TELSTRA GROUP LIMITED — Capital/Financing Update 2008

Mar 19, 2008

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20 March 2008

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 Debt Issuance Program – Supplementary Prospectus

Please find attached a Supplementary Prospectus which has been lodged with the United Kingdom Listing Authority. This updates the original Prospectus dated 29 August 2007.

Regards

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Carmel Mulhern Company Secretary

Telstra Corporation Limited ACN 051 775 556 ABN 33 051 775 556

Supplement dated 19 March 2008

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Telstra Corporation Limited (ABN 33 051 775 556) Debt Issuance Program

This supplement ( Supplement ) to the prospectus ( Prospectus ) dated 29 August 2007 constitutes a supplementary prospectus for the purposes of Section 87G of the Financial Services and Markets Act 2000 and is prepared in connection with the Debt Issuance Program ( Program ) established by Telstra Corporation Limited ( Issuer ). Terms defined in the Prospectus have the same meanings when used in this Supplement.

This Supplement is supplemental to, and should be read in conjunction with, the Prospectus. It has been prepared by and issued with the authority of the Issuer and has been approved by the Financial Services Authority in its capacity as competent authority under Part VI of the Financial Services and Markets Act 2000 as a supplement issued in compliance with the Prospectus Directive (Directive 2003/71/EC).

The Issuer accepts responsibility for all information contained in this Supplement. To the best of the knowledge of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this Supplement is in accordance with the facts and does not omit anything likely to affect the import of such information.

Statements contained in this Supplement will, to the extent applicable and whether expressly, by implication or otherwise, be taken to modify and supersede statements incorporated in the Prospectus. To the extent that there is any inconsistency between any statement in this Supplement (or any statement incorporated by reference into the Prospectus by this Supplement) and any other statement in the Prospectus the statements in this Supplement and so incorporated prevail.

Save as disclosed in this Supplement, or in any document incorporated by reference in this Supplement, no other significant new factor, material mistake or inaccuracy relating to information included in the Prospectus has arisen or been noted, as the case may be, since the publication of the Prospectus.

The Investor should be aware of its rights under section 87Q(4) of the Financial Services and Markets Act 2000 .

Supplementary Information

Publication of Interim Results

On 21 February 2008, the Issuer published its unaudited consolidated financial results for the six months ended 31 December, 2007. A copy of those interim unaudited financial statements has been filed with the UK Listing Authority and, by virtue of this Supplement, those interim financial statements are incorporated in, and form part of, the Prospectus.

Any document incorporated by reference into the interim unaudited financial statements described above does not form part of the Prospectus for Prospectus Directive purposes.

Changes to Risk Factors

The text set out under the bullet point headed “Access pricing : ” on page 11 of the Prospectus is deleted and replaced with the following:

