TELSTRA GROUP LIMITED — Capital/Financing Update 2007

Mar 14, 2007

15 March 2007

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 announces successful €1 billion bond issue

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

Yours sincerely

Month braking

Douglas Gration Company Secretary

Media Release

15 March 2007

050/2007

Telstra announces successful $61$ billion bond issue

Telstra today announced the completion of a $\epsilon$ 1 billion Eurobond issue having a 4.75 per cent annual coupon and a 10 year maturity of 21 March 2017.

Telstra Chief Financial Officer, John Stanhope, said the bond was more than 5 times oversubscribed with an order book comprising almost 200 individual orders from a wide range of major European and Asian fixed income investors.

"This was a gratifying result and signals Telstra's strong return to the debt capital markets after a successful transition to full privatisation," Mr Stanhope said.

"Despite a challenging international capital market environment, we achieved good pricing and our target volume and maturity levels, which demonstrates the depth and sophistication of the Euro-markets and their long standing support for Telstra. The execution process was conducted well in difficult market conditions - a tribute to the excellent work of the joint lead managers," Mr Stanhope said.

The pricing for bond was equivalent to a margin of 62 basis points over the Euro 10 year midswap level. After swapping into Australian dollars it will provide Telstra with about A\$1.6 billion of cost effective long term funding that will lengthen the average maturity of the debt portfolio.

Issue proceeds will be mainly used for general working capital purposes, with a significant proportion directed to refinancing of short term debt.

The bond issue was jointly led by Barclays Capital, BNP Paribas, Deutsche Bank and JP Morgan.

Telstra is Australia's leading telecommunications services provider with long term rating of A (negative outlook) by S&P, A2 (negative outlook) by Moody's and $A⁺$ (negative outlook) by Fitch.

Telstra Media Contact: Andrew Maiden Mob: 0428 310 700

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

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