TELSTRA GROUP LIMITED — Capital/Financing Update 2006

Aug 30, 2006

31 August 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

SouFun acquisition complements Sensis growth strategy

In accordance with the listing rules, attached is a copy of an announcement for release to the market.

Yours sincerely

Pont Gration

Douglas Gration Company Secretary

Media Release

31 August 2006

162/2006

SouFun acquisition complements Sensis growth strategy

Telstra today announced the acquisition of a 51 per cent shareholding in SouFun Holdings Limited, China's number one real-estate and home furnishing and improvement website, for a total cash consideration of USD\$254 million.

SouFun provides information, advertising and listing services to China's growing online realestate and home furnishing and improvement sectors. SouFun's primary revenue is generated by online display advertising on the SouFun.com website (www.soufun.com).

Telstra CEO, Mr Sol Trujillo, said: "This acquisition provides high growth opportunities for our Sensis advertising business which will manage SouFun.

"SouFun provides an attractive entry point into China, one of the world's fastest growing economies, allowing Sensis to leverage core capabilities into a larger, faster growing and less mature market than Australia, with high performing, internationally experienced local management."

Mr Vincent Mo, SouFun founder and CEO, will remain a significant shareholder while the balance of the shares will be held by management and IDG, a venture capital firm.

Telstra's Chief Financial Officer, Mr John Stanhope, added: "SouFun is a high growth company and an extremely strong business. SouFun is cash flow positive from day one and is expected to contribute net revenue and EBITDA of A\$52M and A\$18M respectively in FY2007."

Sensis CEO, Mr Bruce Akhurst, said: "Integral to Sensis' growth strategy is the expansion into new geographic markets through the pursuit of partnerships or acquisitions that can deliver clear value to shareholders.

"By expanding our business globally we are able to take our extensive experience offshore and become a leading Australian exporter of IP, while consolidating world best practices and applying them to our existing business operations to stimulate growth," Mr Akhurst said.

SouFun will continue to operate under the leadership of Mr Mo, and SouFun's well established and high-performing local management team. Sensis will add senior representatives with key expertise to Vincent's' team. In the immediate future, Sensis and SouFun will continue to work closely to leverage mutually exclusive business benefits.

Telstra's national media inquiry line is 1300 769 780 and the Telstra Media Centre is located at: www.telstra.com.au/abouttelstra/media

For news, views and discussion on telecommunications in Australia see www.nowwearetalking.com.au

Media contacts:

Prue Deniz, Sensis - 03 8653 7008 & 0438 588 460 Karina White, Sensis - 03 8653 6658 & 0419 523 776 Andrew Maiden, Telstra - 02 9298 5259

® Registered trade mark of Telstra Corporation Limited (ABN 33 051 775 556). Trading Post® is a registered trade mark of Research Resources Pty Ltd, a Trading Post company. CitySearch is a registered trademark of CitySearch Australia Pty Ltd (ABN 48 076 673 857). Sensis Pty Ltd (ABN 30 007 423 912) has responsibility for production of Yellow Pages® and White Pages® directories and related products on behalf of Telstra Corporation Limited and for CitySearch products for CitySearch Australia Pty Ltd and CitySearch Canberra Pty Ltd (ABN 89 082 883 485). ©Telstra Corporation Limited 2006.

Telstra's national media inquiry line is 1300 769 780 and the Telstra Media Centre is located at: www.telstra.com.au/abouttelstra/media

For news, views and discussion on telecommunications in Australia see www.nowwearetalking.com.au

Telstra Corporation Limited ABN 33 051 775 556