key Dates
• Contact Persons $\bullet$

Background

1

On 9 October 2006 the Government announced the sale of a substantial part of its shareholding in Telstra by way of an issue of instalment receipts ("IRs") by Telstra Sale Company Limited ("Trustee"). The Telstra shares that underlie the IRs will be held by the Trustee.

For details refer to Telstra 3 Share Offer prospectus (dated 9 October 2006) which may be viewed at the Telstra 3 Share Offer website (www.t3shareoffer.com.au).

ASX code for the IRs will be TLSCA.

Retail Offer - Shareholder Entitlement Offer

There is a shareholder entitlement offer (which ASX is treating as a Priority Offer) to Australian and New Zealand Telstra retail shareholders on the following basis.

Shareholding	Entitlement
Up to 6,000 TLS	3,000 lRs
6,001 to 400,000 TLS	1 IR for every 2 TLS held (fractions rounded up to the nearest 50 IRs)
Over 400,000 TLS	200,000 IRs

The record date for the Telstra shareholders entitlement offer is Friday, 13 October 2006. In addition to the shareholder entitlement offer, the Retail Offer includes a firm offer and general public offer. There will also be an Institutional Offer, to be conducted following the close of the Retail Offer.

published.

No responsibility is accepted for any inaccuracies contained in the matter

CHESS Diary Adjustments

In relation to the shareholder entitlement offer, existing Telstra shares will trade with an ex date of Tuesday, 10 October 2006 and a record date of Friday, 13 October 2006. Due to the nature of the shareholder entitlement offer, CHESS will not perform any automatic diary adjustments to outstanding cum transactions as at the record date.

Netting

Participants are advised that netting of trades on 6 October and 9 October will not occur. Netting will be reinstated for trades conducted after 9 October.

Primary Market Facility

The firm offer, certain components of the general public offer and the Institutional Offer will be facilitated and settled through CHESS Delivery y Payment (DvP) using the Primary Market Facility.

Trading & Special Markets

From the commencement of trading on Tuesday, 10 October 2006 until the close of trading Friday, 13 October 2006, Telstra shares will trade on ITS on an ex-priority basis "XZ".

Requests for special markets will not be accepted.

Evidence of Entitlement

As Cum buyers are not protected, in order to receive an entitlement, eligible shareholders will need to ensure they are on the register by close of business on Friday, 13 October 2006. There are limited special arrangements for nominees and other persons representing a number of underlying beneficial holdings, which are the subject of a separate circular.

Telstra shareholders whose holding changed between Friday 15 September and Friday 13 October 2006 may have a different shareholder entitlement to that shown on the entitlement application form they receive. New entitlement application forms will be sent to shareholders whose holdings have increased over that period, and they should use that new form. Shareholders whose holdings have decreased over that period should use the entitlement application form sent to them initially, but the Government reserves the right to scale back applications in excess of their actual shareholder entitlement based on their holdings at the close of business on Friday, 13 October 2006.

Foreign Ownership

Participants are advised that Telstra Corporation Limited Instalment Receipts are subject to aggregate foreign ownership restrictions, in accordance with the Telstra Instalment Receipt Trust Deed, and will be included in Schedule 1 of the ASTC Settlement Rules as an FOR security pursuant to ASTC Settlement Rule 5.18.2. Telstra ordinary shares are also included in Schedule 1 as FOR securities, effective 27 October 1998, and this status continues to apply to those ASX quoted securities.

Accordingly, Participants are reminded of their obligations under the ASTC Settlement Rules and should ensure that residency indicators in respect of Holder Records under their control are administered appropriately where it is considered necessary for the purposes of settling and holding the class of Securities listed in Schedule 1.

A summary of the definition of "Foreign Person" is contacted within the T3 Prospectus.

Key Dates (2006)

Monday 9 October	Lodgement of Telstra 3 Share Offer Prospectus with ASIC and formal offer launch
Tuesday 10 October	TLS quoted ex priority (entitlement) (tagged "XZ")
Friday 13 October	Record date for shareholder entitlement (priority) offer
Monday 23 October	Retail offer opens
Thursday 9 November	Retail offer closes (4.00pm local time)
Wednesday 15 November	Institutional Bookbuild opens
Friday 17 November	Institutional Bookbuild closes
Monday 20 November	Listing of IRs on ASX expected to commence (conditional and deferred settlement trading)
Friday 1 December	$T+3$ normal trading expected to commence (following despatch of holding statements the previous day)

ASX Contacts

Trading	Eloise Wett	(02) 9227 0751
	Peter Henderson	(02) 9227 0141
Clearing (CHESS)	Tim Hogben	(02) 9227 0793
	Steven Ball	(02) 9227 0820
Exchange Traded Options	Peter Ho	(02) 9227 0668
Any Other Matters	James Gerraty	(03) 9617 7842