TELSTRA GROUP LIMITED - Investor Presentation 2011

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18 November 2011

The Manager

Company 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 08 8308 1721 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Investor Day – media release and slide presentations

In accordance with the Listing Rules, I attach a copy of the media statement and the presentations to be delivered in the morning session at Telstra’s Investor Day, for release to the market.

Yours faithfully,

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Carmel Mulhern

Company Secretary

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

MEDIA RELEASE

Sales momentum continues, guidance confirmed, digital media division created

18 November 2011 – Telstra continues to record strong sales momentum and is on track to achieve its guidance of low single digit percentage growth in total revenue and EBITDA, CEO David Thodey said today.

Speaking at Telstra’s annual update for institutional investors, Mr Thodey said that over the September 2011 quarter the company continued to record strong growth in mobile customer numbers and had also added fixed broadband customers.

“Our focus on adding customers and improving satisfaction continues to bear fruit, with strong sales momentum in the opening months of fiscal 2012. Importantly, we are adding those new customers profitably and without sacrificing average revenues per customer (ARPU),” Mr Thodey said.

Mr Thodey told investors the company was making substantial progress implementing its strategy first unveiled more than a year ago: to add customers, improve customer satisfaction, simplify the company, and target growth opportunities in Asia, digital media and network-based applications and services.

“Our strategy is unchanged and our focus remains on execution. Already our customers are reporting higher satisfaction levels as we make the business less complex and easier to deal with,” Mr Thodey said.

Telstra’s strategy has seen the entire sales workforce brought together in a single team, the introduction of clearer bill formats and simpler pricing plans, and the publication of easy-to-understand one page summaries for key products and offers.

More than five million customers have called Telstra after business hours and more than 100,000 technician appointments have been scheduled for weekends, following the introduction of the services.

As a result of these and other customer service improvements, in the year to September 2011 Telstra recorded 28% fewer incoming calls to customer call centres, 51% fewer ordering errors requiring manual intervention, 34% fewer repeat visits to fix recurring problems at customers’ homes and businesses, and 70% more self-service transactions using the company’s upgraded online portal.

These and other similar initiatives generated $622 million in productivity benefits in fiscal 2011 and are expected to deliver an even greater benefit in fiscal 2012.

Digital media division established

Telstra also today announced it will consolidate its media businesses into a single division to increase focus, drive new opportunities and better utilise the company’s many media assets.

“Telstra is a leader in online digital media with multiple assets which, including FOXTEL, earn $4 billion in annual revenues and employ approximately 4,000 people. Telstra’s digital media division will bring these assets together for the first time and enable us to implement a co-ordinated media strategy that delivers longterm shareholder value,” Mr Thodey said.

The new division, to be known as Telstra Digital Media, will be responsible for managing Telstra’s end-to-end media capabilities including Sensis, BigPond, Trading Post, IPTV, FOXTEL and other content arrangements.

“As digital media and video content continues to grow it is important that we build network infrastructure to meet this demand. We will also continue to integrate this content, making it available to our customers across multiple channels including mobiles, tablets, home entertainment systems and the internet,” Mr Thodey said.

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www.youtube.com/telstracorp

MEDIA RELEASE

The new division will be headed by Rick Ellis, an experienced media executive who will join Telstra in early 2012 after completing his role as chief executive of the New Zealand broadcast television and digital media company, Television New Zealand.

“I am delighted that Rick Ellis, a media executive with vast experience and strong networks, will be leading our media strategy. Rick has led a complex media organisation, established digital businesses and cultivated strong relationships with content generators, integrators and distributors around the world,” Mr Thodey said.

Mr Ellis will commence in January 2012. He will report directly to David Thodey and join Telstra’s leadership team. Bruce Akhurst, the CEO of Sensis, and JB Rousselot, the head of Media, will report to Mr Ellis.

Mr Thodey also said that Telstra will invest $100 million over four years to upgrade its media infrastructure. The investment will help bring to life Telstra’s digital home, and enable Telstra’s enterprise and business customers to more efficiently deliver broadcast-quality video streaming services to end-users over any device connected to the internet.