9319654_8 / 03-5172-2595

“ The ACCC requires us to provide certain services to our competitors using our networks at a price based on the ACCC’s calculation of the efficient costs of providing these services, or a retail minus avoidable cost basis for resale wholesale services. In many cases we believe that the ACCC proposes prices that are below our efficient cost of supply. The ACCC has issued final determinations on the prices it will allow us to charge for the unconditioned local loop service (" ULLS ") and the spectrum sharing service (" SSS "). We believe that these are extremely important matters for the financial performance of our business. In June 2007, the ACCC issued several draft final determinations in ULLS arbitrations to which we are a party, that proposed to reduce the price from A$17.70 to A$14.40 per line per month in band 2 (metropolitan areas, where the greatest number of ULLS services will be provided). In December 2007 and January 2008, the ACCC made binding final determinations in two of these arbitrations. The final determinations set the band 2 price at A$14.30 until 30 June 2008. The ACCC also decided that Telstra had to reimburse the access seekers for the difference in the price from the date when negotiations between Telstra and the access seekers commenced. In January 2008, Telstra filed in the Federal Court of Australia judicial review applications challenging these final determinations. We are required by law to average our prices for a basic line rental service for all retail customers across Australia, but the ACCC will not follow the same principle for wholesale customers, instead setting ULLS prices which differentiate between metropolitan and non-metropolitan areas (de-averaged prices), well below our estimates of the efficient costs. This will enable our competitors to target customers in higher density areas where access prices are low, leaving us to provide services to some customers in high cost, low density areas at the same retail price as in metropolitan areas. In addition, in July, August and December 2007, the ACCC issued final determinations in a number of SSS arbitrations, significantly reducing the monthly charge to A$2.50 per service. We believe such a low price will lead to accelerated growth in SSS enabling our competitors to provide broadband and VoIP services with greater growth opportunities while we are restricted to supplying basic access services. In addition, we believe such reduced access prices are likely to lead to a reduction in our retail prices. The ACCC also decided that Telstra had to reimburse the access seekers for the difference in the price from the date when negotiations between Telstra and the access seekers commenced. In August 2007 and January 2008, Telstra filed in the Federal Court of Australia judicial review applications challenging these final determinations. The Federal Court heard some of these applications in December 2007 and reserved judgement. On 13 February 2008, the Government introduced a Bill, which, if passed in the form in which it was introduced, would preclude one of the grounds of challenge in the ULLS and SSS judicial review proceedings. The ACCC is yet to make final decisions in a number of remaining ULLS and SSS access disputes. When the ACCC makes its final decisions, it may find that Telstra has to reimburse the access seekers for the difference in the access charges from the date on which the various access seekers lodged their access disputes or from a point prior to that time when negotiations between Telstra and the access seekers commenced. ”

The text set out under the bullet point headed “ Conduct regulation: ” on page 12 of the Prospectus is deleted and replaced with the following:

“The ACCC is empowered to regulate conduct in, amongst others, the telecommunications industry and may in the future regard our conduct to be a breach of the TPA. For example, a refusal by us to supply services to our competitors for what we believe to be normal commercial reasons may in the ACCC’s view, be a breach of the TPA. We believe that should the ACCC allege that we have engaged in anti-competitive conduct, it will rely upon a power which it has under the TPA to issue a "competition notice" and the potential for very large fines in an endeavour to have us modify what we believe to be normal commercial behaviour. We will defend our right to act in what we believe to be a normal commercial manner.”

The text set out under the bullet point headed “ Wide ministerial and regulatory discretion: ” on page 12 of the Prospectus is deleted and replaced with the following:

“The Minister has broad and largely discretionary powers to impose and vary licence conditions and other obligations on us. For example, the requirement to operate separate retail, wholesale and network business units (“operational separation”) places a burden on

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us with numerous restrictions imposed on the way we run our business. However, the real risk with operational separation lies in the power of the Communications Minister to determine the way we conduct our business by directing us to vary our operational separation plan, subject only to the aims and objectives of the legislation which are very broad. In addition, we are subject to retail price controls – for example, we are not allowed to charge residential customers for directory assistance (even customers of our competitors), but there is no such restriction on our competitors charging for these services. Also, we are obliged to make certain uneconomic services available in rural and remote areas, without receiving what in our opinion is a fair contribution to our costs from our competitors. Further, the ACCC has broad discretionary powers and is not subject to ministerial oversight or direction. Specifically, in relation to the shut down of our CDMA network, the Minister has postponed the closure of the CDMA network until 28 April 2008, subject to approval from the Minister. This has delayed us from shutting down the CDMA network – which is being replaced by our NextG™ wireless network – thus delaying the cost-savings from shutting down the CDMA network until at least 28 April 2008.”

