TELSTRA GROUP LIMITED - Interim / Quarterly Report 2018

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15 February 2018

The Manager

Market Announcements Office Australian Securities Exchange 4[th ] Floor, 20 Bridge Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

General Enquiries 03 8647 4838 Facsimile 03 8600 9800

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra Corporation Limited - Financial results for the half-year ended 31 December 2017 – CEO/CFO Analyst Briefing Presentation and Materials

In accordance with the Listing Rules, I enclose for immediate release to the market:

a) a presentation;
b) CEO and CFO speeches;
c) Telstra’s Half-Year Results and Operations Review; and
d) financial and statistical tables.

Telstra will conduct an analyst briefing on the half-year results from 9.15am AEDT and a media briefing from 11.00am AEDT. The briefings will be broadcast live by webcast at https://www.telstra.com.au/aboutus/investors/financial-information/financial-results.

A transcript of the analyst briefing will be lodged with the ASX when available.

This announcement has been released simultaneously to the New Zealand Stock Exchange.

Yours faithfully

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Sue Laver Company Secretary

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

Half year Half year 2018 results 2018 results

Half year 2018 results

Andrew Penn Andrew Penn Chief Executive Officer Chief Executive Officer

Andrew Penn Chief Executive Officer

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Disclaimer

These presentations include certain forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Telstra, which may cause actual results to differ materially from those expressed in the statements contained in these presentations. For example, the factors that are likely to affect the results of Telstra include general economic conditions in Australia; exchange rates; competition in the markets in which Telstra will operate; the inherent regulatory risks in the businesses of Telstra; the substantial technological changes taking place in the telecommunications industry; and the continuing growth in the data, internet, mobile and other telecommunications markets where Telstra will operate. A number of these factors are described in “Our material risks” section of our Operating and Financial Review (OFR) which is set out in Telstra’s financial results for the year ended 30 June 2017 which was lodged with the ASX on 17 August 2017 and available on Telstra’s Investor Centre website www.telstra.com/investor.

These presentations are not intended to (nor do they) constitute an offer or invitation by or on behalf of Telstra, its subsidiaries, or any other person to subscribe for, purchase or otherwise deal in any debt instrument or other securities, nor are they intended to be used for the purpose of or in connection with offers or invitations to subscribe for, purchase or otherwise deal in any debt instruments or other securities.

All forward-looking figures in this presentation are unaudited and based on A-IFRS. Certain figures may be subject to rounding differences.

All market share information in this presentation is based on management estimates based on internally available information unless otherwise indicated. All amounts are in Australian Dollars unless otherwise stated.

nbn™, nbn co and other nbn™ logos and brands are trademarks of nbn co limited and used under licence.

The Spectrum device, and ™ are trademarks of Telstra Corporation Limited and ® Registered trademark of Telstra Corporation Limited. Other trademarks are the property of their respective owners.

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Half year 2018 results | Headlines

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Reported Guidance basis [1]
Total income [2] Total income [2]
$14.5 billion, +5.9% $14.4 billion, +5.4%
Reported Guidance basis [1]
EBITDA EBITDA
$5.1 billion, -2.5% $5.3 billion, +2.4%
Reported ex-impairment EPS: 14.3 cents,
NPAT NPAT ex-impairment 16.6 cents
$1.7 billion, -5.8% $2.0 billion, +9.5% Total interim dividend: 11 cps [3]
FY18 guidance reaffirmed
1. This guidance assumes wholesale product price stability and no impairments to investments, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase
of spectrum. The guidance also assumes the nbn™ rollout is broadly in accordance with the nbn Corporate Plan 2018 adjusted for a cease sale on hybrid fibre co-axial (HFC) technology for
six to nine months from 11 December 2017. Capex excludes externally funded capex.
2. Total income excludes finance income.
3. Total interim dividend of 11 cents per share, comprising an interim ordinary dividend of 7.5 cents per share and an interim special dividend of 3.5 cents per share
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Our purpose, vision and strategy

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Purpose To create a brilliant connected future for everyone
Vision To be a world class technology company that empowers people to connect
Brand To create better ways to empower everyone to thrive in a connected world
Deliver brilliant customer experiences Drive value and growth from the core Build new growth businesses close to the core
Strategic pillars
Networks for the future Deliver a seamless end to end usage experience across our networks and build the network 2020 architecture
Strategic investment of
Strategic enablers Digitisation Digitise our systems and processes to enable brilliant customer experiences and simplify our ways of working up to $3 billion from
FY17 – FY19
Culture & capabilities Build and enhance priority capabilities and drive critical cultural shifts (simplicity and accountability)
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Half year 2018 results | Deliver a brilliant customer experience

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Better value bundles - Eliminating bill shock - Order Estimator providing an
unlimited data + Telstra TV + estimate of the first bill, ~110,000 order estimates issued
Foxtel Now per month
Always connected – Smart modem
Get Help! call centre solution - reduced call
providing continuous connection
times for nbn customers by >6 minutes and we
despite faults and interruptions. ~85k
escalate 60% fewer issues to field technicians
smart modem customers to date
Better nbn speeds - leading the industry with minimum 80%
nbn speeds during peak hours
NPS: nbn migration impacting customers over last 6 months
• Strategic NPS flat vs Dec -16 (-6 pts over last 6 months)
• Episode NPS +4 points vs Dec -16 (+1 pt over last 6 months)
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Half year 2018 results | Drive value and growth from the core

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Strong mobile net adds - 235,000 retail Successful execution of multi-brand strategy
mobile customers including 130,000 post- 21,000 Belong mobile; +118,000 wholesale mobile
paid handheld; churn 10.9% customers added
Mobile service revenue -1.2% with post-paid New nbn connections +454,000 (market share
handheld ARPU -2.9% 51%, ex- satellite); retail bundle adds +57,000
Fixed EBITDA (ex nbn C2C [1] ) -29% negatively impacted by growing nbn –
Strong momentum in productivity program
network payments and loss of wholesale margins. nbn impact in period
underlying core fixed costs declined 7.2%
$370m; $870m life to date
Media strategy delivering differentiation to >90% of the Australian Mobile network recognition: Ookla
core products including >1m Telstra TVs, population have access to Speed Report, P3 survey (lead in
>1.5m AFL, NRL, Netball Telstra Live Sports double the mobile speeds of mobile data category), Systemics
Pass users our original 4G through 4GX Group (best mobile operator)
1. Cost to connect
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Half year 2018 results | Build new growth businesses close to the core

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Investment in two subsea
NAS revenue growth +14.1%. NAS Enhanced cyber security
cables from Hong Kong to the
EBITDA margins down 2pp. Mid-teens offerings including opening
US and Perth to Singapore and
NAS margins expected at maturity new security operations centres
Jakarta
Global connectivity revenue +6.7% (LC)
Acquisitions
- NAS and fixed product growth. EBITDA
of MTData and
-17% due to one-off costs, revenue mix
VMtech
and yield pressure
Ooyala – plan to drive business
Strong growth in Internet of Things Smart Cities solutions –
synergies between Telstra
(IoT) business – almost $200m in contracts with City of
Broadcast Services (TBS) and
revenue Launceston and City of Casey
Ooyala
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Progress on strategic investment program

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Our vision is to become a world class technology company that empowers people to connect
This is about recognising what a telco will look like in the future
It is about building critical capability for the future
as technology innovation changes our industry
~$1.4b of additional capex invested across 18 months to 1H18 (~50% through program) to deliver
strategic benefits of >$500m EBITDA, but more to do on 3-6 point NPS improvement target
Productivity to reset the cost base while driving improved customer outcomes: Delivered cumulative
productivity of $493m out of total $1.5b commitment
We continue to focus on 5 key themes:
Networks for the future Digitisation Customer Experience Productivity Culture & Capability
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Key foundational investments – digitisation: ~$0.1b invested to date
Building people capability for the future • 100 data scientists and 30- 40% of IT projects now being delivered through agile methodology
• Launched artificial intelligence based virtual assistant ‘Codi’
Improvements in digital • “Online Order Status Tracker” for nbn customers
self service channels • 13% reduction in call volumes; 24% increase in number of active 24x7 app users
• “Telstra Connect” app and Expert Finder for our Enterprise customers
Shifting to a new IP • Launched Liberate, our new digitally enabled unified communications suite merging fixed and mobile
enabled digital enterprise • Telstra Programmable Network expanded (+150 customers signed up in 1H18)
product set
Shifting to cloud based • Transferring all CRM to 1 Salesforce platform system delivering better outcomes for customers and
core systems enabling us to shut down 5 legacy systems
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Key foundational investments – networks: ~$1.3b invested to date
• Activated >400 small cells with a further 850 planned
• 300th mobile base station launched under Federal Government’s Mobile Black Spot Program
Supporting mobile • Launched 5G innovation centre on the Gold Coast
differentiation, coverage, • World first 5G data call on 26Ghz spectrum
speed and resiliency • Breaking through 1Gbps on 4G, gearing up for new speed milestones in the lead up to 5G
• Enhanced future spectrum holdings with purchase in 1H18 multiband auction
Building platforms we need • Delivered Internet of Things (IoT) capability on our mobile network with Cat M1 and
for the future including IoT,
Narrowband IoT
SDN and NFV
Upgraded core backbone
infrastructure to enable • Next generation optical transport network deployed on routes between five capital cities
support of 5x capacity and
improved resilience
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Summary

Our 1H18 results are in line with guidance with strong performance in mobile net adds, churn and nbn We have made good progress on our productivity program nbn impact and increased competition highlights importance of strategic investment program We have implemented significant foundational investments in networks and digitisation We are increasing our focus on reducing costs, accelerating our strategic investment program and relentlessly pursuing future growth

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Half year
Half year
Half year 2018 results
2018 results
2018 results
Warwick Bray
Andrew Penn Chief Financial Officer
Andrew Penn
Chief Executive Officer
Chief Executive Officer
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Agenda

Group results 2. Product performance 3. Capital position 4. Guidance

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Group results – Income Statement

Income Statement 1H17	Income Statement 1H17	1H18	GROWTH (reported basis)	GROWTH (guidance basis1)
Sales revenue2	$12.8b	$12.8b	-0.2%
Total income2	$13.7b	$14.5b	5.9%	5.4%
Operating expenses	$8.5b	$9.4b	10.6%	7.4%
EBITDA	$5.2b	$5.1b	-2.5%	2.4%
Depreciation and amortisation	$2.2b	$2.2b	-1.3%
EBIT	$2.9b	$2.8b	-3.4%
Net finance costs	$0.3b	$0.3b	-3.2%
Income tax expense	$0.9b	$0.9b	1.5%
NPAT	$1.8b	$1.7b	-5.8%
Basic earnings per share (cents)	14.8	14.3	-3.4%
NPAT excluding impairment	$1.8b	$2.0b	9.5%
Basic earnings per share (cents) ex impairment	14.8	16.6	12.2%

This guidance assumes wholesale product price stability and no impairments to investments, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumes the nbn™ rollout is broadly in accordance with the nbn Corporate Plan 2018 adjusted for a cease sale on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017. Capex excludes externally funded capex.
Sales revenue excludes other revenue. Total income excludes finance income.

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Group results – total interim dividend

1H18 total interim dividend of 11 cents per share, fully franked Interim ordinary dividend of 7.5 cents per share, fully franked 71% payout ratio on underlying earnings excluding impairment[1] 90% payout ratio on underlying earnings including impairment[1] Interim special dividend 3.5 cents per share, fully franked 58% payout ratio on net one-off nbn receipts[2]

FY18 total dividend expected to be 22 cents per share, fully franked, including ordinary and special, in accordance with our dividend policy announced August 2017[3]

Underlying earnings is defined as NPAT from continuing operations excluding net one-off nbn receipts (as defined in footnote 2).
“Net one-off nbn receipts” is defined as net nbn one off Definitive Agreement receipts (consisting of PSAA, Infrastructure Ownership and Retraining) less nbn net cost to connect less tax.
Return subject to no unexpected material events, assumes nbn™ rollout is broadly in accordance with the nbn Corporate Plan 2018 adjusted for a cease sale on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017 and receipt of associated one-offs, and is subject to Board discretion having regard to financial and market conditions, business needs and maintenance of financial strength and flexibility consistent with Telstra’s capital management framework.

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Group results – Free cashflow Free cashflow 1H17 1H18 GROWTH EBITDA – reported basis $5.2b $5.1b -$0.1b Working capital movement1 -$1.0b -$0.4b $0.6b Tax paid -$0.9b -$0.8b $0.1b Capex (excluding spectrum) -$2.2b -$2.5b -$0.4b Net investments2 -$0.1b - - Other including non-cash EBITDA items3 $0.3b $0.5b $0.2b Free cashflow – reported basis $1.4b $1.7b $0.3b Guidance adjustments4 $0.2b - -$0.2b Free cashflow – guidance basis $1.6b $1.8b $0.1b	Group results – Free cashflow Free cashflow 1H17 1H18 GROWTH EBITDA – reported basis $5.2b $5.1b -$0.1b Working capital movement1 -$1.0b -$0.4b $0.6b Tax paid -$0.9b -$0.8b $0.1b Capex (excluding spectrum) -$2.2b -$2.5b -$0.4b Net investments2 -$0.1b - - Other including non-cash EBITDA items3 $0.3b $0.5b $0.2b Free cashflow – reported basis $1.4b $1.7b $0.3b Guidance adjustments4 $0.2b - -$0.2b Free cashflow – guidance basis $1.6b $1.8b $0.1b	Group results – Free cashflow Free cashflow 1H17 1H18 GROWTH EBITDA – reported basis $5.2b $5.1b -$0.1b Working capital movement1 -$1.0b -$0.4b $0.6b Tax paid -$0.9b -$0.8b $0.1b Capex (excluding spectrum) -$2.2b -$2.5b -$0.4b Net investments2 -$0.1b - - Other including non-cash EBITDA items3 $0.3b $0.5b $0.2b Free cashflow – reported basis $1.4b $1.7b $0.3b Guidance adjustments4 $0.2b - -$0.2b Free cashflow – guidance basis $1.6b $1.8b $0.1b	Group results – Free cashflow Free cashflow 1H17 1H18 GROWTH EBITDA – reported basis $5.2b $5.1b -$0.1b Working capital movement1 -$1.0b -$0.4b $0.6b Tax paid -$0.9b -$0.8b $0.1b Capex (excluding spectrum) -$2.2b -$2.5b -$0.4b Net investments2 -$0.1b - - Other including non-cash EBITDA items3 $0.3b $0.5b $0.2b Free cashflow – reported basis $1.4b $1.7b $0.3b Guidance adjustments4 $0.2b - -$0.2b Free cashflow – guidance basis $1.6b $1.8b $0.1b
		1H18	GROWTH	1H18 EBITDA on a reported basis impacted by $273m non-cash Ooyala impairment. Impact eliminated in non-cash EBITDA items
EBITDA – reported basis	$5.2b	$5.1b	-$0.1b
Working capital movement1	-$1.0b	-$0.4b	$0.6b	Working capital movement improved across payables and inventories. Benefit from mobile leasing through Go Mobile Swap plans
Tax paid	-$0.9b	-$0.8b	$0.1b
Capex (excluding spectrum)	-$2.2b	-$2.5b	-$0.4b
				Capex includes strategic investment. 1H18 capex $2,299m on accrued guidance basis or 18% capex to sales
Net investments2	-$0.1b	-	-
Other including non-cash EBITDA items3	$0.3b	$0.5b	$0.2b
Free cashflow – reported basis	$1.4b	$1.7b	$0.3b	Restructuring costs excluded from FY17 free cashflow on a guidance basis
Guidance adjustments4	$0.2b	-	-$0.2b

Free cashflow – guidance basis	$1.6b	$1.8b	$0.1b

Working capital movement from operating activities.

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Net investments including payments and proceeds from sale. Excluding proceeds from sale of Property, Plant and Equipment (PP&E).
Other including interest received, non-cash EBITDA items (including impairments and gain on disposal of PP&E) and proceeds from sale of PP&E.
Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation.