Outlook

Whilst re-affirming guidance, Mr Thodey noted there had been a shift in the mix of growth expected in fiscal 2012.

Sensis has experienced satisfactory but lower than expected take-up of digital products by SME customers. Revenues are also lower than expectations because sales completions are taking longer than expected and sales to new customers have been limited as a result. Additionally, the rate of decline in Yellow print directories has also risen significantly as market dynamics change more rapidly than expected.

These trends will put pressure on Sensis, resulting in an expectation of revenue percentage declines in the high teens for the full year, driven mostly by Yellow print directory and EBITDA margin compression.

Mr Thodey noted the Telstra Group was, however, recording better than expected results in growth businesses such as mobiles, fixed broadband and network-based applications and services.

“Our strong performance in core and growth businesses, coupled with strong mobile profitability and productivity improvements, means Telstra remains on track to meet guidance for fiscal 2012,” Mr Thodey concluded.

Media contact: Andrew Maiden (0458 487 754) Email: [email protected] www.telstra.com.au/abouttelstra/media-centre/ Reference: 352/2011 Attachment: biography of Rick Ellis

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Follow Telstra online: Blog exchange.telstra.com | www.facebook.com/telstra | www.twitter.com/telstra_news |

www.youtube.com/telstracorp

MEDIA RELEASE

Notes:

Rick Ellis is Chief Executive Officer of TVNZ, New Zealand’s leading broadcast television and digital media company, a position he has held for a total of 10 years.

Rick began his career in the IT industry in Brisbane in the late 1970s, and during the following 20 years in that industry held a number of senior leadership positions in the United Kingdom and New Zealand. He served as Chief Executive Officer of Ansett New Zealand in 1995 and subsequently moved to Melbourne as General Manager Sales and Marketing for Ansett Airlines of Australia.

In 1998 he was first appointed CEO of TVNZ and during the period 2002-2006 was Vice President and Managing Director of EDS New Zealand.

Rick holds a Bachelor of Commerce from Auckland University and is married with three adult children.

A high-resolution image of Rick is available on request.

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Follow Telstra online: Blog exchange.telstra.com |

www.facebook.com/telstra | www.twitter.com/telstra_news |

www.youtube.com/telstracorp

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BUSINESS OVERVIEW
DAVID THODEY, CHIEF EXECUTIVE OFFICER
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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DISCLAIMER

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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 Telstra’s Financial Report dated 11 August 2011 and 2011 Annual Debt Issuance Prospectus lodged with the ASX.
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.
® ™ Registered trademark and trademark of Telstra Corporation Ltd. Other trademarks are the property of their respective owners.

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TODAY’S OBJECTIVES

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PERSPECTIVE ON KEY INDUSTRY TRENDS 2. PROGRESS ON STRATEGY 3. DETAILED UPDATE ON KEY FOCUS AREAS 4. FISCAL 2012 GUIDANCE CONFIRMED

AGENDA

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|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
AGENDA
1. Business Overview
David Thodey
2. Financial and NBN Update
John Stanhope
3. Simplification Program Update
Robert Nason
4. Retail Business Update
Gordon Ballantyne
PLENARY PRESENTATIONS: 9AM – 11AM
QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM
NAS & IP
THE CONNECTED HOME
MOBILITY
BRANDING
Brendon Riley
Paul McManus
Philip Jones
Hugh Bradlow
Mike Wright
Warwick Bray
Mark Buckman|
|---|---|---|---|---|---|---|---|
|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4|PLENARY PRESENTATIONS: 9AM – 11AM|||||||
||1. Business Overview|||David Thodey||||
||2. Financial and NBN Update|||John Stanhope||||
||3. Simplification Program Update|||Robert Nason||||
||4. Retail Business Update|||Gordon||Ballantyne||
||QUESTION AND ANSWER: 11AM – 12PM
LUNCH
BREAK OUT SESSIONS: 12.30PM – 3PM|||||MOBILITY
Mike Wright
Warwick Bray||
||NAS & IP||THE CONNECTED HOME|||MOBILITY|BRANDING|
||Brendon Riley
Paul McManus
Philip Jones||Hugh Bradlow|||Mike Wright
Warwick Bray|Mark Buckman|
|||||||||

