SECURITIES AND EXCHANGE COMMISSION

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

Date: For the period ending 31 October 2004

TELSTRA CORPORATION LIMITED

242 Exhibition Street
Melbourne Victoria 3000
Australia

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

INDEX

Media Release

Telstra Announces Domestic Debt Roadshow

Telstra today announced plans to conduct domestic debt investor roadshows in Melbourne, Sydney and Brisbane from 3-5 November, 2004, in preparation for a possible $A500 million 8 -11 year long-term borrowing.

The roadshow presentations will be conducted by Telstra’s Chief Financial Officer, Mr John Stanhope, and Telstra’s Corporate Treasurer, Mr Cliff Davis and target key institutional investors.

Mr Stanhope said the proposed borrowing would mark Telstra’s return to the $A market after an absence of two to three years and follows a successful EUR 500m 10 year issue completed in July.

“The domestic market is an important element of Telstra’s globally diversified funding strategy and is becoming increasingly competitive with the Euro and $US markets in terms of price, maturity and liquidity,” Mr Stanhope said.

Mr Stanhope said the increasing integration of the domestic and offshore $A debt capital markets had improved market depth and resilience and enhanced the attractiveness of the $A as a core funding currency.

Mr Stanhope added that a new long term borrowing would extend Telstra’s well-established yield curve and demonstrated the company’s commitment and confidence in the $A market as a reliable and efficient funding source.

The proceeds of the issue would be used for general corporate funding purposes and to refinance maturing long-term debt.

Telstra has appointed Westpac Institutional Bank, National Australia Bank, RBC Capital Markets and TD Securities to arrange the roadshows and manage the proposed issue.

Telstra is rated A+ (S&P), A1 (Moody’s) and A+ (Fitch) and all ratings have a stable outlook.

Telstra Media Contact
Angela Martinkus
Telstra Media Relations
Tel: 039634 5611
Mobile: 0408 997 420

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

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Key information about the Buy-Back

This booklet provides details of the $750 million share buy-back recently announced by Telstra. The booklet has been prepared to assist you in making an informed decision whether or not to participate in the off-market share buy-back.

The Buy-Back is an opportunity for you to offer to sell some or all of your Shares to Telstra. If you do not wish to participate in the Buy-Back, you do not need to take any action.

Key details

Important dates

October 2004

Telstra does not anticipate changing any of these dates. However, it reserves the right to vary them (including, without limitation, the Closing Date and the Buy-Back Date), without notifying you.

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Telstra Buy-Back Tender 2004

Key points

Telstra Buy-Back enquiry line

If you have any questions after reading this document, please call the Telstra Buy-Back enquiry line.

Telstra Corporation Limited 

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Key information about the Buy-Back

Main differences to Telstra’s 2003 buy-back

What to do?

It is your choice whether you participate in the Buy-Back or not. To ensure that you make an informed decision, you should read through this booklet and consider the details carefully.

þ If you DO choose to participate

x If you DO NOT choose to participate

There is a glossary at the back of this booklet (section 6.1) that identifies important definitions used in this document. Examples of completed Tender Forms are also provided in section 5 of this booklet to assist you in completing your own Tender Form.

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Telstra Buy-Back Tender 2004

Contents

Telstra Corporation Limited

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Chairman’s Letter

Donald McGauchie AO Chairman

Dear shareholder,

On behalf of the Board of Directors, I am pleased to present the next step in Telstra’s ongoing capital management program – an off-market share buy-back of around $750 million.

We announced in June this year that Telstra expects to return $1.5 billion to shareholders each year for the next three years, through special dividends and/or share buy-backs, subject to maintaining the Board’s target financial parameters.

In August, we announced the intention to pay a special dividend of six cents per share, fully franked, to shareholders with the interim ordinary dividend in fiscal 2005, and to undertake an off-market share buy-back of around $750 million.

This booklet has been prepared to assist you in making an informed decision on whether or not to participate in the Buy-Back.

The decision to return capital to shareholders is founded on our strong financial settings and confidence in our future performance. Future cash flows from operations are expected to remain robust.

