15 February 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

CEO letter to shareholders, half-year review and BACK Telstra brochure

In accordance with the listing rules, attached are copies of documents to be sent to shareholders.

Yours sincerely

Pont Gration

Douglas Gration Company Secretary

15 February 2007

Financial results better than guidance for half-year ended 31 December 2006

Dear shareholder

I am writing today to keep you informed, as a shareholder, about the progress we are making in the transformation of Telstra's business and, specifically, to share our half-year results directly with you. I continue to be encouraged by the progress we are making.

Today we announced important achievements in our performance:

earnings results that are ahead of market quidance;
market share gains especially where it matters (e.g. broadband and mobiles);
gains in fixed-line residential market share and a slowdown in PSTN (fixed line) decline;
a highly-successful launch of our wireless broadband Next G™ platform;
strong revenue growth in directories and online content; and
improved service-level ratings across the board.

These achievements reflect the impact of our transformation process, which is on or ahead of plan on all fronts, touching every element of our business - even though we are only 13 months into a five-year transformation and much remains to be done. Following the recent Telstra share offer ("T3"), we welcomed tens of thousands of new shareholders. Since that time we have seen institutional investors embrace our commitment and, increasingly, our ability, to deliver on plan - including improvement in long-term shareholder value - a result already reflected in the share price. Our record continues to show a consistent alignment between words and deeds, between promises and performance.

The results we released today are a reflection of competing hard, winning where it matters and improving our operational metrics. We have maintained momentum in the past half-year, notching up a string of firsts as we execute our five-year transformation strategy:

First: launched Next $G^m$ , our 3GSM 850 nationwide wireless broadband network reaching 98% of the people in Australia;
First: built a Next $G^{\text{m}}$ national network in record time 10 months;
First: upgraded the network's speeds to 14.4 Mbps giving Australia the world's fastest nationwide wireless broadband network;
First: extended Next G™ network range up to 200km (at selected sites);
First: reached one million 3G customers in a record-setting 16 months;
First: launched national high-speed ADSL with network speeds up to 20Mbps;
First: maintained retail broadband average revenue per user (ARPU) at second half financial year 2006 levels while growing market share to 45% (up 1%);
First: achieved positive PSTN (fixed line) residential churn (gaining more fixed-line customers from competitors than we lost) since October 2006 - first time since the advent of competition;
First: achieved increase in residential fixed-line market share first time since the advent of competition;
First: achieved highest customer satisfaction performance on record for Telstra Enterprise and Government; and
First: achieved a reduction of more than 80% in unsatisfied demand for ADSL broadband (called "held orders") from 19,300 in September 2005, despite increasing order volumes.

We have broken new ground with these firsts. Other highlights over the last six months include the following:

Improving productivity: improved service ratings and increasing revenues were achieved while reducing the total workforce by 4,596 (pre acquisitions and investments) since 1 July 2005. We are on track to achieve our target reduction of 6,000 to 8,000 by 30 June 2008. Labour costs are down 2.8%;
Improving service: we increased scheduling flexibility for our customers, meeting more than 90% of our appointments and completing 97% of PSTN service calls completed on the first attempt;
Improving the customer experience in the field, on the phone and online with 6,400-plus staff participating in the Telstra Learning Academy to advance their product knowledge, customer service and technical skills; and
Expanding new revenue where online businesses at Sensis and BigPond continue to fuel growth.

Financial Results

Our sales revenue grew 3.6% (adjusted for deferral in distribution of Melbourne Yellow™ book) which continues the strong run rate of the second half of the previous financial year and also better than our quidance for the full year of 1.5% to 2%.

On mobiles, for example, we added more than 700,000 3GSM customers in the half, a growth rate of 223% on June 2006. This included 280,000 customers to the Next G™ network between October 6 and December 31. This resulted in revenue growth of 11.8% to \$2.8 billion as our 3G customers generate \$20 per month more ARPU than our 2G customers, from higher use of video calling and data services;
On Retail broadband, our customer growth rate was 55% and revenue was up 50% to \$497 million; broadband customers and market share gains continued to drive growth in a very competitive market;
Our online usage at Sensis grew 21% with sales revenue up 7% to \$885 million (on a normalised basis): Sensis is now much more than Yellow and White Pages, with emerging new media revenues growing 68%.