The text set out under the bullet point headed “ Regulation constraining investment decisions: ” on page 12 of the Prospectus is deleted and replaced with the following:

“We have announced our proposal to invest A$4.1 billion to build a high-speed broadband network to 5 million homes in 5 capital cities and the Gold Coast using fibre to the node (“ FTTN ”). However, this proposal is conditional upon legislative changes to protect this investment from the risk of regulated access at prices which do not afford a competitive return on the investment. The previous coalition Government established an Expert Taskforce to determine criteria for, and to evaluate, competitive bids to build a metropolitan high-speed broadband network, including any required regulatory reform to facilitate the investment. With the change in government in December 2007 the new Labor Government disbanded the previous Government's Taskforce but has established its own Expert Panel to essentially undertake the same exercise for the Labor Government’s national broadband deployment policy. A consortium of 9 competitors known as the G9 is expected to bid. We have said that we will also bid. There is a risk that a competing metropolitan or national broadband proposal will be selected, which will prevent us from pursuing our proposal. This may significantly impact our fixed line copper network and business and may necessitate legal action to seek appropriate compensation for the confiscation of our network assets.

As part of the Expert Panel process Telstra has received a request from the Minister for Broadband, Communications and the Digital Economy for the provision of various items of Telstra's existing network information which the Commonwealth wishes to provide to potential bidders to enable them to formulate proposals in relation to a possible Fibre To The Node network. Telstra has responded to the Minister's request by proposing to provide a set of existing network information subject to security safeguards and the full indemnification of Telstra by the Commonwealth. The Government is expected to introduce legislation to require the provision of such network information in the near future. There is a risk that the legislation will not meet Telstra's requirements or protect Telstra from claims in relation to the information. There is also a risk that provision of that information will be damaging to Telstra's commercial interests and the security of Telstra's networks.”

The first bullet point on page 13 of the Prospectus is updated by deleting the words “recently launched”.

The heading “Future sales of a substantial portion of our shares by the Future Fund could depress the market price for our shares and other equity interests” on page 17 of the Prospectus is updated by inserting in substitution for the second sentence of the second paragraph the following:

“While the previous Government stated that it did not intend to issue directions specific to Telstra shares (except to impose the escrow and require the sell-down), the current Government has not advised us of its policy on this matter. The current or a future Government might take a different approach, using its direction power to require the disposal or voting of the Telstra shares held by the Future Fund to pursue Government objectives.”

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The heading “We are in the process of deregistering from the SEC” on page 18 and the first paragraph under it are deleted and replaced with the following:

“ We have deregistered from the SEC

Following the adoption of new SEC regulations making it easier for foreign companies to terminate their SEC registration, we have delisted our ADRs from the New York Stock Exchange (“ NYSE ”) effective from 4 September 2007.”

The heading “OTHER RISKS” on page 18 of the Prospectus is updated by deleting “, is seeking to change rates on our infrastructure” and replacing it with the following:

“has introduced the Utilities (Network Facilities Tax) Act 2006 which imposes a tax on our network infrastructure in the ACT,”

Changes to Corporate Profile

The Revenue Growth and EBITDA lines in the information set out in the table under the heading “Long term management objectives” on page 23 of the Prospectus are deleted and updated as follows:

“ Revenue Growth 2.5% to 3.0% per annum up to the fiscal year ending 30 June 2010” “ EBITDA ($) growth 2.5% to 3.0% per annum growth up to the fiscal year ending 30 June 2010“

The second paragraph under the heading “Next G[TM] Wireless Network” on page 26 of the Prospectus is updated by deleting and replacing it with the following:

“As at January 2008, Telstra’s Next G™ wireless network was Australia’s fastest and largest national mobile network, offering video calling, content and features as well as super fast mobile internet services to around 99% of Australians and covers over 100 times more area than any other Australian 3G network. The Next G™ wireless network delivers wireless broadband over High Speed Packet Access (“ HSPA ”), with the entire network offering 14.4 Mbps peak network downlink speeds and delivers advanced services including video calling and rich media content such as mobile TV (Telstra mobile FOXTEL™ and BigPondTV), music and video downloads.”

