22 July 2004

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

Telstra unveils Future Network Evolution and Product Strategy

In accordance with the listing rules, attached is a media announcement and operational briefing for release to the market.

Yours sincerely

North Gration

Douglas Gration Company Secretary

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

Media Release

22 July 2004

237/2004

Telstra unveils Future Network Evolution and Product Strategy

Telstra today unveiled its Future Network Evolution and Product Strategy and announced its plans to aggressively exploit the growth trends in wireless, broadband and IP services.

At a wide ranging analyst briefing, group managing director for Telstra Technology, Innovation and Product (TTIP), Mr Ted Pretty, said the strategy gave effect to the Telstra Board's and CEO Ziggy Switkowski's Vision of Telstra being Australia's leading customer grade, internet protocol (IP) based. multi-service provider with the networks and products to connect Australia to the future.

The major announcements include:

the launch in the December quarter of 2004 of exciting new GSM based 2.5G mobile data services using the i-mode content delivery platform;
the forthcoming addition of new voice activated products such as Telstra Personal Assistant which will $\bullet$ enable our customers to leverage a network based personal address book:
a commitment to launch 3G WCDMA consumer services during 2005, either through a paced rollout or $\bullet$ an infrastructure sharing arrangement;
an accelerated migration to packet switched network including the rollout of the most advanced IP $\bullet$ MPLS core network as a central platform to carry voice and data traffic and support high performance business services:
confirmation of the \$50m rollout of 3G EVDO (Evolution Data Optimised) on Telstra's extensive CDMA network which, when launched later in 2004, will provide customers in major cities and selected regional centres with true wireless broadband connectivity at between 300-500kbps;
the completion of the fast-paced rollout to 1400 CDMA base stations of 1xRTT which affords high $\bullet$ speed data services across metropolitan, regional and rural areas;
a trial of Flarion services as a wireless broadband access product for fixed PC's in situations where $\bullet$ cable and fixed copper solutions are not available – for instance for in-fill services beyond the range of ADSL:
a 12-month program to extend the coverage of existing GSM and CDMA networks by adding 500 base $\bullet$ stations to the more than 7,000 base stations already in the networks;
a \$34 million program to extend existing Fibre to the Home trials to a number of new estates; $\bullet$
further enhancements to the broadband DSL network to support speeds of up to 1.5mb plus for services $\bullet$ up to 4 kms from an exchange: and
the successful deployment of the new Big Pond email platform with more than 75,000 new customers being smoothly incorporated onto the new platform since 1 July 2004.

Mr Pretty said Telstra was well advanced in its plans for the deployment in early 2005 of the most advanced soft switch technology to support the provision of the latest voice over internet protocol (VOIP) services.

He told analysts Telstra expects the volume of voice traffic within its core network carried via packet technologies including IP to increase gradually over the next three to five years as additional network capacity was added and as a means of lowering operating costs.

"While VOIP has been described as a competitive threat for Telstra, the company will respond in a measured way. We believe the maximum net revenue effect on Telstra over the next 18 to 24 months is unlikely to be material in the context of our traditional voice revenues." Mr Pretty said.

Mr Pretty said that while much work had been done over a number of years to prepare Telstra for a largely IP-based future, Telstra will also, as a priority, continue to augment and improve the reliability of the customer access network (CAN) to support basic services as well as the growth in ADSL broadband over the copper CAN.

Among the announcements today is a \$320 million plan to reduce fault levels in the CAN by systematically targeting services experiencing abnormally high fault rates. The new CAN spending, which will occur over the next two to three years, will be accommodated within Telstra's broad capex guidance.

"This program will continue the improvement in basic access and voice services while at the same time enabling the network to carry high speed DSL voice services," he said.

Telstra's commitment to research and innovation programs with increasing levels of research and development funding was also highlighted at the briefing with the announcement of two innovation centres being commissioned in Sydney and Melbourne.

The centres will be equipped to enable Telstra to showcase to customers, in partnership with key vendors, newly-developed technologies and products in a "live" environment.

"Most importantly, the innovation centres will house for periods of up to 12 to 16 weeks, cross functional teams who will work full time on fast to market and proof of concept product and service offerings." Mr Pretty said.