The high level of interest in our 2003 buy-back, and overall shareholder feedback was a key consideration in deciding on this year’s capital management program. Last year we returned approximately $1.0 billion to shareholders through our first off-market share buy-back. A total of 238.2 million shares were bought back at $4.20 per share, representing approximately 3.7 per cent of Telstra’s non-Commonwealth owned issued capital. Strong shareholder support for the initiative meant that the 2003 buy-back was two and a half times oversubscribed at the $4.20 price, resulting in a scale back of approximately 65.6 per cent. The Commonwealth did not participate in the 2003 buy-back.

This year’s Buy-Back is similar to our 2003 buy-back. However, there are some differences that you should be aware of, including:

Full details of the Buy-Back are explained in this booklet. As with Telstra’s 2003 buy-back, for shareholders who sell their shares under the Buy-Back, the Buy-Back price includes a fully franked dividend. For shareholders who decide to retain their shares, the Buy-Back is expected to increase earnings per share.

You do not need to take any action if you do not wish to participate in the Buy-Back. However, I encourage you to read through this booklet and consider the details carefully, so that you can make an informed decision. If you have any doubt as to the action you should take, then I recommend you consult a professional adviser. Yours sincerely

Donald McGauchie AO
Chairman

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Telstra Buy-Back Tender 2004

Eligibility to participate and the process

Eligibility to participate

You are eligible to participate in the Buy-Back if Shares are registered in your name on Friday,8 October 2004 and, in accordance with the ASTC Settlement Rules, the Shares confer an entitlement to receive this Invitation.

All shareholders on the Australian register

Issuer Sponsored Holders

If you wish to participate in the Buy-Back, please complete and sign the enclosed orange Tender Form and send it to:

so that it is received no later than 7pm Melbourne time on Friday, 12 November 2004.

If you have any questions about completion and processing of your Tender Form, please contact the Telstra Buy-Back enquiry line on 1300 305 385 within Australia or +61 (3) 9615 9199 if you are calling from outside Australia. Otherwise, please contact a professional adviser.

CHESS Holders

If you have a CHESS Holding and you wish to participate in the Buy-Back, contact your controlling participant (normally your broker) in sufficient time for them to process your Tender no later than 7pm Melbourne time on Friday, 12 November 2004. The name of your controlling participant as at Friday, 8 October 2004 is printed on the top right of the enclosed red Tender Form. You should check with your controlling participant if they require you to return the Tender Form enclosed with this booklet to them. Do not send your red Tender Form to the Telstra Share Registry.

All shareholders on the New Zealand register

If you hold Shares on the New Zealand register of Telstra, you should refer to section 1.22 for details on how to submit your Tender.

Telstra Corporation Limited

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Telstra Buy-Back Tender 2004

This Invitation does not constitute or give rise to a legally binding offer capable of your acceptance. If you tender your Shares in the Buy-Back, you make a formal offer to sell those Shares on the terms and conditions set out in the Buy-Back Documents. If Telstra accepts your Tender, a Buy-Back Contract is formed and your tendered Shares will be sold to Telstra on those terms and conditions.

1.1 What is a buy-back?

A buy-back occurs where a company buys back its own shares. The shares bought back are cancelled, reducing the number of shares the company has on issue.

1.2 Why is Telstra implementing another buy-back?

Telstra has decided to implement another buy-back because it is expected to provide value to remaining shareholders through enhancements to earnings per share and return on equity and it will enable Telstra to maintain a more efficient capital structure.

The Buy-Back is being undertaken as part of the Board’s program of capital management announced on 21 June 2004 and reflects Telstra’s sound financial settings. Telstra’s strong cash flows and balance sheet provide the company flexibility in pursuing new capital investments and bolt-on acquisitions whilst increasing returns to shareholders through capital management initiatives. The Telstra Board believes that the Buy-Back has benefits for all shareholders, whether or not they participate in it.

1.3 What are the advantages of a tender process?

Telstra is conducting the Buy-Back by way of a tender process.

The advantages of the tender process include the following:

Further details of the tender process are set out in sections 1.9 – 1.18.