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OUR INDUSTRY IS UNDERGOING A SIGNIFICANT CHANGE
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NETWORK GROWTH
DIGITAL CONTENT 5x growth in INTERACTIONS
GROWTH
Mobile connections 300B emails
5M 5B in 2010 20B SMS
Terabytes of information 50B in 2020 7B calls
created every 48 hours TRILLION in 2030
0.2B Tweets/day
WEB SEARCHES The “ME” PERSONALISED BANDWIDTH
DEVICES
generation – DEMAND
~2B consumer is 800M 1B
Per day king… Smarthphones Terabytes over networks
or queen by 2013 by 2012
CLOUD & APPLICATIONS VIDEO CONTENT
ASIA to contribute GROWTH
35 hours of
40% OF WORLD GROWTH
INTELLIGENT YouTube
BY 2015 NETWORKS content added
every 1 minute
THIS HAS REQUIRED US TO MAKE A NUMBER OF
CHANGES…
MILESTONES
CHIEF CUSTOMER OFFICER CHIEF MARKETING OFFICER
FOCUS AREAS
BRAND LAUNCH CULTURE CHANGE
1. BUILDING SALES, SERVICE & MARKETING
CAPABILITY CUSTOMER SATISFACTION FOCUS
2. INVESTING IN CORE NETWORK CAPABILITY MOBILES – LTE, COVERAGE FIXED – IPV6, TOP HAT, HFC
DEDICATED BUSINESS UNITS (NAS & CLOUD)
3. NAS & CLOUD CAPABILITY
CLOUD INVESTMENT TELSTRA INNOVATION TEAM
4. NEW BUSINESS MODEL
APPLICATIONS AND VENTURES GROUP T-SUITE EXPANSION
5. PRODUCT INNOVATION PROJECT NEW / SIMPLIFICATION
PRODUCTIVITY & PROCESS IMPROVEMENT
6. DIGITAL MEDIA
DIGITAL BUSINESS M2M
7. ASIA INDUSTRY VERTICAL SOLUTIONS
IPTV (T-BOX) FOXTEL
DEDICATED BUSINESS UNIT CHINA, REACH, CSL
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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OUR PRIORITIES REMAIN UNCHANGED AND WE ARE MAKING PROGRESS

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IMPROVE CUSTOMER SATISFACTION
RETAIN AND GROW CUSTOMER NUMBERS
SIMPLIFY THE BUSINESS
BUILD NEW GROWTH BUSINESSES

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…AND WE ARE PREPARING FOR AN NBN WORLD • Intelligent network capability build • • • NBN content and applications THE NBN DOES NOT CHANGE OUR STRATEGY – WE WILL CONTINUE TO DIFFERENTIATE

DIFFERENTIATION

Intelligent network capability build
New tariff structures
New product portfolio
NBN content and applications

THE NBN DOES NOT CHANGE OUR STRATEGY – WE WILL CONTINUE TO DIFFERENTIATE

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OUR NAS STRATEGY IS DELIVERING RESULTS

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Discreet
Products
1. Dedicated NAS & Cloud Delivery
Industry
Service Desk Converged Solutions Packaged Products
Multimedia Media
Contact Centre
IaaS Telephony Video Professional Services Health Offerings Bundled 2. Strong offering portfolio
SaaS Conferencing Video Education
PaaS
Unified
Networking IP Unified Security Services Intelligence Network Contextual Networking Federated Clouds UC&C as a Service Service Delivery Finance Government Integrated Services 3. Capability & resourcing
4. Strong customer base
Secure Intelligent Networks Cloud Unified Managed Industry Integrated
Services Communications Services Solutions Solutions
•
FY11 REVENUES +11% TO $1.1B
• STRONG PIPELINE OF OPPORTUNITIES FOR FY12
WE ARE BUILDING GREATER VALUE IN ASIA
LEVERAGING OUR INTERNATIONAL ASSETS AND CAPABILITIES 1. Extend our Asia IP network and
NAS/Cloud capabilities (Reach)
Stanley Satellite
Earth Station, London New York/
Hong Kong Seoul (Korea) San Jose New Jersey
China Tokyo (Japan) 2. Continue to leverage mobile
India Hong Kong Los Angeles assets (CSL)
Thailand Philippines
Malaysia
Singapore Indonesia
3. Extract value from China Digital
Media assets
Perth Auckland
Sydney (New Zealand)
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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WE HAVE ESTABLISHED A NEW DIGITAL MEDIA BUSINESS UNIT