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Income growth by product

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Growth underlying income $126m or 1.0% [1]
+$612m $14,441m +$69m $14,510m
+5.4% +5.9%
+$165m -$276m -$76m +$84m +$207m +$30m +$11m -$19m Guidance Reported
$13,703m basis basis
3.3% -8.4% -5.5% +39.6% +14.1% +4.2% +1.4% -20.2% +85.1%
1H17 Mobile [2] Fixed [3] Data & Recurring NAS Global Other core [4] New One-off nbn 1H18 Guidance 1H18
Reported IP nbn DA connectivity businesses [5] DA and Guidance adjustments [6] Reported
basis connection basis basis
1. Refer to supporting material slide “Product framework income” for 1H17 and 1H18 detailed income performance.
2. Mobile includes non sales revenue Go Mobile Swap lease income 1H18 $126m (1H17 nil).
3. Fixed excludes one-off nbn connection revenue 1H18 $37m (1H17 $33m) and includes TUSOPA income FY17 1H18 $77m (1H17 $80m). nbn connection revenue included in one-off nbn DA and connection.
4. Other core includes media, nbn commercial works (sale of assets) and other miscellaneous income.
5. New businesses includes Telstra Health, Ooyala and Telstra Ventures.
6. Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include M&A and Foxtel.
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Operating expenses

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Decline core fixed costs
~$0.5b reduction delivered cumulatively
Ahead of run rate required for $1.5b productivity
+$284m -$249m +$279m $9,418m
+$97m -$15m $9,139m
+$510m
Supporting
$207m of +7.4% +10.6%
$8,512m increased NAS Guidance Reported
revenue and basis basis
Including $248mincrease nbnaccess $126m Go Mobile Swap lease income -7.2%
payments and
increased
mobile hardware
sales
1H17 Core sales One-off Core fixed Core fixed New 1H18 Guidance 1H18
Reportedbasis [1] costs [2] and nbnnbn DA costs – NAS labour and underlyingcosts – businesses [4] Guidancebasis adjustments [5] Reportedbasis
C2C corporate [3]
1. Refer to supporting material slide “Product framework operating expenses” for 1H17 and 1H18 detailed operating expense performance.
2. Core sales costs excludes goods and services purchased associated with new businesses and nbn cost to connect (C2C).
3. NAS labour and corporate costs include significant transactions and events associated with NAS commercial works and labour, global connectivity costs including FX, Go Mobile Swap lease costs and bond rate impacts. 1H17
restated to include $165m (1H18 $134m) additional restructuring costs represented as a guidance adjustment in prior year.
4. New businesses includes Telstra Health, Ooyala and Telstra Ventures.
5. Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include Ooyala impairment.
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EBITDA

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Decline underlying EBITDA $389m or 8.3% due to
nbn recurring impact
+$515m $5,315m -$254m
$5,061m
+2.4%
$5,189m ~-$370m Guidance basis -2.5%
Reported
~-$15m -$4m basis
1H17 nbn Recurring New Net one-off 1H18 Guidance 1H18
Reportedbasis recurring impact [1] core ex-nbn [2] businesses [3] less nbnnbn DA Guidancebasis adjustments [4] Reportedbasis
net C2C
1. nbn recurring impact identified across fixed products and recurring nbn DA income. Other recurring nbn impacts not identified across remaining core (including data & IP).
2. Recurring core includes mobile, data & IP, NAS, global connectivity and other core (including media, nbn commercial works (sale of assets) and other miscellaneous income).
3. New businesses includes Telstra Health, Ooyala and Telstra Ventures.
4. Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include Ooyala impairment.
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Product EBITDA performance EBITDA 1H17 1H18 GROWTH $ GROWTH %	Product EBITDA performance EBITDA 1H17 1H18 GROWTH $ GROWTH %	Product EBITDA performance EBITDA 1H17 1H18 GROWTH $ GROWTH %	Product EBITDA performance EBITDA 1H17 1H18 GROWTH $ GROWTH %	Product EBITDA performance EBITDA 1H17 1H18 GROWTH $ GROWTH %
		1H18	GROWTH $	GROWTH %
Mobile	$2,065m	$2,052m	-$13m	-0.6%
Fixed excl. nbn C2C1,2	$1,561m	$1,114m	-$447m	-28.6%
Recurringnbn DA	$192m	$273m	$81m	42.2%
Data & IP	$817m	$770m	-$47m	-5.8%
NAS3	$112m	$101m	-$11m	-9.8%
Global connectivity3	$130m	$108m	-$22m	-16.9%
Other core4	-$120m	-$46m	$74m	61.7%
Recurring core	$4,757m	$4,372m	-$385m	-8.1%
New businesses3,5	-$75m	-$79m	-$4m	-5.3%
Underlying	$4,682m	$4,293m	-$389m	-8.3%
Net one-off nbn DA less nbn net C2C2	$507m	$1,022m	$515m	101.6%
Guidance basis	$5,189m	$5,315m	$126m	2.4%
Guidance adjustments6	-	-$254m	-$254m	n/m
Reported basis	$5,189m	$5,061m	-$128m	-2.5%

Fixed excludes one-off nbn connection revenue 1H18 $37m (1H17 $33m) and includes TUSOPA income 1H18 $77m (1H17 $80m).
Fixed excludes nbn cost to connect (C2C) 1H18 $271m (1H17 $180m). nbn C2C net of one-off connection revenue represented against “Net one-off nbn DA less nbn net C2C”.
1H17 restated for telkomtelstra revenue previously NAS now included in global connectivity. Global connectivity EBITDA restated to include telkomtelstra and international product costs previously new businesses.

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Other core includes media, nbn commercial works (sale of assets) and other miscellaneous income. 1H17 restated to include $165m (1H18 $134m) additional restructuring costs represented as a guidance adjustment in prior year.
New businesses includes Telstra Health, Ooyala and Telstra Ventures.
Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include Ooyala impairment.

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Product performance: Mobile

Product performance: Mobile	Product performance: Mobile	Product performance: Mobile	Product performance: Mobile	Product performance: Mobile	Product performance: Mobile	Product performance: Mobile
Mobile 1H17		2H17	1H18	GROWTH on PCP and 2H17		Page 21 1H18 mobile revenue increased 0.8%on PCP mostly including SIO net add momentum and hardware growth Retail mobile net adds of 235,000, including 130,000 postpaid handheld. Improved 2Q18 momentum including from iPhone X. Belong mobile net adds of 21,000 Wholesale mobile net adds of 118,000 Postpaid handheld ARPU decline 2.9%due to increased competition and one-off impacts. Continued growth in MMC offset by lower out of bundle revenue Prepaid handheld revenuedecline with reduced unique users Mobile broadbandrate of decline improving Sports Live Pass users increasedover threefold to 1,586,000 across AFL, NRL and Netball. Almost all users receive the service as part of their mobile subscription EBITDA margin declineddue to postpaid handheld ARPU reduction and some one-offs
Revenue1	$5,043m	$5,059m	$5,082m	0.8%	0.5%
Mobile services	$3,971m	$3,987m	$3,922m	-1.2%	-1.6%
- Postpaid handheld	$2,712m	$2,736m	$2,682m	-1.1%	-2.0%
- Prepaid handheld	$502m	$511m	$493m	-1.8%	-3.5%
- Mobile broadband	$514m	$478m	$470m	-8.6%	-1.7%
- Machine to Machine	$68m	$78m	$73m	7.4%	-6.4%
- Other2	$175m	$184m	$204m	16.6%	10.9%
Hardware	$1,072m	$1,072m	$1,160m	8.2%	8.2%
EBITDA Margin	$2,065m 41%	$2,254m 45%	$2,052m 40%	-$13m -1pp	-$202m -5pp
Customers – retail	17.4m	17.4m	17.6m	1.1%	1.4%
Postpaid handheld ARPU ex. MRO	$67.88	$67.54	$65.92	-2.9%	-2.4%
Postpaid handheld ARPU inc. MRO	$60.80	$60.62	$58.60	-3.6%	-3.3%
Postpaid handheld churn	11.9%	10.6%	10.9%	-1.0pp	+0.3pp
1. Mobile revenue excludes non sales revenue Go Mobile Swap lease income 1H18 $126m (1H17 nil). Mobile EBITDA in 2. Other includes wholesale resale, satellite and interconnection.

Product performance: Fixed

Fixed 1H17	Fixed 1H17	1H18	Fixed performanceimpacted by increased rate of nbn migration and competition
Revenue1	$3,255m	$2,986m	Retail bundleadds of 57,000 including from recent ‘Unlimited Data Bundles’. 90% of retail fixed data customers on bundled plans
Fixed voice	$1,604m	$1,401m
Fixed data	$1,276m	$1,257m	Telstra TVdevices in market 1,092,000. TTV2 launch on 31 October 2017
Other fixed2	$375m	$328m
			Retail fixed data revenue growthwith 21,000 retail net adds including Belong. Retail data revenue growth offset by lower wholesale fixed data revenue due to nbn migration
EBITDA – fixed voice Margin	$809m 50%	$529m 38%
EBITDA – fixed data Margin	$439m 34%	$216m 17%
			Fixed voice revenuedecline with lower SIOs. Continued focus on retention and benefits from bundling
Net nbn cost to connect (C2C)	$147m	$234m
nbn network payments	$179m	$427m
			nbn connectionsgrew by 454,000 to 1,630,000 and 51% market share (ex- satellite)
Fixed voice customers – retail	5.5m	5.1m
Fixed data customers – retail	3.5m	3.5m
			Fixed margin declineincluding upfront costs in connecting our nbn customers and growing network payments to nbn co
Fixed bundle customers – retail	2.8m	3.0m

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Fixed revenue includes one-off nbn connection revenue 1H18 $37m (1H17 $33m) and excludes non sales revenue income from TUSOPA 1H18 $77m (1H17 $80m). TUSOPA income included across fixed voice and other fixed EBITDA. 2. Other fixed revenue includes intercarrier services, platinum services, payphones and customer premises equipment.

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Product performance: Data & IP

Data & IP	1H17	1H18	GROWTH	Data & IP revenue down 5.5%reflecting IP customer growth in IP VPN/MAN, offset by
Revenue	$1,376m	$1,300m	-5.5%	legacy product declines across ISDN, IP WAN and calling products
IP access	$577m	$568m	-1.6%	IP access revenue declineincludes
ISDN	$279m	$243m	-12.9%	customer growth in IP VPN/MAN, offset by competitive yield pressures and legacy
Other data & calling products	$520m	$489m	-6.0%	product declines
EBITDA	$817m	$770m	-$47m	IP MAN revenue up 5.2%due to continuing
Margin	59%	59%	-	demand for IP value added services and bandwidth upgrades
IP MAN SIOs	44k	49k	11.4%
				ISDN declinedue to legacy migration to
IP WAN SIOs	111k	103k	-7.2%	growth IP products and NAS collaboration
				and calling solutions
				EBITDA margin maintained.EBITDA dollars
				reduced due to legacy migration to growth IP
				products

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Product performance: NAS

NAS	1H17	1H18	GROWTH	NAS continued double digit revenue growth across Business and Enterprise customer
Revenue1	$1,470m	$1,677m	14.1%	segments
Managed network services	$285m	$307m	7.7%	Managed network services growthreflects annuity growth in security services and other
Unified communications Cloud services	$392m $157m	$409m $180m	4.3% 14.6%	one-off revenue in managed data networks Unified communications annuity growthin collaboration and calling solutions as well as
Industry solutions (incl. nbn commercial works)	$562m	$687m	22.2%	growth in professional services from timing of milestones
Integrated services1	$74m	$94m	27.0%	Cloudincluding annuity growth in public cloud. Further growth in consulting services
EBITDA1	$112m	$101m	-$11m	and cloud applications
Margin	8%	6%	-2pp
				Industry solutionsgrowth due to increase in
NAS revenue by segment2				nbn network and other commercial works
Telstra Consumer & Small Business	$112m	$127m	13.4%	EBITDA margin declinedue to the timing of
				major contract milestones and costs.
Telstra Enterprise3	$1,358m	$1,550m	14.1%	Underlying NAS EBITDA performance
				continues to improve exclusive of contract
				milestones

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1H17 restated for telkomtelstra revenue previously NAS now included in global connectivity.
Segment comparatives reflect organisational changes that have occurred since the prior reporting period to present a like-for-like view.
Telstra Enterprise including nbn commercial works (products and services) in Telstra Operations segment.

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Product performance: Global connectivity

Global connectivity	1H17	1H18	GROWTH	GROWTH	Revenue growth in local currencydue to
($ amounts in AUD)				(in local currency)	continued NAS and fixed product growth.
Revenue1,2	$704m	$735m	4.4%	6.7%	Revenue growth in A$ impacted by currency appreciation

Fixed	$141m	$151m	7.1%	9.8%	Fixed growthdue to wholesale voice
Data & IP	$466m	$452m	-3.0%	-0.6%	customer growth in 2H17 and 1H18
NAS and other	$97m	$132m	36.1%	36.3%	Data & IP declineddue mostly to yield
					pressure
EBITDA1	$130m	$108m	-$22m	-$26m
Margin	18%	15%	-3pp	-5pp	NAS revenuegrowth due to uptake in
					managed network services and customer
					premise equipment. Expanded global services
					footprint with acquisition of Company85 in
					June 2017
					EBITDA declinedue to a revenue mix shift
					towards lower margin products and yield
					pressure

1H17 restated for telkomtelstra revenue previously NAS now included in global connectivity. Global connectivity EBITDA restated to include telkomtelstra and costs previously new businesses. 2. Global connectivity revenue excludes income including from the sale of assets 1H18 $4m (1H17 $5m).

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Foxtel

Foxtel	1H17	1H18	GROWTH	EBITDA lowerdue to lower revenue and
($ amounts in AUD under Australian IFRS)				continued investment in programming,
Revenue	$1,623m	$1,591m	-2.0%	particularly sports rights. Costs excluding programming were down 5% on the prior
				corresponding period
EBITDA1	$372m	$310m	-16.7%
				NPAT improvement including impairment
EBIT1	$234m	$158m	-32.5%	associated with Presto in prior year and lower interest expense

NPAT	$47m	$78m	66.0%	Broadcast3 and Now subscribers grew 3%
				year-on-year. The Foxtel Now box was
Total subscribers2	2,727k	2,774k	1.7%	launched late in the half
Broadcast churn	15.6%	13.6%	-2.0pp	Broadcast churnimproved year-on-year with lower use of no-contract offers

Receipts in Telstra’s books4				Share of Foxtel net profit since September
				2017 excludes $44m of cumulative
Share of net profit	-	$22m	n/m	unrecognised share of equity accounted
				losses up until 28 September 2017
Cable access revenue	$51m	$35m	-31.4%	Lowercable access revenuedue to lower
				access rate

Excludes unusual cost items (1H17 $6m; 1H18 $5m), share of profits from associates (1H17 $1m; 1H18 $5m) and impairment associated with the acquisition and dissolution of Presto. 2. Total subscribers in 1H17 restated to exclude Presto paying subscribers. Presto was closed on 31 January 2017.
Broadcast subscribers represent active residential subscribers receiving the Foxtel service via cable/satellite and a connected set-top-box (excluding Foxtel on T-Box).
Excludes interest received and Telstra Wholesale revenue received from Foxtel.

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Capital position

Capital position	Capital position	Capital position	Capital position	Capital position
Measure 1H17			FY17	Page 27 Gross debthas remained relatively flat with maturities of term debt being offset by term debt issuance and short term funding Net debtincreased as a result of funding strategic capex and working capital Financial parameters remain within our comfort zones Reduction inaverage gross borrowing costsreflects continued benefit of refinancing longer term debt at relatively low historical interest rates luding capitalised interest). ex excludes externally funded capex.
Gross debt1		$16.0b	$16.2b
Cash and cash equivalents		$1.2b	$0.9b
Net debt		$14.8b	$15.3b
Average gross borrowing costs2		5.4%	5.1%
Average debt maturity (years)		4.3	4.5
Financial parameters3	Comfort Zones
Debt servicing	1.3 - 1.8x	1.4x	1.4x
Gearing	50% to 70%	50.4%	51.2%
Interest cover4	>7x	14.7x	15.4x
Ratios
Capex to sales5		16.0%	17.8%
ROE6		23.6%	25.6%
ROIC7		13.7%	14.7%

FY18 guidance[1]

Measure FY17 ACTUAL	Measure FY17 ACTUAL	FY18 GUIDANCE as updated 1 Dec 2017
Total income	$28.2b	$27.6b to $29.5b
EBITDA	$10.7b	$10.1b to $10.6b
Net one-off nbn DA receipts less nbn net C2C	$1.3b	$1.4b to $1.9b
Capex	$4.6b	$4.4b to $4.8b
Free cashflow	$4.3b	$4.2b to $4.7b

1.This guidance assumes wholesale product price stability and no impairments to investments, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumes the nbn™ rollout is broadly in accordance with the nbn Corporate Plan 2018 adjusted for a cease sale on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017. Capex excludes externally funded capex.

