TELSTRA GROUP LIMITED — M&A Activity 2005

Dec 8, 2005

9 December 2005

The Manager

Company Announcements Office Australian Stock Exchange 4^th Floor, 20 Bridge Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

Telephone 03 9634 6400 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Hong Kong CSL and New World PCS to merge

In accordance with the listing rules, I attach a copy of a media announcement for release to the market.

Yours sincerely

North brake

Douglas Gration Company Secretary

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

Media Release

9 December 2005

346/2005

Hong Kong CSL and New World PCS to merge

Telstra announced today that Hong Kong CSL Limited and New World PCS Limited will be merged on a debt free basis, giving Telstra first mover advantage in the HK market and significant cost savings.

The merged company will become HK's largest mobile business with 34 per cent market share. creating scale benefits.

Telstra will own 76.4 per cent of the merged company and receive HK\$244 million in cash (approx. A\$42m), whilst New World Mobile Holdings (NWMHL) will own 23.6 per cent.

Telstra can nominate four directors to the Board of the merged company (including the Chairman) and New World, two directors.

CSL's CEO, Hubert Ng, will be the CEO of the merged business – to be called CSL New World Mobility Limited.

All of CSL's and New World's brands will be retained as they target different market segments.

Telstra and NWMHL believe that they can achieve significant synergies and cost savings through rationalisation of networks. IT systems and corporate support.

The merger is not expected to result in any gain or loss in relation to Telstra's holding in CSL. Consequently no change will be made to Telstra's existing carrying value of CSL.

Telstra's CEO, Mr Sol Trujillo, said, "The merged business will have first mover advantage in the long-awaited consolidation of the HK cellular market.

"A merged CSL and New World is well placed to provide leading services in Hong Kong's dynamic, competitive market.

"The two customer bases are complementary - CSL predominantly operates in the higher value customers, while New World has achieved 17 per cent market share by targeting value-conscious subscribers through a low cost business model," he said.

Telstra CFO, Mr John Stanhope, said, "CSL is already Hong Kong's No.1 mobile operator in terms of revenue per customer – this merger will also make it No.1 in terms of revenue. profitability and subscriber numbers market. This merger is expected to deliver over A\$400m of cost savings.

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Telstra's national media inquiry line is 1300 769 780 and the Telstra Media Centre is located at: www.telstra.com.au/abouttelstra/media

Media Release

"The merger meets Telstra's acquisition criteria. It is cash flow positive and EPS accretive from year one; and its ROIC exceeds consensus WACC in year two," he said.

This merger is subject to the approval of the NWMHL shareholders and consent of the Telecommunications Authority of Hong Kong with completion of the transaction targeted for 31 March 2006.

Media contact: Graeme Salt $+61$ 2 9298 5256