At the full year results in August 2006 and in the T3 prospectus, we forecast half-year earnings before interest and tax (EBIT) to decline between 17% and 20%. Our actual result beat this forecast, with EBIT declining by 15.7% or \$546 million to \$2.9 billion.

We recorded positive residential churn volumes each month since October, as we gained fixed line customers from competitors. We continued to slow the decline in our traditional fixed line (PSTN) revenues. We improved the rate of retail line loss by 2% as the first half revenue decline slowed to 5.6%, compared with 7.6% in the prior corresponding period.

Given the fact that our top line growth was strong, it was operating expenses - transformation related costs along with marketing, subscriber acquisition and recontracting costs - that contributed to the EBIT decline. However, by incurring these costs now we lay the foundation to improve earnings in the future.

Dividend Status

As a result of our strong revenue performance and increased spend in our transformation, we announced a profit after tax today of \$1.7 billion for the half, down \$430 million or 20.1% on the prior corresponding period. Telstra's Board of Directors declared a fully franked interim ordinary dividend of 14 cents per share, payable on 30th March 2007. Please refer to the attached new look half-year review for a more detailed analysis of the first half financial results.

Outlook ... Guidance

We are raising our financial year 2007 revenue and earnings quidance to reflect trends evident in the first half. Apart from this change we have not changed our financial year 2007 guidance from those published in the T3 prospectus, and you should $expect¹$ :

Full year revenue growth of between plus 2.5% to plus 3.0% (up from plus 1.5% to plus 2%);
Second half EBIT growth of between plus 37% to plus 40%;
Full year EBIT growth of between plus 3% and plus 5% (up from plus 2% to plus 4%); $\bullet$
Full year cash operating capital expenditure of between \$5.4 to \$5.7 billion; and
Dividends the Board intends to declare a fully franked final ordinary dividend of 14 cents a share. $\bullet$

As we continue to transform our networks and systems, we are well positioned to take advantage of new media communications opportunities in the coming years due to our portfolio of integrated assets - especially emerging and online businesses within Sensis and BigPond. To maintain the momentum in executing our transformation, significant investment is required for the remainder of the financial year - the peak transformation spend year.

Assumes: no FTTN build; a Band 2 ULL price of \$17.70 applying for wholesale customers for the remainder of financial year 2007; no additional redundancy and restructuring provision; and, financial year 2007 being the largest transformational spend year

However, we have reached a pivot point in our earnings with positive earnings growth to resume in the second half. I am proud of the management team and the entire employee base whose tireless work is making it possible for us to execute on our aggressive transformation plan. Our substantial achievements reflect their many talents and their dedication to the tasks before us.

Fixing the regulatory environment

Regulations continue to have a negative effect on our results and create a less-than-friendly investor environment - not only for Telstra but for the industry as a whole. For example, decisions by the regulator taken in August on the Unbundled Local Loop (ULL) and in December on Line Sharing Service (LSS) cut our wholesale prices more than 20% despite the rising costs of copper, fuel, labour and vehicles.

The backward looking regulations limit our ability to make investments in high-speed fixed broadband that can create new assets for consumers, businesses, communities and the nation, while at the same time permitting a competitive return for shareholders. That's why we are seeking regulatory reform and why it is so important.

Our reform initiatives include:

a High Court challenge to protect the interests of shareholders;
a Broadband Australia Campaign (called BACK Telstra) to educate the public about these issues; and
the establishment of Telstra Active Supporters to enable shareholders and the public to join together to express their views about the need for high-speed broadband so that Australia will not be left behind.

I invite you to learn more about these reform issues and their impact on Telstra's financial performance. An interesting and convenient way is to visit our website, www.nowwearetalking.com.au, where you can register your interest, receive regular updates on important reform issues, and find out about ways you can actively help.

The Board and I remain committed to keeping you informed about Telstra's transformation with reqular updates, special notices when appropriate, and through periodic emails. If you have not already done so, please send us your email address. We promise to use it sparingly and only for the most important notices.

For more information visit our Investor Relations website at www.telstra.com.au/abouttelstra/investor where you will find share price details and other shareholder services; or www.nowwearetalking.com.au where you can learn more about the digital revolution and engage with others to bring the benefits of high-speed broadband and the digital age to all Australians; or [email protected] where you can easily send us your email address so we can communicate with you faster with less postage.