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Half year Half year Half year 2018 results 2018 results 2018 results Q&A Andrew Penn Andrew Penn Chief Executive Officer Chief Executive Officer Page 29

Supporting material

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Capital Management Framework

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Product framework – income and operating expenses

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Operating expenses 4. nbn DA and commercial works 5. Foxtel and media 6. Business unit results

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Capital Management Framework

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FISCAL DISCIPLINE
1 2 3
MAXIMISING MAINTAINING RETAIN
RETURNS FOR FINANCIAL FINANCIAL
SHAREHOLDERS STRENGTH FLEXIBILITY
1. We remain committed to retain balance sheet settings consistent with an A band credit rating
2. Pay fully-franked ordinary dividend of 70-90% of underlying earnings [1,2]
3. Target capex/sales ratio of ~14% excluding spectrum from FY20 [4,5]
4. Maintain flexibility for portfolio management and to make strategic investments
Return in the order of 75% of net one-off nbn™receipts to shareholders over time via fully-franked special dividends [2,3]
Capex/sales ratio [4,5] of ~18% in FY18 and FY19
1. Underlying earnings is defined as NPAT from continuing operations excluding net one-off nbn receipts (as defined in footnote 2).
2. “net one-off nbn receipts” is defined as net nbn one off Definitive Agreement receipts (consisting of PSAA, Infrastructure Ownership and Retraining) less nbn net cost to connect less tax.
3. Return subject to no unexpected material events, assumes nbn™ rollout is broadly in accordance with the nbn Corporate Plan 2018 adjusted for a cease sale on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017
and receipt of associated one-offs, and is subject to Board discretion having regard to financial and market conditions, business needs and maintenance of financial strength and flexibility consistent with Telstra’s capital management framework.
4. Capex excludes expenditure on spectrum, measured on an accrued basis. Capex excludes externally funded capex.
5. The guidance also assumes the nbn™ rollout is broadly in accordance with the nbn Corporate Plan 2018 adjusted for a cease sale on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017.
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OBJECTIVES
PRINCIPLES
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Product framework - income

Income 1H17	Income 1H17	1H18	GROWTH $	GROWTH %
Mobile1	$5,043m	$5,208m	$165m	3.3%
Fixed excl. nbn connection2	$3,302m	$3,026m	-$276m	-8.4%
Recurring nbn DA	$212m	$296m	$84m	39.6%
Data & IP	$1,376m	$1,300m	-$76m	-5.5%
NAS3	$1,470m	$1,677m	$207m	14.1%
Global connectivity3	$709m	$739m	$30m	4.2%
Other core4	$778m	$789m	$11m	1.4%
Recurring core	$12,890m	$13,035m	$145m	1.1%
New businesses5	$94m	$75m	-$19m	-20.2%
Underlying	$12,984m	$13,110m	$126m	1.0%
One-off nbn DA receipts and nbn connection	$719m	$1,331m	$612m	85.1%
Guidance basis	$13,703m	$14,441m	$738m	5.4%
Guidance adjustments6	-	$69m	$69m	n/m
Reported basis	$13,703m	$14,510m	$807m	5.9%

Mobile includes non sales revenue Go Mobile Swap lease income 1H18 $126m (1H17 nil).
Fixed excludes one-off nbn connection revenue 1H18 $37m (1H17 $33m) and includes TUSOPA income 1H18 $77m (1H17 $80m).
1H17 restated for telkomtelstra revenue previously NAS now included in global connectivity.
Other core includes media, nbn commercial works (sale of assets) and other miscellaneous income.
New businesses includes Telstra Health, Ooyala and Telstra Ventures.
Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include M&A and Foxtel.

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Product framework - operating expenses

Operating expenses 1H17	Operating expenses 1H17	1H18	GROWTH $	GROWTH %
Mobile	$2,978m	$3,156m	$178m	6.0%
Fixed excl. nbn C2C1	$1,741m	$1,912m	$171m	9.8%
Recurring nbn DA	$20m	$23m	$3m	15.0%
Data & IP	$559m	$530m	-$29m	-5.2%
NAS	$1,358m	$1,576m	$218m	16.1%
Global connectivity2	$579m	$631m	$52m	9.0%
Other core3	$899m	$851m	-$48m	-5.3%
Recurring core	$8,134m	$8,679m	$545m	6.7%
New businesses2,4	$166m	$151m	-$15m	-9.0%
Underlying	$8,300m	$8,830m	$530m	6.4%
One-off nbn DA and nbn C2C	$212m	$309m	$97m	45.8%
Guidance basis	$8,512m	$9,139m	$627m	7.4%
Guidance adjustments5	-	$279m	$279m	n/m
Reported basis	$8,512m	$9,418m	$906m	10.6%

Fixed excludes nbn cost to connect (C2C) 1H18 $271m (1H17 $180m). nbn C2C represented against “One-off nbn DA and nbn C2C”.
Global connectivity costs restated to include telkomtelstra and international product costs previously new businesses.

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Other core includes media and nbn commercial works (sale of assets). 1H17 restated to include $165m (1H18 $134m) additional restructuring costs represented as a guidance adjustment in prior year. 4. New businesses includes Telstra Health, Ooyala and Telstra Ventures.
Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include Ooyala impairment.

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Operating expenses

Operating expenses 1H17	Operating expenses 1H17	1H18	GROWTH $	Core sales costsgrowth 14.2%. Growth including increased nbn access payments and variable cost growth supporting revenue growth across mobile hardware, NAS and global connectivity
Core sales costs1	$3,598m	$4,108m	$510m
Core fixed costs	$4,536m	$4,571m	$35m
- Underlying	$3,460m	$3,211m	-$249m	Ahead of run rate required for $1.5b productivity cost target with underlying core fixed decline of $249m or 7.2%
- NAS labour and corporate2	$1,076m	$1,360m	$284m
New businesses costs3	$166m	$151m	-$15m	New businesses costsdeclined due to cost management and appreciation in AUD
One-off nbn DA and nbn C2C	$212m	$309m	$97m
Guidance basis	$8,512m $9,139m		$627m	Increasednbn cost to connect(C2C) due to nbn rollout. Cost per connection was broadly flat with mix shift to business customers offset by unit cost reductions
Guidance adjustments4	-	$279m	$279m
Reported basis	$8,512m	$9,418m	$906m

Core sales costs excludes goods and services purchased associated with new businesses and nbn cost to connect (C2C).
NAS labour and corporate costs include significant transactions and events associated with NAS commercial works and labour, global connectivity costs including FX, Go Mobile Swap lease costs and bond rate impacts. 1H17 restated to include $165m (1H18 $134m) additional restructuring costs represented as a guidance adjustment in prior year.

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New businesses includes Telstra Health, Ooyala and Telstra Ventures. New businesses costs restated to exclude international product costs previously NAS labour and corporate.
Refer to 1H18 Half year results and operations review - guidance versus reported results reconciliation. Guidance adjustments include Ooyala impairment.

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nbn DAs and commercial works

1H17	1H17	1H18	Strong growth in one-off PSAA and Infrastructure Services Agreement (ISA) receiptsin line with the progress of the nbn rollout
Income	$1,057m	$1,791m
Commonwealth agreements and other Govt. policy commitments1	$90m	$87m	Increase inrecurring ISAdue to the nbn rollout
Recurring ISA: duct, rack and backhaul2	$212m	$296m	Sale of assetsrevenue related to HFC and cost recovery
nbn commercial works – sale of assets3	$79m	$124m
			nbn co decision to cease sales on hybrid fibre co-axial (HFC) technology from 11 December 2017 will delay future receipts
One-off nbn DAs	$676m	$1,284m
- ISA: Ownership receipts2	$141m	$237m	nbn commercial works – products and servicesrevenue provided through contracts outside of nbn DAs
- PSAA5	$535m	$1,047m
nbn commercial works – products and services3,4	$311m	$390m

Includes retraining and income from government grants under the Retraining Deed and TUSOPA. TUSOPA included as other income in “All other” segment 1H18 $77m (1H17 $80m). TUSOPA is run by Department of Communications and the Arts and the income is net of the levy paid.
Infrastructure Services Agreement (ISA) included in Telstra Wholesale segment. Recurring ISA included as other sales revenue. One-off ISA included as other income, including ownership receipts for assets transferred under the nbn Definitive Agreements (DAs).

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nbn commercial works revenue included in the Telstra Operations segment.
nbn commercial works – products and services revenue is recognised as NAS sales revenue.
This includes income from nbn disconnection fees (Per Subscriber Address Amount (PSAA)) included as other income and recognised in “All other” segment.

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Product performance: Media

Media 1H17	Media 1H17	1H18	GROWTH
Revenue1	$471m	$475m	0.8%
Foxtel from Telstra	$390m	$393m	0.8%
Other	$81m	$82m	1.2%
Foxtel from Telstra subscribers	748k	799k	6.8%
Telstra TV devices in market2	601k	1,092k	82%
Sports Live Pass users3	356k	1,586k	346%

Telstra Media delivers world class content experiences to differentiate and add value to our core products

Foxtel from Telstra revenue and subscriber growth in spite of overall industry transition from Broadcast to IPTV

Telstra TV devices are expected to continue their growth trajectory following the launch of TTV2 on 31 October 2017

Sports Live Pass users increased

significantly across AFL, NRL and Netball on the back of improved customer experience. Almost all users receive the service as part of their mobile subscription

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Media revenue excludes cable access revenue.
Telstra TV devices in market is defined as cumulative completed sales. 1H17 previously disclosed as cumulative landed sales based on orders. 3. Sport Live Pass users that have activated an AFL, NRL or Netball Live Pass.

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Business unit results

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Consumer growth including from postpaid
Income 1H17 1H18 GROWTH handheld and fixed bundles. Growth partly
offset by declines in prepaid handheld due to
Telstra Consumer & Small Business [1] $7.4b $7.4b 0.3% competition, mobile broadband due to shared
data plans and ongoing fixed voice decline
Consumer $5.9b $6.0b 1.0%
Small Business decline but a slowed rate
Small Business $1.5b $1.4b -4.3% compared to FY17. Double digit NAS growth
in 1H18. Mobile services declined with net
Telstra Enterprise [1,2] $3.8b $3.9b 2.4% SIO adds offset by ARPU reductions including
shared data impact. Ongoing fixed voice
decline
Domestic $3.0b $3.1b 1.8%
Telstra Enterprise domestic growth
International $0.8b $0.8b 5.2% including double digit NAS growth. Industry
ARPU declines across mobility and data & IP.
Telstra Wholesale $1.3b $1.4b 5.7% Ongoing fixed voice decline
Telstra Enterprise international growth
mainly due to NAS from additional CPE sales
and newly acquired Company85, and growth
in fixed products from FY17 initiatives
Wholesale growth due to increased
Infrastructure Services Agreement ownership
receipts in line with nbn network rollout
1. Segment comparatives reflect organisational changes that have occurred since the prior reporting period to present a like-for-like view.
2. Telstra Enterprise includes $104m (1H17 $98m) of international inter-segment revenue treated as external expense in Telstra Consumer & Small Business and Telstra Wholesale.
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CEO & CFO SPEECH NOTES

TELSTRA HALF YEAR RESULTS 15 FEBRUARY 2018

ANDREW PENN – CEO

SLIDE 1 - Half Year 2018 Results

SLIDE 2 - Disclaimer

Thank you Nathan.

Good morning and welcome to Telstra’s results announcement for the half year ended 31 December 2017.

Today I will be taking you through our key financial results, how we have delivered against our strategy and the progress we are making on our strategic investment program.

Our results are in line with guidance and we are pleased with the strong performance we saw in the half in terms of mobile net customers adds, churn and nbn.

These have been delivered in a period of significant change. Whether it’s the migration to the nbn, the competitive challenges, the ever-accelerating pace of technological change and as we prepare for the transition to 5G. We are today in one of the most dynamic periods the company has faced.

Against this background we need to increase our level of intensity even further. We need to do more, and we need to do it faster.

We are therefore driving a greater sense of urgency in everything we do. We are stepping up how we aggressively compete in the market particularly leveraging our multi-brand strategy including Telstra, Belong, Boost and Wholesale.

We are absolutely increasing our focus on reducing costs and while we announced increased targets in August, we will look to do even more.

We continue to accelerate the Strategic Program of investment which is critical to simplify and streamline 100 years of heritage, increase our strategic differentiation and therefore lay the foundation for the future.

However, at the same time we are scrutinising every aspect of our capital spending to ensure our investments drive the greatest results.

And we are driving future growth with new opportunities emerging from the core of the business.

SLIDE 3 – Half Year 2018 Results – Headlines

Let me take you through the key financial results.

Total income was up 5.4% to $14.4b on a guidance basis and up 5.9% to $14.5b on a reported basis.

As we previously disclosed to the market, we recorded a non cash impairment to Ooyala of $273m as we wrote this business to zero.

EBITDA on a guidance basis, which excludes the Ooyala impairment was up 2.4% to $5.3b.

On a reported basis, EBITDA was down 2.5% to $5.1b.

CHECK AGAINST DELIVERY

Page 1

Excluding the impairment, net profit after tax was up 9.5% to $2b and earnings per share was up 12.2% to 16.6 cents per share.

Including the impairment, net profit after tax was down 5.8% to $1.7b and earnings per share was down 3.4% to 14.3 cents per share.

The Board has declared a fully franked interim dividend of 11 cents per share.

Consistent with our new dividend policy, the interim dividend comprises of a 7.5 cents per share interim ordinary dividend and a 3.5 cents per share interim special dividend. We also announced that the DRP will recommence from the interim dividend.

We are also taking the opportunity today to reconfirm our previously communicated guidance for 2018 including the Board’s guidance that it expects FY18 total dividend to be 22 cents per share fully franked, including ordinary and special.

SLIDE 4 – Half Year Results – Delivered progress against strategy

Warwick is going to take us through the financial and operational results in more detail shortly. In the meantime I will comment on some of the highlights from the last 6 months against the framework of the 3 pillars of our strategy:

delivering brilliant customer experiences;
driving value and growth from the core;
and building new growth businesses close to the core.

I will also comment on the progress we are making in relation to our strategic investment program.

SLIDE 5 – Half Year Results – Deliver brilliant customer experiences

I know we have more to do to improve the experience we provide our customers.

Delivering a brilliant customer experience is our number one strategic priority and while we do have more to do, we have achieved some important and significant milestones over the last 6 months.

We are providing more value to our customers in our fixed portfolio with new unlimited plans at a $99 price point and double the data on all other plans.

We are Australia’s leading aggregator of digital entertainment products and have injected more value into plans through the inclusion of enhanced media offerings, including Telstra TV and Foxtel Now.

Similarly in mobiles we have enhanced all of our plans with more data, more media and more services.

We are further eliminating bill shock for customers with the introduction of Order Estimator which provides customers with a clear picture of what they can expect in their first bill. We now issue 110,000 order estimates per month and customers who receive this service provide NPS feedback that is 18 points higher than customers that do not.

On fixed, we are moving to provide customers with an always connected experience. We have launched the smart modem to more than 85,000 customers through our new high value plans and I am pleased to announce that later this month we are extending this to all home internet bundles for new, migrating or recontracting customers.

The smart modem brings together our fixed and 4G mobile networks in a single device to get new customers activated sooner, and existing customers back online quickly if their fixed service is interrupted.

CHECK AGAINST DELIVERY

Page 2

Once plugged in, the smart modem will connect a home or small business to the internet within minutes, over 4G, without having to wait for the fixed service to be installed and switched on, which can take a long time for customers migrating to nbn.

Our new call centre solution Get Help! means reduced call times for nbn complaints by more than 6 minutes and we are escalating 60% fewer issues to Telstra field technicians.

We are confident that all of these initiatives are leading to a better customer experience.

There is no doubt however, that the rollout of nbn is having an impact on customer satisfaction overall. As I have previously commented, the key issues from a customer’s perspective are firstly the connection experience that I have just mentioned.