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EXISTING PORTFOLIO OF ASSETS AND PARTNERS NEW DIGITAL MEDIA BUSINESS UNIT
TELSTRA
DIGITAL
MEDIA
CASH MANAGEMENT WILL BE KEY TO OUR FUTURE
DIVIDENDS IMPORTANT FOR MANY SHAREHOLDERS, STRONG BOARD COMMITMENT
DEBT WE ARE WITHIN FINANCIAL PARAMETERS
CAPITAL RETURNS TO BE CONSIDERED POST NBN DEAL
INVESTMENTS PRUDENT ASSESSMENT OF VALUE ACCRETIVE ORGANIC & MODEST INORGANIC OPPORTUNITIES
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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SUMMARY

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OUR STRATEGIES ARE WORKING WE ARE WELL PLACED AND WE WILL BE NBN READY WE CAN CONTINUE TO DIFFERENTIATE

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FINANCIAL UPDATE
JOHN STANHOPE, CFO
NBN UPDATE - KEY CONDITIONS PRECEDENT
TELSTRA RULING
ATO TAX RULINGS �
RECEIVED
TELSTRA SHAREHOLDER APPROVAL AGM VOTE �
ACCC ACCEPTANCE OF STRUCTURAL SEPARATION REVISED SSU TO
UNDERTAKING AND APPROVAL OF MIGRATION PLAN BE SUBMITTED
2
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
REPORTING THE FINANCIAL IMPACT OF NBN
6 months ended
Dec 10
June 11
Physicals ('000s)
Basic access (PSTN) lines
8,533
8,370
o/w WLR lines
1,235
1,212
ULL lines
914
1,001
ISDN lines
1,318
1,316
Lines disconnected toNBN
0
0
Telstra retail lines through NBN
0
0
Financial ($m)
Infrastructure revenues (sales revenue)
0
0
Disconnect ion revenues (other income)
0
0
NBN access costs
0
0
Remediation Costs
0
0
Copper network maintenance
TBC
TBC
3|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
REPORTING THE FINANCIAL IMPACT OF NBN
6 months ended
Dec 10
June 11
Physicals ('000s)
Basic access (PSTN) lines
8,533
8,370
o/w WLR lines
1,235
1,212
ULL lines
914
1,001
ISDN lines
1,318
1,316
Lines disconnected toNBN
0
0
Telstra retail lines through NBN
0
0
Financial ($m)
Infrastructure revenues (sales revenue)
0
0
Disconnect ion revenues (other income)
0
0
NBN access costs
0
0
Remediation Costs
0
0
Copper network maintenance
TBC
TBC
3|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
REPORTING THE FINANCIAL IMPACT OF NBN
6 months ended
Dec 10
June 11
Physicals ('000s)
Basic access (PSTN) lines
8,533
8,370
o/w WLR lines
1,235
1,212
ULL lines
914
1,001
ISDN lines
1,318
1,316
Lines disconnected toNBN
0
0
Telstra retail lines through NBN
0
0
Financial ($m)
Infrastructure revenues (sales revenue)
0
0
Disconnect ion revenues (other income)
0
0
NBN access costs
0
0
Remediation Costs
0
0
Copper network maintenance
TBC
TBC
3|
|---|---|---|
|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
REPORTING THE FINANCIAL IMPACT OF NBN
6 months ended
Dec 10
June 11
Physicals ('000s)
Basic access (PSTN) lines
8,533
8,370
o/w WLR lines
1,235
1,212
ULL lines
914
1,001
ISDN lines
1,318
1,316
Lines disconnected toNBN
0
0
Telstra retail lines through NBN
0
0
Financial ($m)
Infrastructure revenues (sales revenue)
0
0
Disconnect ion revenues (other income)
0
0
NBN access costs
0
0
Remediation Costs
0
0
Copper network maintenance
TBC
TBC
3|||
||||
|TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
M2M – ANOTHER GROWTH ENGINE FOR MOBILES
Note: FY11 Mobile SIO growth of 1.7m included 100k M2M adds
FY11 REPORTED
� High margin
� Low ARPU
4
POSTPAID HANDHELD
6.1m SIOs
$64 ARPU
M2M
0.6m SIOs
$10 ARPU
M2M
0.3m SIOs
M2M
0.3m SIOs
MBB
2.3m SIOs
$41 ARPU
POSTPAID HANDHELD
6.5m SIOs
$61 ARPU
MOBILE BROADBAND
2.6m SIOs
$38 ARPU|||