Please contact us with any questions or comments at [email protected] or write to me directly.

Yours sincerely

Adid 1 1 Index

Sol Trujillo Chief Executive Officer

Half year review

pa2. Transformation | pa3. Financial Review | pa4. Regulation

World Leaders ® Telstra's Next G™ network accelerates to 14.4Mbps

Telstra's \$1.1 billion Next G™ network, is now the world's fastest national wireless broadband network. The Next G™ network brings video calling, content and features on wireless broadband to more Australians than ever before, including many Australians in regional, rural and remote areas who can now access broadband for the first time.

Ahead of schedule, Telstra increased peak network download speeds from 3.6 megabits per second (Mbps) to 14.4 Mbps. The higher peak network speeds mean quicker average speeds for customers, with the typical user download speeds increasing to between 550 kilobits per second (kbps) and 3 Mbps - up from the previous range of between 550 kbps and 1.5 Mbps.

We expect to further improve on this achievement by early 2009 with peak network speeds of 40 Mbps.

In another world first, and ahead of schedule, the Next G™ network range has been extended up to 160km nationwide on 15 February 2007 - and up to 200km at selected sites. This is an increase of 120km since the launch of the Next G™ network in October 2006.

"I'm stunned with the speed and reliability of the broadband in a place as remote as Jamieson. It's magic." CFA Staging Manager

More than 400,000 Australians have said hello to the next generation of speed and content since the launch of the Next G^TM network.

The Next G⁷⁶ network allows customers to do more things in more places. Customers are using Whereis* on their mobiles to find directions, e.g. the nearest restaurants, maps ...

Customers are using their Next G^rw mobiles to catch the latest news or sports results on FOXTEL™ by mobile in real-time, and now four new channels have been added to the Telstra exclusive service: Eurosport News, TV1, Cartoon Network and National Geographic.

Customers are using their Next G⁷⁶ mobile phones and laptop wireless cards to download music, check emails and connect to the internet. Using mobiles has never been easier with just one-click on the "My Place" icon, only available on Telstra's Next G™ phones.

Although the Next G™ network has only been in

operation for a few months, customers are already experiencing the benefits of the Next G²⁶⁶ network first hand.

Using Next G^™ network coverage and speed to fight bushfires

During the Christmas bush fires in Victoria, the volunteers of the Country Fire Authority (CFA) were impressed with the speed and reliability of the Next G^TM wireless cards. The cards provided real time access to fire information from the Department of Sustainability and Environment and weather information from the Bureau of Meteorology. This information helped the firefighters on the front line fight the fires in the most effective way while minimising the threat to people and property from the rapidly moving flames.

The Telstra Next G™ network - using mobiles and turbo wireless laptop cards opens the door to new business applications and is making Australian businesses alobally competitive:

Transport and logistics companies are monoging their fleet real-time;
Architects and engineers can get video updates of progress from construction sites;
· Real estate agents can show clients interiors and upload the video websites remotely; and
. Car assessors can take pictures of damaged vehicles and order the necessary parts at the same time while on the road.

"Next G"" is fast and reliable and with just one click our people have secure access to our private corporate network"

Bradstreet Motor Group's IT Manager, Newcastle

The Next G™ network has already caused a paradigm shift in how Telstra's customers live, work and play and is only limited to your imagination. The Next G™ network is: faster, simpler, real time, and everywhere you need it.

NEXT G™ NETWORK FAST FACTS

Over \$1 billion investment
98.8% population coverage and
1.9 million square kms covered
. Over 5,000 mobile base stations
415,000 customers at 13 February 2007
More than 100 times bigger than any 3GSM network in . Australia

NEXT G^INNETWORK FIRSTS

· Launched 3GSM 850 national wireless broadband network
· Network built in a record 10 months
· Nationwide upgrade to peak network download speeds of 14.4 Mbps
· Network range extended from 80kms to 200kms at selected sites

NEXT G DOWNLOADS

To learn more about the Next $6^{\mathrm{th}}$ network and how you can experience the benefits of the superior coverage, speed and content visit: www.telstra.com.du/NextG

Transformation: on or ahead of plan

The transformation is on or ahead of plan on all fronts: we are winning where it matters in 3G, broadband, Sensis and fixed line products; we are improving operational performance; and we are investing for competitive advantage.