In this regard, we are working closely with nbn and the industry to improve activation and assurance for customers and the ACCC’s recent decision to regulate service standards from nbn to retail service providers such as Telstra will help this. In the meantime, our smart modem will also make a material difference.

The second nbn issue for customers is speeds. We have recently increased ours to further deliver a market leading 80 per cent minimum nbn speed during peak times, above the ACCC guidelines. In fact we are currently delivering an average of more than 85% during peak times.

Finally affordability. It is critical that in the long term nbn wholesale prices are set at a level which ensures affordability of broadband for all Australians.

We are therefore pleased nbn has recently introduced discounts on its 50/20 plans, which is a step in the right direction as it enables this to flow through to retail offers for customers. We have responded by upgrading to this plan on our most popular bundles and I am pleased to announce that we are in the process of bestowing 50/20 speeds to the majority of our nbn customers.

Against the background of customer experience issues relating to nbn, strategic NPS was flat compared to the prior period, while we achieved our 3 – 6 point target increase in episode NPS which was up 4 points.

Excluding nbn, episode NPS was up 6 points. On a sequential basis strategic NPS which includes the seasonality of how we measure Enterprise customers was down 6 points.

I also wanted to take a moment to comment on the Universal Service Obligation given the recent announcement by Government to review these arrangements and this importance of this to customers.

The USO requires Telstra to provide a basic telephony service to every home in Australia. It is a contract previously sent out to tender by the Government where Telstra has been the only operator prepared to take on the obligation.

It is critically important to ensure every Australian is always connected. We are open to revising the agreements we have with Government and considering alternative technologies to deliver the USO.

Indeed Mobile coverage continues to reach more people particularly through Telstra’s network which is by far the largest in the country. However, there are still people in remote areas who are not connected, where mobile coverage does not exist. They need access to connectivity too.

Others in the industry would like to remove the USO in order to avoid making their contribution. But we will not cut this essential lifeline for regional Australians prematurely without a genuine alternative to the current USO in place for everyone.

SLIDE 6 – Half Year 2018 results – Drive value and growth from the core

Turning to the second pillar of our strategy – driving value and growth from the core.

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Telstra has now increased its customer base in mobiles for 20 consecutive halves despite intense competition.

During the 6 months we again saw strong customer acquisitions with 235,000 net new retail mobile services including 130,000 retail post-paid handheld.

We also had success in wholesale mobility with 118,000 net adds.

In September we further invested in our multi brand strategy with the launch of Belong Mobile which has added 21,000 customers since launch.

We continue to see very strong performance in mobile post-paid churn at a world class level of less than 11%.

Despite the strong customer performance however, overall mobile services revenue declined 1.2% principally driven by post-paid handheld ARPUs which were down 2.9%. Warwick will take you through the detail of the competitive dynamics that have impacted this in a moment.

On the fixed side, we continue to perform well in nbn with 454,000 new connections in the half year taking our total nbn customers to more than 1.6m and our market share, excluding satellite to 51%.

In the half we added 21,000 net new fixed data services and 57,000 new retail bundles.

The acceleration of the rollout of nbn has had a significant economic impact on our EBITDA. As we have previously reported we expect this to ultimately total around $3bn per annum.

Fixed EBITDA for the half was down 29% with a $450m incremental negative impact in the period. This was the consequence of higher CVC/ AVC charges of $248m and around $200m from the loss of fixed voice revenue and wholesale margins.

This was partly offset by increases in recurring nbn DAs of approximately $80m leading to a net nbn headwind of $370m.

Of the approximately $3b total impact of the nbn on our EBITDA, we have cumulatively absorbed $870m to date including the $370m in the period.

Against this background we are pushing hard and seeing strong momentum in our productivity program where we delivered a 7.2% or $249m decline in core fixed costs in the half year period.

Our media strategy is continuing to deliver core differentiation to our products.

We now have more than 1 million Telstra TVs in market with the launch of Telstra TV2 and more than 1.5 million customers watching AFL, NRL and netball through the Telstra Live sports app.

We have expanded our digital content range. Most recently we secured the rights to live stream all AFL women’s matches on mobile and on Telstra TV.

We have also recently incorporated Foxtel Now into our fixed bundles offering by far the best range of media content and services in the country.

We continue to expand and deepen our network leadership in conjunction with the long term strategic investments that we are making. During the period we passed more than 90% of the Australian population with 4GX, delivering double the mobile speed of standard 4G.

As the demand for data continues to grow we are committed to maintaining the largest and fastest mobile network and our continued lead over the competition has been called out in a number of survey results reported in the half.

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The Ookla speed report of mobile networks in Australia released in November confirmed Telstra’s superior performance well ahead of our competitors as the fastest mobile network in the country. Telstra’s Speed Score was more than 15% higher than the next nearest provider.

The P3 survey also awarded Telstra the lead in mobile data speeds nationally, even more impressive given the exponential growth in data traffic on our networks. We scored particularly well on the connecting roads between the cities and towns, a testament to our regional mobile network investment.

In addition to the Ookla and P3 results, we commissioned global network performance analyst, Systemics to conduct a comprehensive benchmarking survey of Australian mobile networks.

Telstra scored No. 1 nationally across the four key performance categories of voice, browsing, data and video.

Over 99% of all traffic on mobile networks in Australia today is data. In 12 independent measures and awards across every year since 2012 Telstra has been rated the best and/or the fastest mobile network in this country.

This is our leadership position that we intend to maintain because we know its what’s most important for our customers.

Telstra also continues to lead in terms of brand, recognised for the third year in a row as Australia’s Most Valuable Brand by Brand Finance.

SLIDE 7 – Half Year 2018 Results – Building growth businesses close to the core

Turning now to the third pillar of our strategy building new growth businesses close to the core.

NAS continued to grow strongly with revenue up 14.1% to almost $1.7b with continued strong performance in Cloud, integrated services and commercial works.

Whilst we experienced a 2 percentage point decline in EBITDA margins, this reflected the lumpiness of profitability reporting of NAS as a consequence of large contract milestones and wins. The underlying trend in NAS EBITDA remains on track and we still expect to achieve our target of mid teens NAS margins over the longer term.

During the half we enhanced our cyber security services with the opening of two new Security Operations Centres in Melbourne and Sydney. We have plans to open a further Security Operations Centre this year in London.

We have seen strong demand for our Cyber Security offerings in the context of a market where this is becoming an increasingly important issue for Companies and Boards.

During the period we confirmed we are investing in two new subsea cables with connections from Hong Kong to the west coast of the US, as well as the Indigo consortium connecting Perth, Singapore and Jakarta.

This will continue to support our growth in global connectivity where revenues were up 6.7% on a constant currency basis.

EBITDA was down 17% due to one off costs, some intense pricing competition and the revenue mix. However, we are on track to turn this around.

Our IoT business continues to be a source of new growth as it is nearing $200m in revenue, making us one of the most successful IoT businesses globally.

A good example of what we are doing in IoT is our recent acquisition of MTData which provides IoT capabilities and services to the logistics sector.

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Recently Linfox has selected MTData and Telstra as strategic partner to implement advanced telematics solutions that will provide leading edge, actionable data in their transport logistics.

Our Smart Cities solutions have also gathered momentum with Telstra being awarded contracts from the City of Launceston and the City of Casey in Melbourne to solve modern city problems in parking management and environmental management.

Apart from the acquisition of MT Data during the half, we also acquired VMTech which is driving delivery and management of enterprise-grade hybrid cloud, connectivity and security solutions.

I also want to take a moment to comment on Ooyala following the impairment announced earlier this month. The digital media and Ad Tech market has continued to change rapidly and be challenging and this became the primary trigger for the write down.

We are exiting Ad Tech although Ooyala continues to have assets in digital media workflow through its Flex offering where the opportunity pipeline is strong. When combined with Ooyala's OVP products, we believe we have a set of offerings that can scale in the media services market although not sufficient to support the previous valuation.

We also have complimentary assets and capabilities through Telstra Broadcast Services which provides network services and operations to many of the world's leading broadcasters, primarily focused at live events.

TBS is growing strongly and currently supplying and managing the video services for broadcasters around the world direct from the Winter Olympics in Korea. Going forward we plan to drive business synergies between Ooyala and TBS.

SLIDE 8 – Progress on Strategic Investment Program

Let me turn now briefly to the progress we are making in relation to our strategic investment program.

We announced in August 2016 that we would invest up to $3b to achieve a material step change in our strategic position recognising the significant growth and demand in network capacity and innovation.

We formally launched the program in November 2016.

Approximately half way into the program from an investment perspective, we have so far invested an incremental $1.4b of capex across two major streams, Digitisation and Networks of the Future.

While these two streams are the destination of most of the investment, the program also incorporates our productivity efforts and Customer Experience and Culture and Capability improvements.

We expect to achieve the full run rate of $500m EBITDA benefits from the investment by FY21 with $100m being delivered this financial year.

We are on track in relation to delivering the benefits in our productivity program having delivered almost $500m out of the total $1.5b committed to date.

We are also on track in relation to the 3 – 6 point improvement in Episode NPS but not Strategic NPS which is being impacted by the migration of customers to nbn. However, the underlying trends are heading in the right direction and we are confident of our ability to deliver against this.

I will briefly make some comments on some of the key foundational investments and deliverables we have made so far before handing over to Warwick.

SLIDE 9 – Key foundational investment - digitisation

As I mentioned earlier, the digitisation program is at an early stage but with some significant quick win capabilities already implemented across the business.

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A significant part of our initial focus has been building the people capability to support our digitisation program with more than 100 data scientists and 30- 40% of IT projects now being delivered through the agile methodology. We are on track to have 100 agile teams by the end of the financial year.

The results of what these teams are delivering can be felt in three important areas – in customer experience, in productivity for our employees and in enabling new revenue streams.

In terms of customer experience and employee productivity, we have seen improvements through our digital self-service channels with the introduction of Codi, our artificial intelligence based virtual assistant.

This allows us to respond more quickly to customers’ queries and supports a big shift of interactions with customers to digital and self-service tools.

Codi now handles Prepaid, Postpaid, Entertainment/Apps and general Telstra enquiries, and will be extended as it continues to develop. It has engaged with almost 300,000 customers since its launch in October.

In addition, around 35,000 nbn customers per month are now using a new “Online Order Status Tracker” tool that enables them to review the progress of their nbn order and modem delivery digitally. We have also launched a new service which enables customers to directly schedule our field service workforce through digital channels.

These are just some of the examples of the early quick win digital capabilities we have delivered and overall in consumer, we have seen a 13% reduction in call volumes and a 24% increase in the number of active 24/7 app users in the last 6 months. This means we took almost 2 million fewer inbound calls this half compared to last half, and this is even taking into account higher nbn related calls.

In Enterprise, we launched Telstra Connect, to enable self service capabilities for our customers as well as Expert Finder, a new online capability that connects our customers with our experts to solve customers’ “pain points” and generate revenue.

In relation to creating new revenue streams in our enterprise business, we are shifting to a new IP enabled digital enterprise product set. So far we have launched Liberate, our new digitally enabled unified communications suite merging fixed and mobile, and the Telstra programmable network with more than 150 customers signed up in the half.

As the digitisation program gains momentum, we have a number of important platform and foundational changes due to be implemented that will deliver significant benefits.

These include transferring all of our Customer Relationship Management systems to a single cloud enabled Salesforce platform, delivering better outcomes for customers and enabling us to shut down 5 legacy systems; revamping our ecommerce experience, significantly improving the online shopping experience and the delivery of a new unified identity platform.

SLIDE 10 – Key foundational investment – Networks

As we have passed the half way point on our Network of the Future Program, I wanted to reflect on some of the achievements to date from the strategic incremental investments that we have made there.

We continue to enhance our mobile leadership and we are rolling out an extensive small cell program both to support the mobile black spot program as well as metro densification for coverage and capacity.

We have already activated more than 400 small cells with a further 850 planned. In addition in FY18 we plan to complete more than 1600 macro mobile builds inclusive of new sites, upgrades to existing sites and under the Mobile Black Spots Program.

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We have a long history of investing in regional Australia, and over the last three years, we have invested more than $2.2 billion in our regional network.

Last month, I was in Wellington Mill, Western Australia switching on the 300th base station under the Mobile Black Spot Program. We are building 577 of the 765 or 75% of the towers under this program.

I have previously mentioned our Next Generation OSS platform which is a key element of our network transformation build and we are continuing to invest in this important capability to deliver real time customer experience monitoring and impact assessment and recovery capability.

We have substantially progressed the rollout of our NextGen optical transport network which is now deployed in routes across five capital cities as we are upgrading our backbone infrastructure to support a five times increase in capacity.

We are building the platforms that we will need for the future including SDN and NFV and importantly for the internet of things.

During the half we switched on our Cat M1 IoT platform, which is the biggest IoT platform in the country with coverage of around three million square kilometres. We followed this in January with the launch of our Narrowband IoT platform which is now available over our mobile network in major Australian cities and regional towns.

These investments continue to support industry leading mobile differentiation, coverage, speed and resiliency.

We are also well advanced in relation to our plans for 5G and last week announced a suite of activities over the next 6 months on the Gold Coast on what we are calling the Festival of 5G. A key initiative last week was the launch of the 5G innovation centre in Southport.

We made the first call in the world using 5G on a 26GHz spectrum and having broken through the 1GB per second speed barrier on 4G, overnight in the US we participated in a world first lab demonstration of 2 Gbps speeds on 4G together with Qualcomm, Ericsson and Netgear.

We are gearing up for new speed milestones in the lead up to 5G and we will continue to work with our partners on this technology as part of delivering the best network for our customers.

The additional spectrum we secured in December means we can continue to deliver the best experience for our customers and meet the ever growing demand for data.

Some of this spectrum will also support the early evolution of 5G technology beyond the trials we already have planned for 2018.

Finally, we are committed to not only deepen and extend our network leadership but also move the whole platform to be IP enabled and SDN NFV operated.

In the coming months we will be focussed on dramatically simplifying our post NBN fixed network infrastructure to reduce the number of our exchange sites and simplify our network topology.

SLIDE 11 – Summary

Let me summarise before handing back to Warwick.

As I set out earlier, our results are in line with guidance and we are pleased with the strong performance we achieved in the half in terms of mobile net customers adds, churn and nbn all delivered in a highly competitive market in both mobiles and fixed.

We have made good progress on our productivity programme with a cost reduction of 7.2% in underlying fixed core costs in the half and we are confident we can continue to deliver on our commitments.

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Our productivity program is critical against the background of the acceleration in the rollout of the nbn which has a material economic impact on Telstra including the $870m impact on EBITDA we have absorbed to date.

The impact of the nbn, along with increased competition also highlights the importance of our up to $3 billion strategic investment program and we are on track to deliver economic benefits of more than $500 million of EBITDA by FY21.

Through the networks program we have implemented significant foundational platform investments which are critical to not only supporting data growth but delivering a step change in our strategic differentiation and supporting long term growth in mobile ARPU.

The digitisation program is at an early stage but we have already delivered some quick wins with new capabilities implemented across the business.

In our Enterprise business, revenue in Network Applications and Services once again saw strong growth, and we believe value will grow as we leverage new areas of opportunity including cyber security and IoT.

As I said in my introduction we are operating in one of the most dynamic periods the company has faced and we need to increase our intensity even further.

We are absolutely committed to increasing our focus on continuing to reduce costs, accelerating the Strategic Program of investment and focusing on future growth.

In summary, I am pleased that we have been able to deliver a solid result in line with guidance.

WARWICK BRAY – CFO

SLIDE 12 – HALF YEAR 2018 RESULTS

Thank you Andy.

SLIDE 13 - AGENDA

I will now go through each of the sections on screen …

SLIDE 14 – GROUP RESULTS – INCOME STATEMENT

… beginning with 1H18 group results.

On a reported basis:

Income was up 5.9%
EBITDA, EBIT and NPAT were down 2.5%, 3.4% and 5.8% respectively; and
• Basic EPS was down 3.4% to 14.3 cents.

On a guidance basis:

Income was up 5.4%; and
EBITDA was up 2.4%.

NPAT was up 9.5% to $2.0b and basic EPS was up 12.2% to 16.6 cents excluding the Ooyala impairment of $273m.

Depreciation and amortisation decreased by 1.3%.

Net finance costs decreased by 3.2% mostly due to refinancing debt at lower rates, partly offset by lower average cash balances.