Telstra Corporation: [email protected]

SENSIS TRANSITION

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PROGRESS ON DIGITAL STRATEGY

Market’s shift to digital marketing occurring faster than expected
Good take up from existing customers, limited sales to new customers as sales completion taking longer than expected
Rate of decline in Yellow Print has risen significantly
One off digital sales and production costs higher than expected in FY12
End user demand for Yellow products remains solid
• Cost-out programme accelerated – limited impact in FY12, more in FY13 EXPECT HIGH TEENS REVENUE DECLINE AND MARGIN COMPRESSION IN FY12

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5
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GUIDANCE AND H1 PROFILE

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Measure FY11 Reported FY12 Guidance
Total Revenue $25.09bn Low single-digit growth
EBITDA $10.15bn Low single-digit growth
Capex 14% of sales
Free cashflow $4.5 - $5.0 billion
Dividend 28 cps fully franked (FY12 and FY13)
Guidance assumes wholesale product price stability and excludes any further
impairments to investments and proceeds on the sale of businesses
Dividend subject to the Board’s normal approval process for dividend declaration
and no unexpected material events.
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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FY12 PROFILE H1 V H2 • Smoother profile than FY11 • Revenue and EBITDA growth in H1 with slight margin expansion
• Mix change with improving telco product contributions offset by accelerated revenue decline from Sensis

Telstra Corporation: [email protected]

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SIMPLIFICATION AND CUSTOMER
SERVICE PROGRAM UPDATE
ROBERT NASON, GMD PROJECT NEW AND CUSTOMER
EXPERIENCE
PROJECT NEW OBJECTIVES
Theme Objectives
• Fast, lean and competitive operating model and culture
Simplify • Value propositions clear and simple to communicate
• Processes streamlined to reduce time-to-market by 30%
• Best customer satisfaction rating compared to rest of market
Serve • Channel mix transitioned to 35% online / self help transactions
• Further sustained reduction of TIO complaints
Save • Significant cost benefits will emerge
Source: 2010 Investor Day Presentation, Robert Nason 2
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

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PROJECT NEW SCOPE
End-to-End Customer
Process Improvement
A New
New Lean
Sales & Service Customer
Operating
Channel Enhancements Focused
Model
Culture
Pricing Simplification
Third Party Spend & Productivity Improvement Program
Source: 2010 Investor Day Presentation, Robert Nason 3
STATUS OF PROGRAM OUTCOMES
Operating Model 70% 80%
Process and System Improvements 40% 70%
Online Presence 30% 70%
Pricing Simplification 50% 75%
Productivity 60% 100%
Culture Change 30% 100%
0% 100%
Benefits implemented Benefits identified Total opportunity
4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

OPERATING MODEL CREATING A SIMPLER, CUSTOMER CENTRIC ORGANISATION

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Creation of a single Retail customer business unit
Marketing, channel management, pricing, innovation, technology, communications and shared services functions streamlined with clear accountabilities