IN BRIEF

Launched Next G™ network
Upgraded peak speeds on Next G^TM network to 14.4 Mbps
IP/MPLS core and Multi Service Edge - turn up nearing completion
80% out-of-the-box requirements achieved
Exited 148 IT systems
MBM driving improvements in sales and customer experience
6,900 Telstra vehicles fitted with GPS devices

Telstra plans to Broadband Australia

Telstra is firmly committed to providing highspeed broadband across Australia.

Telstra's commitment to providing high-speed broadband across Australia at the earliest possible date is already reflected in the following two milestones in the half-year:

The October 2006 launch of the world's leading Next G^rw wireless broadband network; and
. The November 2006 launch of BigPond's broadband upgrade - a nationwide high-speed fixed line ADSL broadband network offering speeds up to 8 Mbps or 20 Mbps, depending on location.

Telstra is currently seeking \$600 million in funding under the Australian Government's Broadband Connect Infrastructure program to bring broadband to the nation's under served areas. Telstra's proposal would extend fixed broadband coverage from the current 91% of the population to 95% of the population.

Telstra has demonstrated it's the only operator in Australia with the vision, leadership, knowhow and willingness to invest billions of dollars in building new networks. However, because of regulatory constraints, the up to 20 Mbps service is limited to exchanges where competitors are also offering those higher speeds - and the Fibre-tothe-Node (FTTN) network build cannot proceed without regulatory reform safeguards to protect shareholders' investments required to build FTTN. Without regulatory reform, Australia will continue to trail other leading OECD countries in broadband penetration and speeds. For Australia to join the critical next wave of broadband infrastructure investment, the regulatory regime must enable Telstra to earn a competitive return on the investments it makes on behalf of shareholders.

To 'kick-start' the high-speed broadband debate, Telstra has launched the Broadband Australia Campaign (BACK Telstra). We have also established the Telstra Active Supporters (TAS) group to enable

all Australians who share Telstra's concerns to become active and support the BACK Telstra campaign.

To learn more about BACK Telstra and find out about ways you can actively help, and to register as a Telstra Active Supporter, visit our website, www.nowwearetalking.com.au

Authorised by L McGregor, Telstra Corporation Limited, 242 Exhibition Street, Melbourne, VIC 3000

Revenue up, earnings pivot point reached

Sebected Resou from the $\sim$ income statement	6 months to Dec 2006 . sm	6 months to $\sim$ Dec 2005. ≴ma.	change
Sales revenue	-11,630	11,405	$-2.0$
Total income (excluding finance income)"	11,797	11,544	$2.2^{\circ}$
Operating expenses ²	6,881	6,260	9.9
Earnings before interest, income tax expense,
depreciation and amortisation (EBITDA)	4,916	5,284	(7.0)
Earnings before interest and tax (EBIT)	2,938	3,484	(15.7)
Net finance costs	520	. 440	-18.2
Profit before income tax expense	2,418	3,044	(20.6)
Income tax expense ³	706	902	(21,7)
Net profit	1,712	2,142	(20.1)
Outside equity interests in net (profit)/loss	(8)	-1	$n/m$ .
Net profit available to Telstra Entity shareholders	$-1,704$	2,143	(20.5)
Basic earnings per share	13.8	17.3	(20.2)
Interim dividend declared per share (cents) $^{\rm 4}$ .	14.0	14.0
Special dividend declared per share (cents)		6.0	n/m

1 Total income (excluding finance income) increased by 2.2% or \$253 million to \$11,797 million, due to:
· sales revenue increasing by 2.0% or \$225 million to \$11,630 million mainly due to growth in mobiles, broadband and IP access. The market continues to move towards mobile and broadband products to satisfy their telecommunications reaufrements:
· other revenue/other income grew by 20.1% or \$28 million to \$167 million largely due to the sale of Australian Administration Services Group; and
· revenue growth was negatively impacted by a decline in PSTN revenue, specialised data, narrowband and advertising and directories (due to deferral of Melbourne Yellow™ print directory production to January 2007). If \$174 million from the prior period relating to this print directory is removed, total income grew by 3.8%.