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Income tax was up 1.5% reflecting higher earnings

On dividend…

SLIDE 15 – GROUP RESULTS – TOTAL INTERIM DIVIDEND

… the Board has resolved to pay a total interim dividend for 1H18 of 11 cents per share, fully franked. Consistent with our Capital Management Framework announced in August 2017, our 1H18 interim dividend comprises:

Interim ordinary dividend of 7.5 cents per share; and
Interim special dividend of 3.5 cents per share.

The interim ordinary dividend represents a 71% payout ratio on underlying earnings excluding impairment. The interim special dividend represents a 58% payout ratio on the net one-off nbn receipts in the half.

We expect the FY18 total dividend to be 22 cents per share, fully franked, including ordinary and special dividend in accordance with our dividend policy announced in August 2017. The basis upon which we provide this guidance is detailed in the slide footnotes.

We now move to free cashflow….

SLIDE 16 – GROUP RESULTS – FREE CASHFLOW

… which was $1.8bn in 1H18 on a guidance basis. Guidance basis excludes M&A and restructuring costs from the prior year.

Free cashflow on a reported basis was up $338m including improved movement in working capital, partly offset by increased cash capex associated with our strategic investment.

Change in working capital reduced cash in both 1H17 and 1H18.

1H18 working capital benefitted from:

improved movement in payables which can vary significantly depending on financial period end dates vs payment cycles;
improved movement in inventories related to nbn network commercial works in the prior period;
improved movement from mobile leasing partly offset by higher 1H18 mobile hardware sales; and
improved movement in nbn DA one-off receipts.

Turning now to income performance by product.

SLIDE 17 – INCOME GROWTH BY PRODUCT

Reported income increased 5.9% to $14.5bn.

One-off nbn DA receipts and connection revenue increased $612m including growth from PSAA and ISA ownership receipts in line with the progress of the nbn network rollout.

Underlying income increased $126m or 1%:

Mobile was up $165m including Go Mobile Swap lease income.
Fixed was down $276m.
Data and IP was down $76m.
Recurring nbn DA was up $84m reflecting nbn co’s ongoing use of our infrastructure.
NAS continued its double-digit rate of growth, up $207m or 14.1%; and
Global connectivity was up $30m.

Turning to expenses…

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SLIDE 18 – OPERATING EXPENSES

… where we are delivering against our $1.5bn net productivity target with a $249m or 7.2% reduction in underlying core fixed costs in 1H18. This means that the results of our cost productivity programmes more than offset inflation, increased power costs and reinvestment.

We continue to focus on productivity that improves customer advocacy, improves internal processes and takes cost out of our business.

Our company-wide productivity efforts have now delivered almost $500 million cumulatively from the project to date.

Looking across our first half costs, there were three main factors that masked the underlying core fixed cost decline.

Increased nbn costs including CVC/AVC costs of $248m and one-off DA and cost to connect of $97m
Increased NAS costs of $218m which support growth in NAS revenue; and
Increased mobile hardware costs as a result of increased sales and device prices. The mobile hardware margin in dollar terms was broadly flat on PCP.

The average net nbn cost to connect per customer in 1H18 was broadly flat on PCP. In this half, we had a higher proportion of business connections which are more expensive. We continue to focus on reducing the unit cost.

Currently, our reported nbn cost to connect includes some costs that are business-as-usual nbn connections. The amount that is BAU is small and will contribute to tens of millions of dollars of additional cost to connect in FY18.

In FY19, we plan on revising our nbn cost to connect to capture only nbn migrations from legacy networks and ensure that the one-off nbn cost to connect is zero at the end of migration to nbn.

Turning to product EBITDA performance.

SLIDE 19 – EBITDA

Overall, we saw an increase in EBITDA on a guidance basis, up 2.4% to $5.315bn.

Underlying EBITDA was down $389m. The negative recurring influence of the nbn for this half was approximately $370m. This means we have absorbed $870m of the nbn impact to date.

The impact of the nbn on our recurring EBITDA includes:

Increased CVC/AVC payments to nbn co
Increased recurring nbn receipts, e.g. ISA
Some of the reductions in fixed voice and data and IP revenues, including wholesale; and
Cost savings on our legacy networks.

In 1H18, the nbn impact of approximately $370m included:

$248m increased network payments to nbn co, and
around $200m other reduction in fixed EBITDA including wholesale; offset by
$81m increase in recurring nbn receipts.

Outside recurring nbn impacts, the remaining core was down approximately $15m. We will go through this on the next slide.

New businesses EBITDA was down $4m excluding impairment.

One-off nbn DA EBITDA and nbn costs to connect were up $515m in line with the nbn network rollout. This included $612m of increased income including retraining, partly offset by $97m of increased costs.

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Turning to recurring core product EBITDA performance.

SLIDE 20 – PRODUCT EBITDA PERFORMANCE

Starting from the bottom, the difference between the reported EBITDA of $5.061bn and the recurring core of $4.372bn, is the guidance adjustments, nbn one-off and new businesses.

Our recurring core EBITDA was down approximately $15m excluding the $370m recurring impact from nbn.

Mobile was down $13m;
Data & IP was down $47m mostly due to legacy migration;
NAS was down $11m impacted by timing of major contract milestones;
Global connectivity was down $22m; and
Other core was up $74m including: increased nbn commercial works sale of assets and lower restructuring costs in 1H18, partly offset by a lower direct contribution from media.

Turning now to our performance by product.

SLIDE 21 – PRODUCT PERFORMANCE MOBILE

Mobile revenue was up 0.8% on the prior corresponding period including net SIO add momentum and hardware growth.

During the half we added 235,000 retail mobile services, including 130,000 postpaid handheld services. We added 21,000 Belong mobile and 118,000 wholesale mobile services in the half, as we successful execute on our multi-brand strategy.

Postpaid handheld revenue declined 1.1% with Q2 SIO momentum offset by ARPU ex MRO decline of 2.9%. Postpaid handheld ARPU was influenced by competition and some one-off impacts. We are continuing to see customer migration to higher minimum monthly commitment plans in consumer, however this has been offset by lower out of bundle revenue.

By segment, sequential postpaid handheld ARPU growth was achieved in consumer in 2H17, this reversed in 1H18. Business and enterprise ARPU also declined sequentially in 1H18 due to reduced out of bundle revenue including from roaming.

Postpaid mobile handheld churn of 10.9% continues to be low by international standards.

The rate of mobile broadband revenue decline in 1H18 improved from 8.6% on PCP to 1.7% sequentially. This included revenue growth from postpaid services sequentially, offset by continued decline in prepaid.

We added 34,000 mobile broadband services in the half with postpaid SIO growth from tablet and entertainment offers in consumer, and continued demand for the productivity benefits of tablets and the nighthawk device in business and enterprise. Postpaid mobile broadband ARPU declined only slightly in 1H18 on 2H17 with introduction of new offers and Foxtel Now content inclusions. The decline in prepaid unique users and ARPU continued as customers substitute prepaid mobile broadband with mobile handset tethering.

And in media, over the last year, we have seen more than a threefold increase to over 1.5m customers who have activated our Sports Live Pass.

Machine to machine (M2M) revenue grew 7.4% on PCP, with 158,000 SIOs added in the half. We continue to see growth in M2M with new solutions being implemented in verticals such as logistics, utilities, health and financial services.

The mobile EBITDA margin decreased 1 point to 40% including impact from postpaid handheld ARPU reduction and some one-offs.

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Turning to fixed line...

SLIDE 22 – PRODUCT PERFORMANCE FIXED

… where we added 57,000 retail bundled customers during the half. 90% of our retail broadband customer base are now on a bundled plan, many of which are on our entertainment offers including Foxtel from Telstra.

We launched Telstra TV2 on 31 October and now have almost 1.1m devices in market.

Total fixed data revenue declined 1.5% with retail growth offset by increased nbn migration of wholesale services. Retail fixed data revenue increased with 21,000 net subscribers added in the half, including through Belong.

Fixed voice revenue decline increased to 12.7% including wholesale. Across retail customers, we are continuing to focus on retention and benefits from bundling.

Demand for our nbn services continues as we focus on delivering a great customer experience. During the half we added 454,000 nbn connections bringing total nbn connections to 1.63m, and a 51% share ex-satellite.

The fixed voice margin fell by 12 points, and fixed data margin fell by 17 points. Fixed margins were negatively affected by one-off costs of connecting customers to the nbn network, and growing network payments to nbn co. In the half, we have reduced the unit cost to serve for our nbn customers by 17% on PCP.

Excluding nbn related items, the fixed data margin was down approximately 1 point on PCP including the impact from mix shift to retail.

Across fixed, as you heard from Andy, we have taken bold steps to win customers, including the launch of unlimited data on higher-end plans and doubling data on all other plans.

Turning to data and IP...

SLIDE 23 – PRODUCT PERFORMANCE DATA & IP

…where revenue declined 5.5%, reflecting IP customer wins including volume and connection growth in IP VPN/MAN, offset by legacy declines across ISDN, IP WAN and calling products.

ISDN declined 12.9%. We expect further acceleration in decline as migration to contemporary products including nbn continues.

Our EBITDA margin of 59% was maintained.

Turning to Network Applications and Services, or NAS…

SLIDE 24 - PRODUCT PERFORMANCE NAS

…which grew double digit or 14.1% to almost $1.7bn in revenue for the half.

NAS EBITDA declined due to the timing of major contract milestones and timing of some costs. Our NAS business is subject to short-term variations due to major contracts and their associated milestones.

Exclusive of these contract milestones and one-offs, our underlying NAS EBITDA performance continues to improve and supports our commitment to mid-teen NAS margins at maturity through increased scale, scalable standardised offerings and lower unit costs.

Turning to global connectivity…

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SLIDE 25 – PRODUCT PERFORMANCE GLOBAL CONNECTIVITY

…which consists of our enterprise business outside Australia.

Revenue grew by 6.7% in local currency with customers continuing to respond well to the scale, reach and low latency of our products.

Global EBITDA declined in the half due to a revenue mix shift towards lower margin products and yield pressure. In 1H18, these impacts were more experienced in the first quarter. Our second quarter performance was more encouraging, and we are focussed on returning to growth.

Turning to Foxtel….

SLIDE 26 – FOXTEL

Foxtel revenue decreased 2% with Broadcast and Now subscribers growing 3% on the prior corresponding period.

Foxtel EBITDA decreased 16.7% due to lower revenue and continued investment in programming.

In Telstra’s books, we commenced equity accounting for Foxtel from the end of September 2017 following the capitalisation of our Foxtel loan.

Turning to our capital position…

SLIDE 27 – CAPITAL POSITION

Gross debt remained largely flat due to 1H18 maturities of term debt being offset by debt issuance and short term funding.

Net debt increased by $0.5bn as a result of funding the strategic capex and working capital.

As a result, our gearing increased to 52.5% including impairment.

Our financial parameters remain within our comfort zones and consistent with an A band credit rating.

Our average gross borrowing costs reduced to 4.8% and debt maturity was 4.4 years.

Capex to sales was 18% and we remain on track for FY18 capex guidance. Our capex numbers include around $60m of non cash capex related to data centres that we won’t fund until 2023.

Excluding impairment, 1H18 Return on Equity was 27% and Return on Invested Capital was 14.2%, well above our costs of capital. Our future ratios will continue to be influenced by the changing mix in our major products as well as reduced profitability in our fixed business.

Turning to guidance.

SLIDE 28 – GUIDANCE

Consistent with our announcement on 1 December 2017, in FY18 we expect income in the range of $27.6bn to $29.5bn and EBITDA of $10.1bn to $10.6bn.

Guidance for EBITDA is after absorbing incremental restructuring costs of $200m to $300m to support productivity.

We expect net one-off nbn DA receipts less nbn net cost to connect of $1.4bn to $1.9bn.

We expect to spend capex of $4.4bn to $4.8bn or approximately 18% capex to sales. We expect free cashflow to be in the range of $4.2bn to $4.7bn.

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As is usually the case, the basis on which we provided guidance is detailed in the slide footnote. Thank you. I will hand back to Nathan to moderate the Q&A. [END]

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Half year results and operations review

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Half year results and operations review

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Half year results and operations review

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Results of operations

	Results of operations
		2017 2016 Change Change $M $M $M % Half-year ended 31 December
	Sales revenue Other revenue(i) Total revenue Other income(ii) Total income (excluding finance income) Labour Goods and services purchased Other expenses Operating expenses Share of net (loss) from joint ventures and associated entities Earnings before interest, income tax expense, depreciation and amortisation (EBITDA) Depreciation and amortisation Earnings before interest and income tax expense (EBIT) Net finance costs Profit before income tax expense Income tax expense Profit for the period *Attributable to:* Equity holders of Telstra Entity Non-controlling interests Effective tax rate on operations EBITDA margin on sales revenue EBIT margin on sales revenue *Earnings per share (cents per share)* Basic(iii) Diluted(iii)	12,764 12,787 (23) (0.2) 143 19 124 n/m 12,907 12,806 101 0.8 1,603 897 706 78.7 14,510 13,703 807 5.9 2,663 2,684 (21) (0.8) 4,238 3,693 545 14.8 2,517 2,135 382 17.9 9,418 8,512 906 10.6 (31) (2) (29) n/m 5,061 5,189 (128) (2.5) 2,219 2,248 (29) (1.3) 2,842 2,941 (99) (3.4) 274 283 (9) (3.2) 2,568 2,658 (90) (3.4) 886 873 13 1.5 1,682 1,785 (103) (5.8) 1,703 1,791 (88) (4.9) (21) (6) (15) n/m 1,682 1,785 (103) (5.8) 34.5% 32.8% 1.7 pp 39.7% 40.6% (0.9) pp 22.3% 23.0% (0.7) pp cents cents Change cents Change % 14.3 14.8 (0.5) (3.4) 14.3 14.8 (0.5) (3.4)

(i) Other revenue primarily consists of Go Mobile Swap lease income (31 Dec 2017: $126m; 31 Dec 2016: $nil) and rental income.

(ii) Other income includes gains and losses on asset and investment sales (including assets transferred under the nbn Definitive Agreements), income from government grants under the Telstra Universal Service Obligation Performance Agreement, income from nbn[TM] network disconnection fees, subsidies and other miscellaneous items. (iii) Basic and diluted earnings per share are impacted by the effect of shares held in trust by Telstra Growthshare Trust (Growthshare) and by the Telstra Employee Share Ownership Plan Trust II (TESOP99).

n/m = not meaningful

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Revenue

	Revenue
		2017 2016 Change Change $M $M $M % Half-year ended 31 December
	Fixed products Fixed voice Fixed data Other fixed revenue(i) Total fixed revenue Mobiles Postpaid handheld Prepaid handheld Mobile broadband Machine to Machine (M2M) Satellite Mobile interconnection Mobile services revenue - wholesale resale Total mobile services revenue Mobiles hardware Total mobile revenue Data & IP ISDN products IP access Other data and calling products Total Data & IP revenue Total Network applications and services revenue Media Foxtel from Telstra IPTV Mobility and other content Cable Total media revenue Total Global connectivity revenue Other sales revenue(ii) Sales revenue Other revenue(iii) Total revenue Other income(iv) Total income	1,401 1,604 (203) (12.7) 1,257 1,276 (19) (1.5) 328 375 (47) (12.5) 2,986 3,255 (269) (8.3) 2,682 2,712 (30) (1.1) 493 502 (9) (1.8) 470 514 (44) (8.6) 73 68 5 7.4 7 7 0 0.0 106 101 5 5.0 91 67 24 35.8 3,922 3,971 (49) (1.2) 1,160 1,072 88 8.2 5,082 5,043 39 0.8 243 279 (36) (12.9) 568 577 (9) (1.6) 489 520 (31) (6.0) 1,300 1,376 (76) (5.5) 1,677 1,470 207 14.1 393 390 3 0.8 32 43 (11) (25.6) 50 38 12 31.6 35 51 (16) (31.4) 510 522 (12) (2.3) 735 704 31 4.4 474 417 57 13.7 12,764 12,787 (23) (0.2) 143 19 124 n/m 12,907 12,806 101 0.8 1,603 897 706 78.7 14,510 13,703 807 5.9

(i) Other fixed revenue includes intercarrier services, payphones, customer premises equipment and narrowband.

(ii) Other sales revenue primarily includes revenue related to nbn co access to our infrastructure and miscellaneous revenue. It also includes revenue from Telstra Health and Telstra Software.