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Over 25,000 job roles changed
Executive head count reduction by ~13%

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OPERATING MODEL BETTER LEVERAGING OUR PARTNERS

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Rationalised the number of vendors
Optimised strategic relationships with third parties
Working cooperatively to achieve ongoing productivity improvements
Better engaging with our partners through training and other collaborative activities

Telstra Corporation: [email protected]

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PROCESS AND SYSTEM IMPROVEMENTS
7
PROCESS AND SYSTEM IMPROVEMENTS
8
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

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PROCESS AND SYSTEM IMPROVEMENTS
TIO Complaints
~50%
9
PROCESS AND SYSTEM IMPROVEMENTS
% of Field Revisits
~34%
10
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

ONLINE PRESENCE

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11
ONLINE PRESENCE
Homepage
Consumer Services
Online Shop
Facebook and Twitter Services
CrowdSupport
Mobile
website
12
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

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PRICING SIMPLIFICATION DELIVERING GREATER VALUE FOR OUR CUSTOMERS

We have refreshed our mobile wireless cap, business and account managed plans
We have improved our Fixed and Bundles offer
Data allowances have increased at no extra cost for some plans

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� Key nuisance fees and charges have been removed
13
PRICING SIMPLIFICATION
ENHANCING THE PURCHASING AND BILLING EXPERIENCE
Improved Brochures New My Offer Summaries Simplified Bill Format
+ +
14
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

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PRODUCTIVITY

$622M OF PRODUCTIVITY BENEFITS DELIVERED IN FY11

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+$160m -$622m
+$96m
+$231m
+$277m
+$823m
$15,154m
$14,184m +$93m +$53m -$141m
+6.8%
New
STI Natural Impairments DVCs Price Business Redundancy Programme costs Productivity
FY10 disasters & Other Growth & other Benefits FY11
OPEX OPEX
REPORTED One-offs Growth Productivity REPORTED
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 Source: FY11 End of Year Results CEO/CFO Presentation 15
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CULTURE CHANGE DRIVEN BY THE ‘OUR CUSTOMER CONNECTION’ PROGRAM

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TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4 Source: Visualisation created during an OCC session to capture outcomes for participants
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54 OCC sessions have been held engaging over 5,400 people leaders:
23 sessions in Melbourne (2,200+ people)
16 sessions in Sydney (1,500+ people)
6 sessions in the Philippines (800+ people)
9 sessions held with our industry partners (900+ people)

Telstra Corporation: [email protected]

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FOCUS OF THE SIMPLIFICATION AND CUSTOMER
SERVICE PROGRAM GOING FORWARD
EMBEDDING CONTINUOUS IMPROVEMENT
IMPLEMENTING CULTURE CHANGE
SECOND WAVE OF PRODUCTIVITY IMPROVEMENT
17
EMBEDDING CONTINUOUS IMPROVEMENT
Process Owner Framework
PREPARE SERVE SUPPORT
� Product Management � Order to Activate � Corporate Planning
� Product Development � Assurance � Financial and Risk Management
� Pricing � Billing � People Management
� Promotions and Advertising � Explore � Communications Management
� IT and Network Management � Customer Management � Enterprise Effectiveness
� Procurement and Partner
Management
� Implementation underway � Implementation by end of FY12 18
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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Telstra Corporation: [email protected]

IMPLEMENTING CULTURE CHANGE

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Net Promoter Score system implementation
Sales and service training

� Changing the way we work 19 SECOND WAVE OF PRODUCTIVITY IMPROVEMENT � Focus on capital as well as OPEX � Broader scope � Deeper set of changes 20

Telstra Corporation: [email protected]

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GORDON BALLANTYNE
CHIEF CUSTOMER OFFICER
TELSTRA TEMPLATE 4X3 BLUE BETA | TELPPTV4
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CUSTOMER SATISFACTION
IMPROVED MOMENTUM
TELSTRA OVERALL CUSTOMER SATISFACTION
��
JUN 10 OCT 10 FEB 11 JUN 11 OCT 11
2
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Telstra Corporation: [email protected]