The fifth paragraph under the heading “Next G[TM] Wireless Network” on page 26 of the Prospectus is updated by deleting the first sentence and replacing it with the following:

“To reduce network duplication, Telstra (subject to Minister approval) is planning to close down the CDMA network on 28 April 2008, continuing to use much of the infrastructure for the Next G™ wireless network.”

The first line under the heading “Telstra Next IP[TM] Network” on page 26 of the Prospectus is updated by inserting before the second “the” the following:

“at the time of launch,”

Under the heading “CDMA digital services” on page 27 of the Prospectus the words “will remain in place until 28 January 2008” are deleted and replaced with the following:

“(subject to Ministerial approval) has a planned shutdown date of 28 April 2008”

Under the heading “Wholesale services (including inter-carrier services)” on page 29 of the Prospectus the last sentence of bullet point 4 is amended to delete “28 January 2008” and replace it with “28 April 2008 (subject to Ministerial approval)”.

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In the first table under the heading “”Directors” on page 31 of the Prospectus the line starting with “Belinda J Hutchinson” is deleted.

The paragraph beginning with “Belinda J Hutchinson BEc, FCA” on page 32 of the Prospectus is deleted in its entirety.

Under the heading “Resignations” on page 32 of the Prospectus the sentence “During the year and through to the date of this prospectus, no directors resigned or retired.” is deleted and replaced with the following:

“Belinda J Hutchinson was a non-executive director of the Telstra Board and did not stand for re-election to the Telstra Board at the Annual General Meeting on 7 November 2007. Ms Hutchinson’s second term as a Telstra director expired at the Annual General Meeting and as such she retied from the Telstra Board on 7 November 2007.”

The information set out under the heading “Company Secretary” on pages 32 and 33 of the Prospectus is deleted and replaced with the following:

“Mr Douglas Gration was the Company Secretary of Telstra until he left Telstra and stepped down as Company Secretary on 7 September 2007.

The Board appointed Ms Carmel Mulhern as company secretary on 7 September 2007. Ms Mulhern is currently on maternity leave until early 2008 and the Board has appointed Ms Claire Elliott as an Assistant Company Secretary to undertake the statutory and administrative duties of the company secretary during this period.

Carmel C Mulhern – BA, LLM Company Secretary since 7 September 2007

Ms Mulhern joined Telstra in July 2000 as Corporate Counsel and was previously General Counsel Finance and Administration. In those roles she has been responsible for Telstra's continuous disclosure compliance, preparation of the annual report and all legal aspects of the annual general meeting and annual financial results announcements. She played a key role in the T2 and T3 floats, Telstra's first off-market share buy-back and the introduction of the dividend reinvestment plan.

Claire E Elliott – BA, Grad Dip Info Studies, Grad Dip Applied Info Sys Company Secretary since 7 September 2007

Ms Claire Elliott is Assistant Company Secretary, Subsidiaries, Board and Shareholder Services. Claire is Company Secretary of all Telstra subsidiaries including the Telstra Foundation. During her time at Telstra she has worked on all three privatisation tranches and overseen the implementation of Telstra’s two buy-backs and DRP scheme. Ms Elliott has been appointed to undertake the statutory and administrative duties of company secretary whilst Ms Mulhern is on maternity leave.”

The last sentence under the heading “John Stanhope - B Com (Economics and Accounting), FCPA, FCA, FAICD, FAIM” on page 34 of the Prospectus is deleted and replaced with the following:

“John is a director or Telstra Super, TelstraClear, Sensis, SouFun and the Telstra Foundation, and is Chairman of CSL New World Mobility Ltd and 3GIS and an alternate director of FOXTEL.”

The second sentence under the heading “William J Stewart - B Sc (Mathematics and Physics)” on page 34 of the Prospectus is deleted and replaced with the following:

“Bill is also a board member of CSL New World Mobility Ltd, REACH and FOXTEL.”