(iii) Other revenue primarily consists of Go Mobile Swap lease income (31 Dec 2017: $126m; 31 Dec 2016: nil) and rental income.

(iv) Other income includes gains and losses on asset and investment sales (including assets transferred under the nbn Definitive Agreements), income from government grants under the Telstra Universal Service Obligation Performance Agreement, income from nbn[TM] network disconnection fees, subsidies and other miscellaneous items. n/m = not meaningful

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Expenses

	Expenses
		2017 2016 Change Change $M $M $M % Half-year ended 31 December
	Salary and associated costs Other labour expenses Labour substitution Redundancy Total labour Cost of goods sold Network payments Other Total goods and services purchased Service contracts and other agreements Impairment expenses (including bad and doubtful debts) Other Total other expenses Total operating expenses Depreciation Amortisation Total depreciation and amortisation	1,920 1,891 29 1.5 171 173 (2) (1.2) 470 474 (4) (0.8) 102 146 (44) (30.1) 2,663 2,684 (21) (0.8) 1,711 1,597 114 7.1 1,086 789 297 37.6 1,441 1,307 134 10.3 4,238 3,693 545 14.8 797 874 (77) (8.8) 391 102 289 n/m 1,329 1,159 170 14.7 2,517 2,135 382 17.9 9,418 8,512 906 10.6 1,496 1,508 (12) (0.8) 723 740 (17) (2.3) 2,219 2,248 (29) (1.3)
	Net finance costs
		2017 2016 Change Change $M $M $M % Half-year ended 31 December
	Finance income Finance costs Net finance costs	48 77 (29) (37.7) 322 360 (38) (10.6) 274 283 (9) (3.2)

Statement of Cash Flows

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Statement of Cash Flows
	2017 2016 Change Change $M $M $M % Half-year ended 31 December
*Cash flows from operating activities* Receipts from customers (inclusive of goods and services tax (GST)) Payments to suppliers and employees (inclusive of GST) Government grants received Net cash generated by operations Income taxes paid Net cash provided by operating activities *Cash flows from investing activities* Payments for property, plant and equipment Payments for intangible assets Capital expenditure (before investments) Payments for businesses and shares in controlled entities (net of cash acquired) Payments for joint ventures and associated entities Payments for other investments Total capital expenditure (including investments) Proceeds from sale of property, plant and equipment Proceeds from sale of business and shares in controlled entities (net of cash disposed) Proceeds from sale of other investments Distributions received from associated entities Interest received Other Net cash used in investing activities Operating cash flows less investing cash flows *Cash flows from financing activities* Proceeds from borrowings Repayment of borrowings Repayment of finance lease principal amounts Share buy-back Purchase of shares for employee share plans Finance costs paid Dividends paid to equity holders of Telstra Entity Other Net cash used in financing activities Net (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the period	15,679 15,039 640 4.3 (11,256) (11,173) (83) (0.7) 156 178 (22) (12.4) 4,579 4,044 535 13.2 (806) (882) 76 8.6 3,773 3,162 611 19.3 (1,928) (1,672) (256) (15.3) (634) (528) (106) (20.1) (2,562) (2,200) (362) (16.5) (53) (44) (9) (20.5) (2) (5) 3 60.0 (31) (9) (22) n/m (2,648) (2,258) (390) (17.3) 413 365 48 13.2 42 - 42 n/m 24 1 23 n/m 9 10 (1) (10.0) 34 55 (21) (38.2) 69 43 26 60.5 (2,057) (1,784) (273) (15.3) 1,716 1,378 338 24.5 4,366 1,392 2,974 n/m (4,127) (1,226) (2,901) n/m (60) (62) 2 3.2 - (1,502) 1,502 n/m (18) (22) 4 18.2 (387) (429) 42 9.8 (1,842) (1,894) 52 2.7 - 2 (2) n/m (2,068) (3,741) 1,673 44.7 (352) (2,363) 2,011 85.1 936 3,550 (2,614) (73.6) - 1 (1) n/m 584 1,188 (604) (50.8)

Statement of Cash Flows

2017
2016
Change
Change
$M
$M
$M
%
Half-year ended 31 December

Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax (GST))
Payments to suppliers and employees (inclusive of GST)
Government grants received
Net cash generated by operations
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Capital expenditure (before investments)
Payments for businesses and shares in controlled entities (net of cash acquired)
Payments for joint ventures and associated entities
Payments for other investments
Total capital expenditure (including investments)
Proceeds from sale of property, plant and equipment
Proceeds from sale of business and shares in controlled entities (net of cash disposed)
Proceeds from sale of other investments
Distributions received from associated entities
Interest received
Other
Net cash used in investing activities
Operating cash flows less investing cash flows
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Repayment of finance lease principal amounts
Share buy-back
Purchase of shares for employee share plans
Finance costs paid
Dividends paid to equity holders of Telstra Entity
Other
Net cash used in financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period

15,679
15,039
640
4.3
(11,256)
(11,173)
(83)
(0.7)
156
178
(22)
(12.4)
4,579
4,044
535
13.2
(806)
(882)
76
8.6
3,773
3,162
611
19.3
(1,928)
(1,672)
(256)
(15.3)
(634)
(528)
(106)
(20.1)
(2,562)
(2,200)
(362)
(16.5)
(53)
(44)
(9)
(20.5)
(2)
(5)
3
60.0
(31)
(9)
(22)
n/m
(2,648)
(2,258)
(390)
(17.3)
413
365
48
13.2
42
-
42
n/m
24
1
23
n/m
9
10
(1)
(10.0)
34
55
(21)
(38.2)
69
43
26
60.5
(2,057)
(1,784)
(273)
(15.3)
1,716
1,378
338
24.5
4,366
1,392
2,974
n/m
(4,127)
(1,226)
(2,901)
n/m
(60)
(62)
2
3.2
-
(1,502)
1,502
n/m
(18)
(22)
4
18.2
(387)
(429)
42
9.8
(1,842)
(1,894)
52
2.7
-
2
(2)
n/m
(2,068)
(3,741)
1,673
44.7
(352)
(2,363)
2,011
85.1
936
3,550
(2,614)
(73.6)
-
1
(1)
n/m
584
1,188
(604)
(50.8)

n/m = not meaningful

Statement of Financial Position

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Statement of Financial Position
	31 Dec 17 30 Jun 17 Change Change $M $M $M % As at
*Current assets* Cash and cash equivalents Trade and other receivables Inventories Derivative financial assets Current tax receivables Prepayments Total current assets *Non-current assets* Trade and other receivables Inventories Investments - accounted for using the equity method Investments - other Property, plant and equipment Intangible assets Derivative financial assets Deferred tax assets Defined benefit assets Total non-current assets Total assets *Current liabilities* Trade and other payables Employee benefits Other provisions Borrowings Derivative financial liabilities Current tax payables Revenue received in advance Total current liabilities *Non-current liabilities* Other payables Employee benefits Other provisions Borrowings Derivative financial liabilities Deferred tax liabilities Defined benefit liability Revenue received in advance Total non-current liabilities Total liabilities Net assets *Equity* Share capital Reserves Retained Profits Equity available to Telstra Entity shareholders Non-controlling interests Total equity Gross debt Net debt EBITDA interest cover (times)(i) Net debt to EBITDA ROA - Return on average assets(ii) ROE - Return on average equity(ii) ROI - Return on average investment(ii) ROIC - Return on invested capital(ii) Gearing ratio (net debt to capitalisation)(ii) (i) EBITDA interest cover equals EBITDA to net interest. (ii) Ratio has been measured on a continuing basis. n/m = not meaningful	587 938 (351) (37.4) 5,415 5,468 (53) (1.0) 1,102 893 209 23.4 53 21 32 152.4 11 11 0 0.0 536 531 5 0.9 7,704 7,862 (158) (2.0) 875 1,039 (164) (15.8) 29 29 0 0.0 648 194 454 n/m 275 292 (17) (5.8) 21,668 21,350 318 1.5 9,174 9,558 (384) (4.0) 1,644 1,623 21 1.3 53 44 9 20.5 112 142 (30) (21.1) 34,478 34,271 207 0.6 42,182 42,133 49 0.1 4,208 4,189 19 0.5 860 865 (5) (0.6) 117 190 (73) (38.4) 2,800 2,476 324 13.1 41 42 (1) (2.4) 146 161 (15) (9.3) 1,197 1,236 (39) (3.2) 9,369 9,159 210 2.3 66 70 (4) (5.7) 159 160 (1) (0.6) 164 134 30 22.4 14,819 14,808 11 0.1 452 536 (84) (15.7) 1,636 1,539 97 6.3 6 6 0 0.0 1,164 1,161 3 0.3 18,466 18,414 52 0.3 27,835 27,573 262 1.0 14,347 14,560 (213) (1.5) 4,422 4,421 1 0.0 (142) (105) (37) (35.2) 10,066 10,225 (159) (1.6) 14,346 14,541 (195) (1.3) 1 19 (18) (94.7) 14,347 14,560 (213) (1.5) 16,415 16,218 197 1.2 15,828 15,280 548 3.6 14.6 15.4 (0.8) (4.9) 1.6 1.4 0.2 14.3 13.8% 15.6% (1.8) pp 23.6% 25.6% (2.0) pp 18.9% 21.4% (2.5) pp 12.4% 14.7% (2.3) pp 52.5% 51.2% 1.3 pp

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ARPU ($)

ARPU($)
	Dec 2017Jun 2017 Dec 2016 $ $ $ Half-year ended	Change Change $ % Dec 17 vs Dec 16	Change Change $ % Dec 17 vs Jun 17
Fixed voice Fixed data Postpaid handheld (incl. MRO) Postpaid handheld (excl. MRO) Prepaid handheld Mobile broadband M2M Satellite	37.17 38.03 38.65 50.62 50.41 50.20 58.60 60.62 60.80 65.92 67.54 67.88 22.70 22.63 21.50 19.86 20.15 21.58 5.34 6.16 5.65 37.10 37.02 39.03	(1.48) (3.8) 0.42 0.8 (2.20) (3.6) (1.96) (2.9) 1.20 5.6 (1.72) (8.0) (0.31) (5.5) (1.93) (4.9)	(0.86) (2.3) 0.21 0.4 (2.02) (3.3) (1.61) (2.4) 0.07 0.3 (0.29) (1.4) (0.82) (13.3) 0.08 0.2
Services in operation
	Dec 2017Jun 2017 Dec 2016 K K K Half-year ended	Change Change K % Dec 17 vs Dec 16	Change Change K % Dec 17 vs Jun 17
Fixed products Basic access lines in service Retail(i) Wholesale Total fixed voice lines in service Fixed data SIOs - retail(ii) Fixed data SIOs - wholesale Fixed data ISDN access (basic line equivalents) Unconditioned local loop (ULL) SIOs Line spectrum sharing services (LSS)(iii) Mobiles SIOs Postpaid handheld retail mobile Prepaid handheld retail mobile Total mobile broadband (data card) M2M Satellite Total retail mobile Total wholesale mobile	5,120 5,363 5,549 955 1,124 1,251 6,075 6,487 6,800 3,532 3,511 3,469 554 683 784 4,086 4,194 4,253 918 973 1,004 1,234 1,390 1,496 326 384 437 7,692 7,562 7,480 3,575 3,662 3,870 3,964 3,930 3,977 2,346 2,188 2,053 32 32 31 17,609 17,374 17,411 862 744 637	(429) (7.7) (296) (23.7) (725) (10.7) 63 1.8 (230) (29.3) (167) (3.9) (86) (8.6) (262) (17.5) (111) (25.4) 212 2.8 (295) (7.6) (13) (0.3) 293 14.3 1 3.2 198 1.1 225 35.3	(243) (4.5) (169) (15.0) (412) (6.4) 21 0.6 (129) (18.9) (108) (2.6) (55) (5.7) (156) (11.2) (58) (15.1) 130 1.7 (87) (2.4) 34 0.9 158 7.2 0 0.0
			235 1.4
			118 15.9
Prepaid handheld unique users(iv)	2,432 2,498 2,616	(184) (7.0)	(66) (2.6)
Foxtel from Telstra	799 808 748	51 6.8	(9) (1.1)
(i) Includes nbnTMSIOs. (ii) Includes nbnTMSIOs and Belong SIOs. (iii) Excluded from wholesale broadband SIOs. (iv) Prepaid unique users defined as the three month rolling average of Note: Statistical data represents management’s best estimates.	monthly active prepaid users.

Workforce

Workforce
Dec 2017Jun 2017 Dec 2016 Half-year ended	Change Change % Dec 17 vs Dec 16	Change Change % Dec 17 vs Jun 17
Employee data
Full time staff equivalents 31,982 32,293 32,551	(569) (1.7)	(311) (1.0)

Note: Statistical data represents management’s best estimates.

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Segment information from operations

	Segment information from operations
		Total external income 2017 2016 Change $M $M % Half-year ended 31 December	EBITDA contribution 2017 2016 Change $M $M % Half-year ended 31 December
	Telstra Consumer and Small Business Telstra Enterprise Telstra Wholesale Telstra Operations All Other Total Telstra segments	7,418 7,395 0.3 3,938 3,845 2.4 1,412 1,336 5.7 637 525 21.3 1,105 602 83.6 14,510 13,703 5.9	3,592 3,923 (8.4) 1,556 1,753 (11.2) 1,317 1,226 7.4 (1,390) (1,414) 1.7 (14) (299) 95.3 5,061 5,189 (2.5)

Revenue by Business Segment

	Revenue by Business Segment
	2017 2016 Change $M $M % Half-year ended 31 December
	Telstra Consumer Fixed voice 797 900 (11.4) Fixed data 933 912 2.3 Mobile services revenue 2,475 2,468 0.3 Telstra Small Business Fixed voice 274 321 (14.6) Fixed data 161 160 0.6 Mobile services revenue 671 705 (4.8) Network applications and services (NAS) 127 112 13.4 Telstra Enterprise Australia Mobile services revenue 716 729 (1.8) Data & IP 975 1,024 (4.8) Network applications and services (NAS) 1,142 1,022 11.7

Revenue by Business Segment

2017
2016
Change
$M
$M
%
Half-year ended 31 December

Telstra Consumer
Fixed voice
797
900
(11.4)
Fixed data
933
912
2.3
Mobile services revenue
2,475
2,468
0.3
Telstra Small Business
Fixed voice
274
321
(14.6)
Fixed data
161
160
0.6
Mobile services revenue
671
705
(4.8)
Network applications and services (NAS)
127
112
13.4
Telstra Enterprise Australia
Mobile services revenue
716
729
(1.8)
Data & IP
975
1,024
(4.8)
Network applications and services (NAS)
1,142
1,022
11.7

Product profitability - EBITDA margins %

	Product profitability - EBITDA margins %
	Dec 2017 Jun 2017 Dec 2016 Half-year ended
	Mobile 40% 45% 41% Fixed data(i) 17% 28% 34% Fixed voice(i) 38% 45% 50% Data & IP 59% 58% 59% NAS 6% 9% 8%

Note: Product margins represent management's best estimates. (i) Includes nbn[TM] voice and data.

	Product profitability - EBITDA($M)
	Dec 2017 Jun 2017 Dec 2016 Half Year ended
	Mobile 2,052 2,254 2,065 Fixed data(i) 216 360 439 Fixed voice(i) 529 681 809 Data & IP 770 769 817 NAS 101 178 112

Note: Product margins represent management's best estimates. (i) Includes nbn[TM] voice and data.