Sales revenue

2 Operating expenses increased by 9.9% or \$621 million to \$6,881 million, due to
· increased goods and services purchased of 16.9% or \$371 million, attributable to higher handset subsidies from both the take up of handsets on subsidised plans and higher subsidies offered as part of our aggressive marketing campaign for Next G™ mobile. This was offset by decreased network payments largely as a result of the reduced mobile terminating access rate;
· an increase in other expenses of 15.3% or \$307 million, largely due to higher service contracts and other agreements as a result of costs associated with transformation initiatives:
· a decrease in labour expense of 2.8% or \$57 million, due to lower staff levels, a reduction in redundancy costs and lower overtime payments. This was partially offset by higher contractor and agency payments; and
· higher depreciation and amortisation expense of 9.9% or \$178 million, primarily due to accelerated depreciation and amortisation associated with our transformation strategy and planned closure of the CDMA network, upgrade of switching systems and software, and growth in communications plant.
3 Income tax expense decreased by 21.7% or \$196 million to \$706 million, giving an effective tax rate of 29.2%. The lower income tax expense was primarily due to the reduction in profit before income tax.
4 Interim dividend of 14 cents per ordinary share declared by the directors of Telstra Corporation Limited, fully franked. The record date for the interim dividend is 2 March 2007 with payment to be made on 30 March 2007. Shares and instalment receipts will trade excluding entitlement to the dividends on 26 February 2007.

	As at
	31 Dec.2006 - 30 Junie 2006	charige 96.
457	.689	(33.7)
4,570	4,241	7.8
5,027	4,930	2.0
23,413	23,503	(0.4)
$-6,265$	6,122	2.3
1,847	1,636	12.9
31,525	31,261	0.8

36,552	36,191	1,0
3.033	1,982	53.0
5,108	5,908	(13.5)
11,280	11,434	(1.3)
.4,015	4.044	(0.7)
23,436	23,368	0.3
	'Sm	∴. ≴≀n

5 Total current assets increased by \$97 million to \$5,027 million due to:

· an increase in other current assets of \$329 million predominantly due to higher trade receivables impacted by the timing of cash receipts. In addition, inventory of mobile handsets increased due to aggressive marketing for Next G™ mobile driving higher inventory orders; offset by
· a decrease in cash assets of \$232 million as our cash balances and net cash flow generated from operations was used to fund our investing and financing activities.
6 Total non current assets increased by \$264 million to \$31,525 million due to:
· an increase in other non current assets of \$211 million largely due to the actuarial gain on our defined benefit assets;
· a increase in intangibles of \$143 million largely due to the acquisition of SouFun Holdings Ltd and additions in our software assets offset by amortisation expense: and
· a decrease in property, plant and equipment of \$90 million as depreciation more than offset the additions in our communications plant.
7 Total liabilities increased by \$68 million to \$23,436 million due to:
· higher total borrowings of \$897 million, mainly due to an increase in borrowings primarily to fund capital expenditure and dividend payments; offset bu
· a decrease in total other liabilities of \$829 million, predominantly due to lower trade and other payables as a result of payments made during the half-year for capital expenditure as part of our transformation project. In addition, the timing of cash payments contributed to the decrease in total other liabilities.
8 Equity increased by \$293 million to \$13,116 million. This increase was largely due to the inclusion of our net profit for the period, actuarial gain on our defined benefit assets, partially offset by the payment of the fiscal 2006 final ordinary dividend.

		6 months to 6 months to
Selected Items from the	Dec 2006	$\sim$ $\sim$ Dec 2005
STATEMENT OF CASH FLOWS	$\ldots$ Sm $\ldots$	∵ ≸ภา
Net cash provided by operating activities	3,431	3,948	(13,1)
Net cash used in investing activities		$(2,569)$ $(1,992)$	$-29.0$
Free cash flow $9^{\circ}$	862	1.956	(55.9)
Net cash used in financing activities ¹⁰ .	(1,089)	(2,721)	(60.0)
Net decrease in cash	$^{+}(227)$	(765)	(70.3)

9 Free cash flow decreased by \$1,094 million to \$862 million mainly due to a reduction in net cash provided by operating activities as a result of lower operating profit, and also increased cash used by investing activities mainly attributable to our payments for property, plant and equipment, and the payment for SouFun Holdings Ltd, partially offset by the proceeds received from the sale of Australian Administration Services Group.
$\scriptstyle\rm 30$ Net cash used in financing activities decreased by \$1,632 million to \$1,089 $\scriptstyle\rm 10$ million, mainly due to the reduced payment of dividends and an increase inborrowings

MediaComms evolution

As the line between telecommunications and media companies starts to blur, Telstra has already started to evolve into a media communications company through its small, but growing portfolio of new media assets in Sensis and BigPond®.