Mr Pretty told analysts that a rationalisation of Telstra's networks and platforms was expected to produce expense savings of \$110 million over the next two years.

"TTIP has achieved a very solid cost outcome for the 2004 financial year with encouraging levels of productivity and performance in the context of this new fiscal year," he said.

He also confirmed that Telstra, due to efficient allocation of capital, would maintain a domestic capex spend in the 2005 financial year of about \$3 billion, excluding any possible accelerated commitment to 3G investment.

Telstra Media Contact:

Patrick O'Beirne, Telstra Corporate Relations, Tel: 0407 041 836

Telstra's national media inquiry line is 13 1639 and Telstra's Media Centre is located at: www.telstra.com.au/communications/media

	Agenda		Specier
Analyst Session 1	09:00 09:20	MITTERS DESCRIPTIONS	TecPretty
	09:20 - 10:45	Maximish a Value from Existing Assets
	09:20 09:40	Products	Lyndo O'Grody
	09:40 10:00 10:00 10:20	Network HIS.	Kankussen
			Arthman
	$10:20 - 10:35$	O&A	E ranti
	10:35 10:50	Refreshments
mmannon	1050-1230	miovoing to estandone grov.
Analust Session 2	1050 11110	Exccivolse	Mitterebo a
	11:10 11:30	Mobilet	Existing Kromer
	11:30 - 11:50	Data and Online Network Evolution	Antifere
	1150-1210	Gase example: IP Networks	domissie
	12:10 12:15	Summons	epangaran
			szeletette
	$12.15 - 12/30$	O&A
			Panel
	$12:30 - 12:35$	Conclusion
	12:35 - 13:00	Lunch	Technolog

Telstra will become Australia's leading customer grade IP based multi-services provider

In simple terms what this means for customers is a absolute commitment by Telstra to provide to all existing and future customers, across all of Australia, best in class fixed, wireless and 00000000000000000

Moximizing value from existing assets

Innovaling to defend and grow

Reginalization

Know who I din/raccounter me

Telstra stide

Telstra slide

Couch to the Mily

Communicate with me effectively

Deliveraria i valuesto me

Don'i aver pur my hushtesymieres is 脚眼流

La messegnitione Tasto

Keep your promise

Leveraging growth trends in broadband, wireless and IP services Becoming the leading customer grade multi-services provider Enhancing customer experience Moving to converged IP environment Launching new fixed wireless and data services Procently monocing copital Improving operational efficiency

Telstra siide
11

	Acenda	Speaker
Analyst	Introduction	Ted Pretty
Session 1	Moximising Value from Existing Assets Products	Linda O'Gradt
	Network	Kendraatsa
	ITS.	Britannia

	O&A	Ford
	Refreshments
Analust	Innovating to defend and grow
Session 2	Fixed voice:	Siddini iso
	Mobile	Actual Active
	Data and Online Network Evolution	Amilia
	Case example: IP Networks Summary	lommon Pap Genson
		Pedilmin
	Q&A
		Panel
	Conclusion
	Lunch:	Ted Prett

	Adion	Africa	REFINE
Part	Accitessing termination	Kommynd	Chronic tail faults down 50%
Wireless e COMPANY	End-to-end monitoring of network	Compicto	SHEDISIBINGS ialeiakia Canton (1991) Privokcomu der fall (tr
Crock - - Death	Enhoneno naparak labil diagnosis Developing prodettye customer notification	Complete NSKI PARTIN	Rummod 10k fests perweek Sevingson 1927 Tarokiov
Front の前 houre	Enabling CSRs to see products available to specific customers.	Reflige our OVERIGEN 12-18 mo.	SZAN KOMPOS oven 4 Upofs. increated bis & customer sotisfordion

Server & Storetge Utilize open standards, commodity maintenance costs besee infrastructure (e.g., Linux) ADVA ENVA Stofele unit così reduced Consolidate stand-alone statage to newer briser achiere W Consolidate condications Shineri gezi geowe Ery Rationalize suppliers and HGM cost reduction accommodation Telstra siide
33

Rationalize interfaces
Marketing	Fulfilment	Assurance	an a
ERR				Reduce complexity
CRM				Improve sad-to-cad sanica
Customer core				Ennasteanin,
Service development
Network management