	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-year comparison Half-year ended 31 December 2017
Summary Reported Half-yearly Data ($ Millions) Revenue Fixed products Fixed voice Fixed data Fixed other(i) Intercarrier services Total fixed revenue Mobiles Postpaid handheld Prepaid handheld Mobile broadband Machine to Machine (M2M) Satellite Mobile interconnection Mobile services revenue - wholesale resale Total mobile services revenue Mobiles hardware Total mobile revenue Data & IP ISDN products IP access Other data and calling products Total Data & IP revenue Total Network applications and services revenue Media Foxtel from Telstra IPTV Mobility and other content Cable Total media revenue Global connectivity Global connectivity - fixed Global connectivity - data & IP Global connectivity - other Total global connectivity revenue Other CSL New World Other sales revenue(ii) Total sales revenue Other revenue(iii) Total revenue Other income(iv) Total income (excluding financial income) Expenses Labour Goods and services purchased Other expenses Operating expense (before interest) Share of net profit/(loss) from jointly controlled and associated entities EBITDA Depreciation and amortisation EBIT Net finance costs Profit before income tax expense Income tax expense Profit for the year from continuing operations Profit/(loss) for the year from discontinued operations Profit for the year	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP
	Dec-13 Growth	Jun-14 Growth	Jun-14 Growth	Dec-14 Growth	Jun-15 Growth	Jun-15 Growth	Dec-15 Growth	Jun-16 Growth	Jun-16 Growth	Dec-16 Growth	Jun-17 Growth	Jun-17 Growth	Dec-17 Growth
	2,058 (7.3%) 1,090 6.0% 231 (1.3%) 288 (7.4%)	1,974 (7.6%) 1,128 6.5% 231 0.4% 298 2.8%	4,032 (7.4%) 2,218 6.3% 462 (0.4%) 586 (2.5%)	1,917 (6.9%) 1,175 7.8% 104 (55.0%) 309 7.3%	1,829 (7.3%) 1,204 6.7% 95 (58.9%) 311 4.4%	3,746 (7.1%) 2,379 7.3% 199 (56.9%) 620 5.8%	1,770 (7.7%) 1,254 6.7% 98 (5.8%) 293 (5.2%)	1,664 (9.0%) 1,259 4.6% 96 1.1% 285 (8.4%)	3,434 (8.3%) 2,513 5.6% 194 (2.5%) 578 (6.8%)	1,604 (9.4%) 1,276 1.8% 94 (4.1%) 281 (4.1%)	1,516 (8.9%) 1,277 1.4% 83 (13.5%) 271 (4.9%)	3,120 (9.1%) 2,553 1.6% 177 (8.8%) 552 (4.5%)

													1,401 (12.7%)
													1,257 (1.5%)
													82 (12.8%)
													246 (12.5%)
	3,667 (3.3%)	3,631 (2.3%)	7,298 (2.8%)	3,505 (4.4%)	3,439 (5.3%)	6,944 (4.9%)	3,415 (2.6%)	3,304 (3.9%)	6,719 (3.2%)	3,255 (4.7%)	3,147 (4.8%)	6,402 (4.7%)	2,986 (8.3%)
	2,495 5.0% 419 19.4% 643 11.6% 47 6.8% 7 0.0% 403 2.0% 65 27.5%	2,511 3.5% 460 22.3% 644 3.9% 54 17.4% 7 16.7% 377 2.2% 46 (23.3%)	5,006 4.2% 879 20.9% 1,287 7.6% 101 12.2% 14 7.7% 780 2.1% 111 0.0%	2,733 9.5% 498 18.9% 609 (5.3%) 55 17.0% 8 14.3% 412 2.2% 66 1.5%	2,718 8.2% 496 7.8% 604 (6.2%) 58 7.4% 8 14.3% 424 12.5% 76 65.2%	5,451 8.9% 994 13.1% 1,213 (5.7%) 113 11.9% 16 14.3% 836 7.2% 142 27.9%	2,734 0.0% 495 (0.6%) 602 (1.1%) 60 9.1% 8 0.0% 441 7.0% 63 (4.5%)	2,713 (0.2%) 464 (6.5%) 548 (9.3%) 72 24.1% 7 (12.5%) 98 (76.9%) 57 (25.0%)	5,447 (0.1%) 959 (3.5%) 1,150 (5.2%) 132 16.8% 15 (6.3%) 539 (35.5%) 120 (15.5%)	2,712 (0.8%) 502 1.4% 514 (14.6%) 68 13.3% 7 (12.5%) 101 (77.1%) 67 6.3%	2,736 0.8% 511 10.1% 478 (12.8%) 78 8.3% 7 0.0% 100 2.0% 77 35.1%	5,448 0.0% 1,013 5.6% 992 (13.7%) 146 10.6% 14 (6.7%) 201 (62.7%) 144 20.0%
													2,682 (1.1%)
													493 (1.8%)
													470 (8.6%)
													73 7.4%
													7 0.0%
													106 5.0%
													91 35.8%
	4,079 7.3% 784 2.3%	4,099 5.0% 708 (3.1%)	8,178 6.1% 1,492 (0.3%)	4,381 7.4% 946 20.7%	4,384 7.0% 940 32.8%	8,765 7.2% 1,886 26.4%	4,403 0.5% 1,121 18.5%	3,959 (9.7%) 955 1.6%	8,362 (4.6%) 2,076 10.1%	3,971 (9.8%) 1,072 (4.4%)	3,987 0.7% 1,072 12.3%	7,958 (4.8%) 2,144 3.3%	3,922 (1.2%)
													1,160 8.2%
	4,863 6.5%	4,807 3.7%	9,670 5.1%	5,327 9.5%	5,324 10.8%	10,651 10.1%	5,524 3.7%	4,914 (7.7%)	10,438 (2.0%)	5,043 (8.7%)	5,059 3.0%	10,102 (3.2%)	5,082 0.8%
	363 (8.8%) 592 5.9% 728 (3.2%)	349 (7.9%) 598 4.9% 723 0.7%	712 (8.4%) 1,190 5.4% 1,451 (1.3%)	340 (6.3%) 590 (0.3%) 528 (27.5%)	322 (7.7%) 590 (1.3%) 514 (28.9%)	662 (7.0%) 1,180 (0.8%) 1,042 (28.2%)	312 (8.2%) 583 (1.2%) 540 2.3%	291 (9.6%) 557 (5.6%) 548 6.6%	603 (8.9%) 1,140 (3.4%) 1,088 4.4%	279 (10.6%) 577 (1.0%) 520 (3.7%)	261 (10.3%) 555 (0.4%) 506 (7.7%)	540 (10.4%) 1,132 (0.7%) 1,026 (5.7%)
													243 (12.9%)
													568 (1.6%)
													489 (6.0%)
	1,683 (1.5%)	1,670 0.2%	3,353 (0.7%)	1,458 (13.4%)	1,426 (14.6%)	2,884 (14.0%)	1,435 (1.6%)	1,396 (2.1%)	2,831 (1.8%)	1,376 (4.1%)	1,322 (5.3%)	2,698 (4.7%)	1,300 (5.5%)
	853 28.9%	1,110 26.6%	1,963 27.6%	966 13.2%	1,353 21.9%	2,319 18.1%	1,250 29.4%	1,329 (1.8%)	2,579 11.2%	1,470 17.6%	1,888 42.1%	3,358 30.2%	1,677 14.1%
	297 (1.7%) 50 61.3% 41 (24.1%) 60 (1.6%)	308 5.1% 44 7.3% 40 (16.7%) 60 3.4%	605 1.7% 94 30.6% 81 (20.6%) 120 0.8%	322 8.4% 42 (16.0%) 41 0.0% 60 0.0%	340 10.4% 30 (31.8%) 38 (5.0%) 58 (3.3%)	662 9.4% 72 (23.4%) 79 (2.5%) 118 (1.7%)	350 8.7% 34 (19.0%) 34 (17.1%) 58 (3.3%)	369 8.5% 41 36.7% 36 (5.3%) 52 (10.3%)	719 8.6% 75 4.2% 70 (11.4%) 110 (6.8%)	390 11.4% 43 26.5% 38 11.8% 51 (12.1%)	387 4.9% 34 (17.1%) 43 19.4% 53 1.9%	777 8.1% 77 2.7% 81 15.7% 104 (5.5%)
													393 0.8%
													32 (25.6%)
													50 31.6%
													35 (31.4%)
	448 0.0%	452 2.7%	900 1.4%	465 3.8%	466 3.1%	931 3.4%	476 2.4%	498 6.9%	974 4.6%	522 9.7%	517 3.8%	1,039 6.7%	510 (2.3%)
	0 n/m 0 n/m 0 n/m	0 n/m 0 n/m 0 n/m	0 n/m 0 n/m 0 n/m	115 n/m 206 n/m 52 n/m	129 n/m 327 n/m 59 n/m	244 n/m 533 n/m 111 n/m	148 28.7% 480 133.0% 86 65.4%	160 24.0% 480 46.8% 100 69.5%	308 26.2% 960 80.1% 186 67.6%	141 (4.7%) 466 (2.9%) 97 12.8%	162 1.3% 476 (0.8%) 107 7.0%	303 (1.6%) 942 (1.9%) 204 9.7%
													151 7.1%
													452 (3.0%)
													132 36.1%
	0 n/m	0 n/m	0 n/m	373 n/m	515 n/m	888 n/m	714 91.4%	740 43.7%	1,454 63.7%	704 (1.4%)	745 0.7%	1,449 (0.3%)	735 4.4%
	630 27.5% 420 45.8%	415 (19.7%) 470 46.0%	1,045 3.4% 890 45.9%	0 n/m 333 (20.7%)	0 n/m 400 (14.9%)	0 n/m 733 (17.6%)	0 n/m 421 26.4%	0 n/m 418 4.5%	0 n/m 839 14.5%	0 n/m 417 (1.0%)	0 n/m 445 6.5%	0 n/m 862 2.7%

													0 n/m
													474 13.7%
	12,564 3.6% 62 (7.5%)	12,555 3.1% 139 27.5%	25,119 3.4% 201 14.2%	12,427 (1.1%) 78 25.8%	12,923 2.9% 100 (28.1%)	25,350 0.9% 178 (11.4%)	13,235 6.5% 54 (30.8%)	12,599 (2.5%) 23 (77.0%)	25,834 1.9% 77 (56.7%)	12,787 (3.4%) 19 (64.8%)	13,123 4.2% 84 265.2%	25,910 0.3% 103 33.8%	12,764 (0.2%)
													143 n/m
	12,626 3.6% 177 60.9%	12,694 3.3% 799 316.1%	25,320 3.5% 976 223.2%	12,505 (1.0%) 294 66.1%	13,023 2.6% 290 (63.7%)	25,528 0.8% 584 (40.2%)	13,289 6.3% 513 74.5%	12,622 (3.1%) 626 115.9%	25,911 1.5% 1,139 95.0%	12,806 (3.6%) 897 74.9%	13,207 4.6% 1,295 106.9%	26,013 0.4% 2,192 92.4%	12,907 0.8%
													1,603 78.7%
	12,803 4.1%	13,493 8.2%	26,296 6.1%	12,799 (0.0%)	13,313 (1.3%)	26,112 (0.7%)	13,802 7.8%	13,248 (0.5%)	27,050 3.6%	13,703 (0.7%)	14,502 9.5%	28,205 4.3%	14,510 5.9%
	2,367 5.4% 3,295 5.1% 1,852 (6.4%)	2,365 3.7% 3,170 1.9% 2,136 15.1%	4,732 4.5% 6,465 3.5% 3,988 4.0%	2,375 0.3% 3,262 (1.0%) 1,928 4.1%	2,407 1.8% 3,583 13.0% 2,043 (4.4%)	4,782 1.1% 6,845 5.9% 3,971 (0.4%)	2,634 10.9% 3,897 19.5% 1,993 3.4%	2,407 0.0% 3,348 (6.6%) 2,321 13.6%	5,041 5.4% 7,245 5.8% 4,314 8.6%	2,684 1.9% 3,693 (5.2%) 2,135 7.1%	2,697 12.0% 3,978 18.8% 2,371 2.2%	5,381 6.7% 7,671 5.9% 4,506 4.5%	2,663 (0.8%) 4,238 14.8% 2,517 17.9%
	7,514 2.1% 0 n/m	7,671 5.8% 24 n/m	15,185 4.0% 24 n/m	7,565 0.7% (10) n/m	8,033 4.7% 29 20.8%	15,598 2.7% 19 (20.8%)	8,524 12.7% (5) 50.0%	8,076 0.5% 20 (31.0%)	16,600 6.4% 15 (21.1%)	8,512 (0.1%) (2) 60.0%	9,046 12.0% 34 70.0%	17,558 5.8% 32 113.3%	9,418 10.6% (31) n/m
	5,289 7.0% 2,013 (2.7%)	5,846 11.9% 1,937 (3.6%)	11,135 9.5% 3,950 (3.1%)	5,224 (1.2%) 1,985 (1.4%)	5,309 (9.2%) 1,989 2.7%	10,533 (5.4%) 3,974 0.6%	5,273 0.9% 2,031 2.3%	5,192 (2.2%) 2,124 6.8%	10,465 (0.6%) 4,155 4.6%	5,189 (1.6%) 2,248 10.7%	5,490 5.7% 2,193 3.2%	10,679 2.0% 4,441 6.9%	5,061 (2.5%) 2,219 (1.3%)
	3,276 14.0% 490 2.7%	3,909 21.5% 467 2.4%	7,185 18.0% 957 2.6%	3,239 (1.1%) 357 (27.1%)	3,320 (15.1%) 342 (26.8%)	6,559 (8.7%) 699 (27.0%)	3,242 0.1% 347 (2.8%)	3,068 (7.6%) 363 6.1%	6,310 (3.8%) 710 1.6%	2,941 (9.3%) 283 (18.4%)	3,297 7.5% 308 (15.2%)	6,238 (1.1%) 591 (16.8%)	2,842 (3.4%) 274 (3.2%)
	2,786 16.2% 825 8.8%	3,442 24.7% 854 12.5%	6,228 20.8% 1,679 10.7%	2,882 3.4% 862 4.5%	2,978 (13.5%) 884 3.5%	5,860 (5.9%) 1,746 4.0%	2,895 0.5% 872 1.2%	2,705 (9.2%) 896 1.4%	5,600 (4.4%) 1,768 1.3%	2,658 (8.2%) 873 0.1%	2,989 10.5% 900 0.4%	5,647 0.8% 1,773 0.3%	2,568 (3.4%) 886 1.5%
	1,961 19.6%	2,588 29.3%	4,549 25.0%	2,020 3.0%	2,094 (19.1%)	4,114 (9.6%)	2,023 0.1%	1,809 (13.6%)	3,832 (6.9%)	1,785 (11.8%)	2,089 15.5%	3,874 1.1%	1,682 (5.8%)
	(221) (317.0%)	17 (91.7%)	(204) (235.1%)	98 144.3%	93 447.1%	191 193.6%	112 14.3%	1,905 1948.4%	2,017 956.0%	0 (100.0%)	0 (100.0%)	0 (100.0%)	0 n/m
	1,740 9.7%	2,605 18.1%	4,345 14.6%	2,118 21.7%	2,187 (16.0%)	4,305 (0.9%)	2,135 0.8%	3,714 69.8%	5,849 35.9%	1,785 (16.4%)	2,089 (43.8%)	3,874 (33.8%)	1,682 (5.8%)

(i) Other fixed revenue includes payphones, customer premises equipment and narrowband.

(ii) Other sales revenue primarily includes revenue related to nbn co access to our infrastructure and miscellaneous revenue. It also includes revenue from Telstra Health and Telstra Software.