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“

The first table under the heading “Directors” on page 35 of the Prospectus is deleted and replaced with the following table:

“

	Number of shares held
	Direct interest Indirect interest(1) Total(2)
Donald G McGauchie Solomon D Trujillo Geoffrey Cousins Catherine B Livingstone Charles Macek John W Stocker Peter J Willcox John D Zeglis	33,508 103,585 137,093 250,000 - 250,000 - 9,979 9,979 15,079 58,766 73,845 3,094 136,284 139,378 8,225 140,583 148,808 - 67,336 67,336 16,500 13,563 30,063

Changes to Legal Proceedings

Under the heading “C7 litigation” on page 36 of the Prospectus the last paragraph is deleted and replaced with the following:

“Seven sought damages and other relief, including that some of these contracts and arrangements are void. Seven also sought orders which would, in effect, require a significant restructure of the subscription television/sports rights markets in Australia. On 27 July 2007 the Federal Court dismissed Seven’s case on all grounds. Final orders have been made and in December 2007 Seven paid Telstra $13 million for costs. Seven has appealed some aspects of the decision, and the appeal hearing is anticipated to be in mid to late 2008. In light of the progress of this case to date, Telstra considers that it is unlikely to have any material effect on our overall business or financial position.”

Under the heading “Shareholder class action” on page 36 of Prospectus the last two sentences are deleted and replaced with the following:

“The claim has been settled on the basis that Telstra pay A$5 million and the proceeding be dismissed. The settlement has been approved by the Federal Court and the settlement amount has been paid.”

All paragraphs under the heading “Telstra v Commonwealth of Australia & Or” on page 36 of the Prospectus are deleted and replaced with the following:

“On 24 January 2007, Telstra commenced proceedings in the High Court of Australia against the Commonwealth of Australia, the ACCC (the regulator) and 11 access seekers who, prior to 24 January 2007, had lodged access disputes with the ACCC in relation to the unconditioned local loop service (“ ULLS ”) and/or the high frequency unconditioned local loop service (“ LSS ”) declared by the ACCC pursuant to section 152AL of the TPA. In these proceeding Telstra argued that Part XIC of the TPA (the telecommunications specific access regime) is constitutionally invalid insofar as it applies to ULLS and/or LSS as it affects an acquisition of property due to the nature of those services and that the TPA does not provide “just terms” compensation for such acquisition of property. The matter was heard before the Full Court of the High Court on 13 and 14 November 2007.

On 6 March 2008 in a unanimous decision the High Court found that, because the PSTN (to which ULL and LSS relates) was subject to a legislative regime that gave access rights to competitors at the time that Telstra was corporatised while still in Commonwealth

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ownership, the PSTN vested in Telstra subject to those access rights and thus the access regime in Part XIC does not work an acquisition of the resulting property rights of Telstra in those assets.

Telstra does not consider that the outcome of these proceedings materially adversely affects its overall business or financial position.”

Under the heading “Changes to Commonwealth control after close of Global Offering” on page 38 of the Prospectus the last paragraph is deleted and replaced with the following:

“We are no longer required to appear before and provide information to Commonwealth appropriations-related Parliamentary committees.”

Change to Summary of the Program

The following is inserted above the heading “ Redemption: ” in the Summary of the Program on page 9 of the Prospectus:

“ Change of control: If the relevant Final Terms states that a change of control applies in respect of the Notes, the terms of that change of control provision will be as set out in such Final Terms.”

Change to Terms and Conditions of the Notes

The following is inserted as a new Condition 15.4 of the Terms and Conditions of the Notes on page 54 of the Prospectus:

• “ 15.4 Change of control

If the relevant Final Terms states that a change of control applies in respect of the Notes, the terms of that change of control provision will be as set out in such Final Terms.”

Change to Form of Final Terms

The following is inserted as a new paragraph 34 in the Form of Final Terms on page 109 of the Prospectus:

“34 Change of control: [Not applicable/The provisions set out below apply.]

[ If applicable, give details of change of control provision ]”

The other paragraphs in the Form of Final Terms shall be re-numbered accordingly.

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