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RECAP - LAST YEAR’S KEY BATTLEGROUNDS
�
�
�
3
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CORE PRODUCT MOMENTUM HAS CARRIED INTO 2012…
RETAIL MOBILE QUARTERLY SIO GROWTH RETAIL FIXED BROADBAND
QUARTERLY SIO GROWTH

POSTPAID HANDHELD ARPU CONSUMER BUNDLES GROWTH
4
June Q11 excludes the removal of 65k non-revenue generating services from the base
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Telstra Corporation: [email protected]

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ORGANISING TO WIN
CHIEF CUSTOMER
OFFICER
TELSTRA TELSTRA
TELSTRA
CONSUMER & ENTERPRISE & TELSTRA CLEAR
BUSINESS
COUNTRY WIDE GOVERNMENT
STRATEGY & OPERATIONS
CUSTOMER SERVICE
5
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DRIVING VALUE FROM THE DOMESTIC CORE
OUR KEY GROWTH AREAS REMAIN UNCHANGED
GROW MOBILE
BUNDLES
NAS
6
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Telstra Corporation: [email protected]

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DRIVING VALUE FROM THE DOMESTIC CORE
��
��
7
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STILL A LONG WAY TO GO WE HAVE MORE DETRACTORS THAN PROMOTERS

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Illustrative purposes only 8
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Telstra Corporation: [email protected]

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OUR AMBITION

TO CHANGE THE WAY OUR CUSTOMERS TALK ABOUT TELSTRA

Telstra Corporation: [email protected]

AI assistant

TELSTRA GROUP LIMITED Investor Presentation 2011

65927_rns_2011-11-17_87876eaa-4ae1-489c-b519-69116175bc6a.pdf

Office of the Company Secretary

ELECTRONIC LODGEMENT

Investor Day – media release and slide presentations

MEDIA RELEASE

Sales momentum continues, guidance confirmed, digital media division created

Digital media division established

MEDIA RELEASE

Outlook

MEDIA RELEASE

Notes:

DISCLAIMER

TODAY’S OBJECTIVES

AGENDA

OUR PRIORITIES REMAIN UNCHANGED AND WE ARE MAKING PROGRESS

DIFFERENTIATION

OUR NAS STRATEGY IS DELIVERING RESULTS

WE HAVE ESTABLISHED A NEW DIGITAL MEDIA BUSINESS UNIT

SUMMARY

SENSIS TRANSITION

PROGRESS ON DIGITAL STRATEGY

GUIDANCE AND H1 PROFILE

ONLINE PRESENCE

PRODUCTIVITY

IMPLEMENTING CULTURE CHANGE

OUR AMBITION

AI assistant

TELSTRA GROUP LIMITED — Investor Presentation 2011

65927_rns_2011-11-17_87876eaa-4ae1-489c-b519-69116175bc6a.pdf

Office of the Company Secretary

ELECTRONIC LODGEMENT

Investor Day – media release and slide presentations

MEDIA RELEASE

Sales momentum continues, guidance confirmed, digital media division created

Digital media division established

MEDIA RELEASE

Outlook

MEDIA RELEASE

Notes:

DISCLAIMER

TODAY’S OBJECTIVES

AGENDA

OUR PRIORITIES REMAIN UNCHANGED AND WE ARE MAKING PROGRESS

DIFFERENTIATION

OUR NAS STRATEGY IS DELIVERING RESULTS

WE HAVE ESTABLISHED A NEW DIGITAL MEDIA BUSINESS UNIT

SUMMARY

SENSIS TRANSITION

PROGRESS ON DIGITAL STRATEGY

GUIDANCE AND H1 PROFILE

ONLINE PRESENCE

PRODUCTIVITY

IMPLEMENTING CULTURE CHANGE

OUR AMBITION

More from TELSTRA GROUP LIMITED

TELSTRA GROUP LIMITED Investor Presentation 2011