(iii) Other revenue primarily consists of Go Mobile Swap lease income (31 Dec 2017: $126m; 31 Dec 2016: nil) and rental income.

n/m = not meaningful

	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017	Telstra Corporation Limited Half-yearly comparison Half-year ended 31 December 2017
Summary Reported Half-yearly Data Selected statistical data Fixed voice Retail basic access lines in service (thousands) Wholesale basic access lines in service (thousands) Fixed voice lines in service (thousands) (i) Unconditioned local loop (ULL) services in operation (thousands) Number of local calls (millions) National long distance minutes (millions) Fixed to mobile minutes (millions) International direct minutes (millions) Average fixed voice revenue per user per month ($) Fixed data Fixed data SIOs - Retail (thousands) Broadband wholesale SIOs (thousands) Fixed data SIOs (thousands)(ii) Belong fixed data SIOs (thousands)(ii) Wholesale line spectrum site sharing (LSS) SIOs (thousands) Average fixed data revenue per user per month ($) nbnTM premise connections Bundle Connections (thousands) Data Only Connections (thousands) Voice Only Connections (thousands) Total nbnTM premise connections (thousands)(iii) Data & IP ISDN access (basic access line equivalents) (thousands) ISDN average revenue per user per month ($) IP MAN SIOs (thousands) IP WAN SIOs (thousands) Mobiles Total retail mobile SIOs (thousands)(iv) Postpaid handheld mobile SIOs (thousands) Mobile broadband (data cards) SIOs (thousands)(iv) Prepaid mobile handheld unique users (thousands) Machine to Machine (M2M) SIOs (thousands) Satellite SIOs (thousands) Total wholesale SIOs (thousands) Mobile voice telephone minutes (millions) Number of SMS sent (millions) Average postpaid handheld revenue per user (excl. MRO) ($) Average postpaid handheld revenue per user (incl. MRO) ($) Average prepaid handheld revenue per user ($) Average mobile broadband revenue per user per month ($)(iv) Average M2M revenue per user per month ($) Average satellite revenue per user per month ($) Premium pay TV Foxtel from Telstra (thousands) Labour Full time staff equivalents	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full year PCP	Half 1 PCP	Half 2 PCP	Full Year PCP	Half 1 PCP
	Dec-13 Growth	Jun-14 Growth	Jun-14 Growth	Dec-14 Growth	Jun-15 Growth	Jun-15 Growth	Dec-15 Growth	Jun-16 Growth	Jun-16 Growth	Dec-16 Growth	Jun-17 Growth	Jun-17 Growth	Dec-17 Growth
	6,356 (5.1%) 1,277 5.8%	6,245 (4.3%) 1,285 3.7%	6,245 (4.3%) 1,285 3.7%	6,104 (4.0%) 1,318 3.2%	5,981 (4.2%) 1,338 4.1%	5,981 (4.2%) 1,338 4.1%	5,852 (4.1%) 1,353 2.7%	5,710 (4.5%) 1,328 (0.7%)	5,710 (4.5%) 1,328 (0.7%)	5,549 (5.2%) 1,251 (7.5%)	5,363 (6.1%) 1,124 (15.4%)	5,363 (6.1%) 1,124 (15.4%)

													5,120 (7.7%)
													955 (23.7%)
	7,633 (3.4%)	7,530 (3.0%)	7,530 (3.0%)	7,422 (2.8%)	7,319 (2.8%)	7,319 (2.8%)	7,205 (2.9%)	7,038 (3.8%)	7,038 (3.8%)	6,800 (5.6%)	6,487 (7.8%)	6,487 (7.8%)	6,075 (10.7%)
	1,400 12.4% 1,053 (18.5%) 1,706 (17.4%) 1,241 (9.5%) 273 23.0% 44.54 (3.9%) 2,847 6.1% 777 2.1%	1,482 12.1% 938 (17.9%) 1,539 (17.6%) 1,170 (9.1%) 273 13.3% 43.42 (4.6%) 2,955 6.6% 789 2.6%	1,482 12.1% 1,991 (18.2%) 3,245 (17.5%) 2,411 (9.3%) 546 17.9% 43.94 (4.3%) 2,955 6.6% 789 2.6%	1,528 9.1% 876 (16.8%) 1,378 (19.2%) 1,112 (10.4%) 256 (6.2%) 42.73 (4.1%) 3,043 6.9% 816 5.0%	1,563 5.5% 750 (20.0%) 1,175 (23.7%) 996 (14.9%) 209 (23.4%) 41.37 (4.7%) 3,144 6.4% 841 6.6%	1,563 5.5% 1,626 (18.3%) 2,553 (21.3%) 2,108 (12.6%) 465 (14.8%) 42.05 (4.3%) 3,144 6.4% 841 6.6%	1,570 2.7% 727 (17.0%) 1,171 (15.0%) 1,016 (8.6%) 255 (0.4%) 40.64 (4.9%) 3,265 7.3% 850 4.2%	1,547 (1.0%) 624 (16.8%) 1,012 (13.9%) 905 (9.1%) 225 7.7% 38.94 (5.9%) 3,379 7.5% 840 (0.1%)	1,547 (1.0%) 1,351 (16.9%) 2,183 (14.5%) 1,921 (8.9%) 480 3.2% 39.88 (5.2%) 3,379 7.5% 840 (0.1%)	1,496 (4.7%) 553 (23.9%) 909 (22.4%) 858 (15.6%) 194 (23.9%) 38.65 (4.9%) 3,469 6.2% 784 (7.8%)	1,390 (10.1%) 453 (27.4%) 717 (29.2%) 729 (19.4%) 143 (36.4%) 38.03 (2.3%) 3,511 3.9% 683 (18.7%)	1,390 (10.1%) 1,006 (25.5%) 1,626 (25.5%) 1,587 (17.4%) 337 (29.8%) 38.46 (3.6%) 3,511 3.9% 683 (18.7%)	1,234 (17.5%)
													371 (32.9%)
													602 (33.8%)
													609 (29.0%)
													106 (45.4%)
													37.17 (3.8%)

													3,532 1.8%
													554 (29.3%)
	3,624 5.2%	3,744 5.7%	3,744 5.7%	3,859 6.5%	3,985 6.4%	3,985 6.4%	4,115 6.6%	4,219 5.9%	4,219 5.9%	4,253 3.4%	4,194 (0.6%)	4,194 (0.6%)	4,086 (3.9%)
	n/a n/m 614 (6.7%) 50.75 0.9% n/a n/m n/a n/m n/a n/m	5 n/m 589 (6.7%) 50.99 0.9% n/a n/m n/a n/m n/a n/m	5 n/m 589 (6.7%) 50.74 0.8% n/a n/m n/a n/m n/a n/m	19 m/n 569 (7.3%) 51.53 1.5% n/a n/m n/a n/m n/a n/m	37 640.0% 544 (7.6%) 51.15 0.3% n/a n/m n/a n/m n/a n/m	37 640.0% 544 (7.6%) 51.31 1.1% n/a n/m n/a n/m n/a n/m	62 226.3% 516 (9.3%) 51.60 0.1% 259 n/m 18 n/m 52 n/m	92 148.6% 478 (12.1%) 50.35 (1.6%) 405 n/m 34 n/m 61 n/m	92 148.6% 478 (12.1%) 51.04 (0.5%) 405 n/m 34 n/m 61 n/m	123 98.4% 437 (15.3%) 50.20 (2.7%) 636 145.6% 52 188.9% 106 103.8%	155 68.5% 384 (19.7%) 50.41 0.1% 952 135.1% 74 117.6% 150 145.9%	155 68.5% 384 (19.7%) 50.59 (0.9%) 952 135.1% 74 117.6% 150 145.9%	180 46.3%
													326 (25.4%)
													50.62 0.8%

													1,304 105.0%
													92 76.9%
													234 120.8%
	n/a n/m	n/a n/m	n/a n/m	n/a n/m	n/a n/m	n/a n/m	329 n/m	500 n/m	500 n/m	794 141.3%	1,176 135.2%	1,176 135.2%	1,630 105.3%
	1,265 (1.3%) 47.41 (7.9%) 32 14.3% 110 3.8% 15,811 9.6% 7,122 3.8% 3,672 10.1% 2,347 11.7% 1,086 22.3% 28 7.7% 348 419.4% 11,633 17.4% 7,475 10.4% 66.80 2.2% 58.81 (0.1%) 18.90 6.2% 29.60 (0.5%) 7.69 (11.2%) 40.43 (7.0%) 500 (1.4%) 35,807 1.8%	1,225 (4.7%) 46.79 (5.0%) 33 6.5% 110 0.9% 16,009 6.2% 7,194 2.5% 3,679 3.1% 2,446 11.3% 1,261 30.0% 30 11.1% 379 57.3% 12,194 16.1% 7,846 12.2% 66.20 0.4% 58.47 0.3% 19.79 7.3% 29.20 (2.4%) 7.60 (8.4%) 40.44 2.5% 526 5.2% 32,354 (6.7%)	1,225 (4.7%) 47.29 (5.8%) 33 6.5% 110 0.9% 16,009 6.2% 7,194 2.5% 3,679 3.1% 2,446 11.3% 1,261 30.0% 30 11.1% 379 57.3% 23,827 16.7% 15,321 11.3% 66.57 1.0% 58.70 (0.2%) 19.98 11.4% 29.59 (0.7%) 7.54 (10.9%) 39.98 (3.2%) 526 5.2% 32,354 (6.7%)	1,181 (6.6%) 47.07 (0.7%) 34 6.3% 109 (0.9%) 16,375 3.6% 7,190 1.0% 3,813 3.8% 2,490 6.1% 1,466 35.0% 30 7.1% 408 17.2% 13,240 13.8% 8,642 15.6% 70.84 6.0% 63.33 7.7% 21.50 13.8% 27.11 (8.4%) 6.72 (12.6%) 46.61 15.3% 560 12.0% 31,809 (11.2%)	1,137 (7.2%) 46.31 (1.0%) 35 6.1% 111 0.9% 16,673 4.1% 7,213 0.3% 3,868 5.1% 2,531 3.5% 1,639 30.0% 30 0.0% 465 22.7% 13,395 9.8% 9,011 14.8% 70.38 6.3% 62.92 7.6% 21.19 7.1% 26.20 (10.3%) 6.21 (18.3%) 43.88 8.5% 623 18.4% 33,679 4.1%	1,137 (7.2%) 46.70 (1.2%) 35 6.1% 111 0.9% 16,673 4.1% 7,213 0.3% 3,868 5.1% 2,531 3.5% 1,639 30.0% 30 0.0% 465 22.7% 26,635 11.8% 17,653 15.2% 70.54 6.0% 63.06 7.4% 21.32 6.7% 26.79 (9.5%) 6.49 (13.9%) 45.07 12.7% 623 18.4% 33,679 4.1%	1,102 (6.7%) 46.39 (1.4%) 37 8.8% 113 3.7% 16,908 3.3% 7,295 1.5% 3,914 2.6% 2,603 4.5% 1,806 23.2% 29 (3.3%) 478 17.2% 14,363 8.5% 9,146 5.8% 70.17 (0.9%) 62.81 (0.8%) 21.20 (1.4%) 25.78 (4.9%) 5.82 (13.4%) 43.60 (6.5%) 660 17.9% 33,639 5.8%	1,049 (7.7%) 45.14 (2.5%) 40 14.3% 112 0.9% 17,227 3.3% 7,393 2.5% 3,952 2.2% 2,614 3.3% 1,938 18.2% 29 (3.3%) 530 14.0% 14,936 11.5% 8,797 (2.4%) 68.79 (2.3%) 61.57 (2.1%) 19.89 (6.1%) 23.24 (11.3%) 6.37 2.6% 39.86 (9.2%) 751 20.5% 33,659 (0.1%)	1,049 (7.7%) 45.97 (1.6%) 40 14.3% 112 0.9% 17,227 3.3% 7,393 2.5% 3,952 2.2% 2,614 3.3% 1,938 18.2% 29 (3.3%) 530 14.0% 29,299 10.0% 17,943 1.6% 69.45 (1.5%) 62.15 (1.4%) 20.40 (4.3%) 24.52 (8.4%) 6.14 (5.4%) 41.12 (8.8%) 751 20.5% 33,659 (0.1%)	1,004 (8.9%) 45.26 (2.4%) 44 18.9% 111 (1.8%) 17,411 3.0% 7,480 2.5% 3,977 1.6% 2,616 0.5% 2,053 13.7% 31 6.9% 637 33.3% 15,257 6.2% 8,677 (5.1%) 67.88 (3.3%) 60.80 (3.2%) 21.50 1.4% 21.58 (16.3%) 5.65 (2.9%) 39.03 (10.5%) 748 13.3% 32,551 (3.2%)	973 (7.2%) 43.96 (2.6%) 47 17.5% 109 (2.7%) 17,374 0.9% 7,562 2.3% 3,930 (0.6%) 2,498 (4.4%) 2,188 12.9% 32 10.3% 744 40.4% 15,594 4.4% 8,193 (6.9%) 67.54 (1.8%) 60.62 (1.5%) 22.63 13.8% 20.15 (13.3%) 6.16 (3.3%) 37.02 (7.1%) 808 7.6% 32,293 (4.1%)	973 (7.2%) 44.47 (3.3%) 47 17.5% 109 (2.7%) 17,374 0.9% 7,562 2.3% 3,930 (0.6%) 2,498 (4.4%) 2,188 12.9% 32 10.3% 744 40.4% 30,851 5.3% 16,870 (6.0%) 67.70 (2.5%) 60.71 (2.3%) 22.29 9.3% 20.96 (14.5%) 5.90 (3.9%) 38.68 (5.9%) 808 7.6% 32,293 (4.1%)
													918 (8.6%)
													42.91 (5.2%)
													49 11.4%
													103 (7.2%)

													17,609 1.1%
													7,692 2.8%
													3,964 (0.3%)
													2,432 (7.0%)
													2,346 14.3%
													32 3.2%
													862 35.3%
													16,058 5.3%
													8,221 (5.3%)
													65.92 (2.9%)
													58.60 (3.6%)
													22.70 5.6%
													19.86 (8.0%)
													5.34 (5.5%)
													37.10 (4.9%)
													799 6.8% 31,982 (1.7%)

(i) Fixed voice includes nbn[TM] SIOs.

(ii) Fixed data includes nbn[TM] SIOs and Belong SIOs.

(iii) nbn[TM] premise connections disclosed from 1H16 onwards

AI assistant

TELSTRA GROUP LIMITED — Interim / Quarterly Report 2018

65927_rns_2018-02-14_977373f0-ffe1-4afc-bc0c-cfc74b903b56.pdf

Office of the Company Secretary

ELECTRONIC LODGEMENT

Telstra Corporation Limited - Financial results for the half-year ended 31 December 2017 – CEO/CFO Analyst Briefing Presentation and Materials

Half year Half year 2018 results 2018 results

Half year 2018 results

Disclaimer

Half year 2018 results | Headlines

Our purpose, vision and strategy

Half year 2018 results | Deliver a brilliant customer experience

Half year 2018 results | Drive value and growth from the core

Half year 2018 results | Build new growth businesses close to the core

Progress on strategic investment program

Summary

Agenda

Group results – Income Statement

Group results – total interim dividend

Income growth by product

Operating expenses

EBITDA

Product performance: Mobile

Product performance: Fixed

Product performance: Data & IP

Product performance: NAS

Product performance: Global connectivity

Foxtel

Capital position

FY18 guidance[1]

Half year Half year Half year 2018 results 2018 results 2018 results Q&A Andrew Penn Andrew Penn Chief Executive Officer Chief Executive Officer Page 29

Supporting material

Capital Management Framework

Product framework - income

Product framework - operating expenses

Operating expenses

nbn DAs and commercial works

Product performance: Media

Sports Live Pass users increased

Business unit results

ANDREW PENN – CEO

SLIDE 1 - Half Year 2018 Results

SLIDE 2 - Disclaimer

SLIDE 3 – Half Year 2018 Results – Headlines

SLIDE 4 – Half Year Results – Delivered progress against strategy

SLIDE 5 – Half Year Results – Deliver brilliant customer experiences

SLIDE 6 – Half Year 2018 results – Drive value and growth from the core

SLIDE 7 – Half Year 2018 Results – Building growth businesses close to the core

SLIDE 8 – Progress on Strategic Investment Program

SLIDE 9 – Key foundational investment - digitisation

SLIDE 10 – Key foundational investment – Networks

SLIDE 11 – Summary

WARWICK BRAY – CFO

SLIDE 12 – HALF YEAR 2018 RESULTS

SLIDE 13 - AGENDA

SLIDE 14 – GROUP RESULTS – INCOME STATEMENT

SLIDE 15 – GROUP RESULTS – TOTAL INTERIM DIVIDEND

SLIDE 16 – GROUP RESULTS – FREE CASHFLOW

SLIDE 17 – INCOME GROWTH BY PRODUCT

SLIDE 18 – OPERATING EXPENSES

SLIDE 19 – EBITDA

SLIDE 20 – PRODUCT EBITDA PERFORMANCE

SLIDE 21 – PRODUCT PERFORMANCE MOBILE

SLIDE 22 – PRODUCT PERFORMANCE FIXED

SLIDE 23 – PRODUCT PERFORMANCE DATA & IP

SLIDE 24 - PRODUCT PERFORMANCE NAS

SLIDE 25 – PRODUCT PERFORMANCE GLOBAL CONNECTIVITY

SLIDE 26 – FOXTEL

SLIDE 27 – CAPITAL POSITION

SLIDE 28 – GUIDANCE

Results of operations

Revenue

Expenses

Statement of Cash Flows

Statement of Financial Position

ARPU ($)

Workforce

Segment information from operations

Revenue by Business Segment

Product profitability - EBITDA margins %

TELSTRA GROUP LIMITED Interim / Quarterly Report 2018