TELSTRA GROUP LIMITED — Investor Presentation 2003

Nov 18, 2003

19 November 2003

The Manager Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

Telephone 03 9634 6400 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Dr Switkowski's presentation to Macquarie Equities Investor Conference 2003

This presentation is provided for information only and does not contain price sensitive information not previously released to the market.

Yours sincerely

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Douglas Gration Company Secretary

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

Dr Ziggy Switkowski Chief Executive Officer Macquarie Equities Investor Conference 2003

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Disclaimer

This presentation includes certain forward-looking statements that are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, those 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 herein. 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 and the Australian market; and 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.

Telstra – Already a Strong Performer

• Telstra has a strong ROIC, EBITDA margins and Dividend Yield $\bullet$
• 13th largest telco globally by market capitalisation $\bullet$
• Growing PSTN revenues (unlike many of our peers) $\bullet$
• Effective wholesale model $\bullet$
• Robust balance sheet $\bullet$
• Strong free cashflows $\bullet$

We can go further...

Rigorous CAPEX management $\bullet$

Telecommunications is a GDP plus Industry

Source: Australian Bureau of Statistics

Telecommunications demand expected to grow by ~4%

Slide 4

MELSON

Telstra's Market Share Remains Strong 1

Market Share Trends

Strong Growth in Consumer Packages

Consumers on Telstra packages continue to grow, with nearly 1.5m consumers multi product packages.

E JAVA

Bundling offers reduce churn

Includes Rewards (5% and 10%), Relationships (25% and 50%), Family Phones Bonus + Features-figures quoted are net of overlap between packages

VAS Has Grown Call Completion

Increasing utilisation of the network

Aiming to drive call completion towards 80%. Mitigates declining $\bullet$ local call volumes

SEUT

Wireline revenue growth continues

MELSON

•Untimed local calls

•Larger local call zones

.High market share in mobile mitigates substitution

F2M substitution is manageable

Operating expenses 2003

Operating expenses 2004

Operating Cost Reductions 01/02: \$345m Operating Cost Reductions 02/03: \$574m

Operating Cost Pressures 01/02: \$151m Operating Cost Pressures 02/03: \$387m

\$600m to \$800 m cash cost opportunity over the next 2 to 3yrs.

*Excluding asset sales, depreciation, amortisation and equity accounted losses # Other includes cable recovery, Reach and handset subsidies

Key Regulatory Settings in Place

Significant regulatory settings now in place:

• Regulated prices for core wholesale $\bullet$ services
• Safe harbour for Foxtel digital $\bullet$ investment
• IP1 investment approved by regulator $\bullet$
• NZ regulatory settings improving $\bullet$

Significant upcoming issues:

• First accounting separation reports $\bullet$
• USO/CSG review $\bullet$
• Mobile termination report
• Price caps review

Coming events – Indicative dates

New Mobile Technologies - Telstra has Options

Australia • 2.5G networks: 1xRTT and GPRS - Meets existing customer demand • Demand lead technology change • Options to build or share (ie CDMA Versus EVDO)

New Zealand: TelstraClear • Need to improve mobile offering, options $\textcolor{red}{\uparrow}$ $\uparrow$

• Build own infrastructure
• Infrastructure share

• Modest capex spend if build required

Hong Kong

• CSL to postpone launch of 3G until next year due to:
• Competitive environment
• Content and handsets need to mature.
• CSL to deploy EDGE
• Offering higher quality and reliability to simulate data usage

We are well placed to respond to evolving mobile technology

VoIP - Opportunity or Threat?

VoIP demand creates incremental revenue opportunities in the Business and Government market

We can manage the technology shift.

Avenues for Profitable Growth

Organic

• Mobiles
• Broadband
• · Directories

While effectively managing substitution of traditional products....

Acquisitive

• Focus on wireless and directories
• EPS accretive within 2 years
• Management control
• · Asian centric

Targeted approach to growth opportunities

Key Messages

Full service model Telstra has a competitive advantage, with large market shares in each product.

Scope for EPS growth in a low revenue growth environment.... Costs expected to grow less than revenues driving margin expansion.

Leverage to improved revenue growth... Any improvement in revenues combined with cost out will accelerate earnings growth.

Matching technological change with customer demand... Telstra is well placed to manage product substitution while maintaining strong returns.

Active Capital Management driving shareholder value... Priorities are to invest the core, accretive acquisitions or return capital.

Disciplined management with focus on free cash flow and shareholder returns