Sensis' digital online platform revenues increased 68% in the first half driven by Sensis' new media businesses, including Soufun, Yellow.com.au, WhitePages.com.au, TradingPost. com.au, whereis.com.au, GoStay.com.au and Citysearch.com.au.

Sensis is now much more than just Yellow™. Australians are turning to Sensis to find, buy and sell. In fact, more than 4.5 million Australians turn to Sensis each day to search Sensis' portfolio of around 400 products. Australians use Sensis online products almost 42 million times per month (up 20% on 2005) through Sensis' ten websites and seven mobile information services.

BigPond's customers can benefit from the recent increases in both fixed-line and wireless broadband speeds. The increased speeds will make it easier for customers to enjoy BigPond's content including the exclusive rights to AFL, V8 Supercars, NRL and a range of music, games, video and movie download services.

The future is media communications.

Telstra continues to seek regulatory certainty

Following recent decisions by the Australian Competition and Consumer Commission (ACCC) on Unconditioned Local Loop (ULL) and Line Sharing Services (LSS) prices, Telstra has launched High Court proceedings challenging the constitutional validity of the Telecommunications specific access regime under clause 51 (xxxi) of the Australian Constitution, which guarantees compensation on just terms when property is compulsorily acquired. This High Court challenge applies to both ULL and LSS.

The last mile of copper between the exchange and the consumer can be used by our competitors to offer voice and/or data services using either ULL or LSS services. In the case of ULL, competitors can offer their customers both voice and data. In the case of LSS, competitors only offer their customers data services (ie broadband).

Unconditioned Local Loop (ULL)

The ACCC rejected our de-averaged monthly price undertaking in December 2005. We subsequently resubmitted a new \$30 per month national average undertaking in December 2005. This was rejected in August 2006 by the ACCC, who issued a draft determination of \$17.70 in Band 2 (metropolitan capital cities) - well below our average cost of \$30.

Financial Calendar

	2007	2008 (indicative)
Half year results announcements.	15 Feb	14 Feb
Ex-dividend share trading commences	26 Feb	25 Feb
Record date for interim dividend	2 Mar	29 Feb
Interim dividend paid	30 Mar	28 Mar
Annual results announcement.	9 Aug	14 Auc
Ex-dividend share trading commences	20 Aug	25 Aug
Record date for final dividend	24 Aug	29 Auc
Final dividend paid	21 Sep	26 Sep
Annual General Meeting	7 Nov	TBA

Note - Taning of events may be subject to change. Any changes will be notified to the Australian Stock Exchange (ASX).

* Registered trade mark of Telstra Corporation Limited

¹⁶ Trade mark of Telstra Corporation Limited

Status of ACT appeal - We have appealed to the Australian Competition Tribunal (ACT), following the release of the ACCC draft determination. A final decision is not expected until early 2007. Separately, the ACCC is still to issue a final determination on ULL.

Line Sharing Services (LSS)

The ACCC rejected Telstra's ESS monthly undertaking of \$9 in December 2005, and we lost our appeal to the ACT. In October 2006, the ACCC issued on interim draft decision reducing the price to \$3.20 per month. The ACCC has ignored evidence that Telstra's cost of delivering these services has increased - as shown by increasing costs for fuel, copper, labour and vehicles. This decision allows our competitors to buy broadband below cost – for just \$3.20 per month, and then re-sell it for up. to ten times that amount.

Status of High Court action - In January 2007 we lodged a constitutional challenge in the High Court relating to both ULL and LSS pricing.

Mini glossary

3GSM 850 Third Generation mobile technology operating on 850Mhz spectrum.

ADSL Asymmetric Digital Subscriber Line - is a broadband technology that provides access to the Internet at fast speeds.

FTTN Fibre to the node - infrastructure that delivers fibre close to the customer premises. FTTN can deliver broadband data and potentially television services to customer premises.

IP Internet Protocol -- is a standard set of rules for the carriage of digital information such as voice, video, data and images, across a global network.

IP core The core element of a network which carries and logically splits voice, data and video using IP technology.

Next G^** network Telstra's trade mark name for its 3GSM 850 mobile network.

PSTN Public Switched Telephone Network - standard home telephone service, delivered over underground copper wires.

ULL Unconditioned Local Loop -- The Local Loop is the copper wire that connects the Telstra exchange in your area to your house. Telstra is required to provide access to this wire to other operators.

GOLLAIRE COMMUNIST

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Franklik (* 1927)
Melbourge Wessels (* 1918)
Melbourge Wessels (* 1918) Douglas Gration

Company Secretary

email companysecretary@team telstickens

General Enquiries - Registered Office

Australia 1300-363-357

All Other +63(5)-850-8-1721

Singhing theory -

Sharphote - 11911
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Telstra Corporation Limited
Shcorporated in the Asstration Capital Territory
ASM 25 Med on Stock Exchanges in Australia

Investor Relations
Level 36, 242 Exhibition Street (1990) (1990)

Alexander (media este este alexander a po

Ph. (613) 9634 8014
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PO Box As42
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INSTEAD OF ENCOURAGING BROADBAND INVESTMENT GOVERNMENT IS STIFLING IT.

The world is changing because of broadband internet. And Australia must do whatever it takes to keep up.

If government and regulators don't allow the next wave of internet investment, Australia will be left behind.... as our global competitors work even smarter and faster.

Instead of subsidising foreign telcos at Telstra's expense, government and requlators should give Telstra a fair go so it can invest in the broadband infrastructure needed to provide high-level services.

The Telstra ruckus is about a blind belief that competition automatically delivers what the nation really needs. Until that fiction is acknowledged we risk continuing to go round in circles. and missing the boat on needed broadband investment.

Source: Mark Christensen, leading economic adviser and academic, December 2006.

THE BENEFITS OF HIGH-SPEED BROADBAND:

Economy an independent report to government has estimated high-speed broadband will bring economic benefits of \$12b to \$30b* per year.
Small business lower costs, fast 24 hour access to customers and suppliers worldwide.
Regional eliminates the tyranny of distance, putting the bush on an equal footing.
E-learning interactive remote education, online testing, sophisticated learning tools.
Telehealth remote diagnosis and treatment. *Source: The Broadband Advisory Group's Report to Government, 2003.

Like leeches, foreign companies are encouraged by lopsided regulations to act like parasites on Telstra's infrastructure, milking the investments of Telstra's 1.6 million shareholders.

The SOLUTION?

We must put pressure on government and regulators to create a level playing field for all.

We must ALL tell them to get rid of the regulations that only apply to Telstra and stifle investment in broadband infrastructure.

So GET ACTIVE.

Rather than being on the superhighway most of us are limping along a two-lane road and the rest, mainly but not all in the country, are still on a dirt track - let Telstra go and do what it wants. At the very worst we will end up with a world class piece of broadband infrastructure.

Source: Tim Hughes, investment analyst, The Courier Mail, August 2006.

TELSTRA'S BROADBAND AUSTRALIA CAMPAIGN (BACK TELSTRA) IS A GRASSROOTS EFFORT

Australia's competitiveness depends on Telstra's shareholders, staff, customers and everyone who supports faster broadband having their say.

Send a clear message to government and regulators that backward looking regulation should not get in the way of high-speed broadband and a stronger economy.

YOU CAN...

Help by doing any of the following:

1. Register as a Telstra Active Supporter at www.nowwearetalking.com.au
1. Talk to family, friends and colleagues
1. Contact your local Federal MP
1. Contact the ACCC
1. Organise a community meeting
1. Set up a local supporters group
1. Write letters to the editor of newspapers
Ring talkback radio 8.
1. Involve influential community members
1. Visit nowwearetalking.com.au

Authorised by L. McGregor, 242 Exhibition St, Melbourne, Victoria 3000.

AI assistant

TELSTRA GROUP LIMITED Interim / Quarterly Report 2007

65927_rns_2007-02-14_bf6a9a51-af6f-4707-b174-fadbeaf8ec24.pdf

CEO letter to shareholders, half-year review and BACK Telstra brochure