1.4 Am I entitled to tender Shares in the Buy-Back?

You are entitled to tender Shares which are registered in your name on Friday, 8 October 2004 and which, in accordance with the ASTC Settlement Rules, confer an entitlement to participate in the Buy-Back. Shares acquired on the ASX on or after Friday, 1 October 2004 do not confer an entitlement to participate in the Buy-Back.

The maximum number of Shares you are entitled to tender in the Buy-Back is set out on the personalised Tender Form enclosed with this booklet. If you hold TESOP 97 Shares or TESOP 99 Shares on Friday, 8 October 2004 and repay your relevant TESOP Loan by 5pm Friday, 5 November 2004, then the maximum number of Shares you are entitled to tender in the Buy-Back may be higher (see section 1.5).

1.5 Am I entitled to tender TESOP Shares in the Buy-Back?

If you are a current or former employee of the Telstra Group and you hold TESOP 97 Shares or TESOP 99 Shares, you are entitled to participate in the Buy-Back in respect of those Shares if you:

For further information on participation in the Buy-Back in respect of your TESOP Shares, please refer to the TESOP Participation Letter sent to you with this booklet.

Telstra Corporation Limited

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1. Details of the Buy-Back and tender process

If you have not yet received a TESOP Participation Letter and you are interested in participating in the Buy-Back, or if you have any other queries about tendering your TESOP Shares, please contact the TESOP enquiry line on 1300 303 199 (within Australia) and + 61 (3) 9615 9889 (outside Australia).

1.6 Do I have to tender my Shares?

Participation in the Buy-Back is entirely at your discretion. If you do not wish to participate, you do not have to do anything and the number of Shares you hold will not change as a result of the Buy-Back.

1.7 What does the Buy-Back mean for me if I do not participate?

If you choose not to participate, you will hold a slightly larger percentage of the total Shares in Telstra after the Buy-Back is completed. As a result, and unless you subsequently sell some of your Shares, you will receive a slightly larger share of the total amount of any dividends declared by the Telstra Board in the future. You will also benefit from any improvement in earnings per share and return on equity.

1.8 Will the Commonwealth participate in the Buy-Back?

At the time Telstra released the full details of the Buy-Back (27 September 2004), it was not clear whether the Commonwealth would participate in the Buy-Back. The Commonwealth did not participate in the 2003 Buy-Back.

1.9 What price will Telstra pay to buy back my Shares?

The Buy-Back Price will be the lowest price in the specified range of $4.05 to $4.65 at which there is sufficient shareholder demand via the tender process for Telstra to buy back the targeted $750 million worth of Shares. It could be as low as $4.05 or as high as $4.65 per Share, but it should not exceed the Capital Gains Tax Value. The top of the range is equal to and the bottom of the range represents a 12.9% discount to Telstra’s closing price of $4.65 on 24 September 2004 (the last trading day prior to announcement of full details of the Buy-Back).

You will be paid the Buy-Back Price for each of your Shares that are bought back, even if your Tender Price is below the Buy-Back Price.

The Capital Gains Tax Value is a price used by the Commissioner of Taxation to determine for capital gains tax purposes the market value of the relevant Shares when the Buy-Back occurs.The Commissioner of Taxation has indicated that for the purposes of the Buy-Back the Capital Gains Tax Value will be determined as $4.85 adjusted for movements in the S&P/ASX200 Index from the commencement of trading on 12 August 2004 to the close of trading on the day the Buy-Back closes.

Further information on the Capital Gains Tax Value is set out in section 2.

1.10 What is a Final Price Tender?

Final Price Tenders are designed to make it easier for retail shareholders to successfully participate in the Buy-Back.

If you wish to increase the likelihood that your Shares will be bought back,you can submit a ‘Final Price Tender’.If you submit a Final Price Tender,you are willing to sell your Shares at the Buy-Back Price,whatever it is determined to be under the tender process.You should understand that submitting a Final Price Tender means you will definitely sell some or all of your Shares at a price that could be anywhere in the range of $4.05 to $4.65 per Share.Final Price Tenders will only be scaled back if the total number of Shares tendered at the lowest price in the range and as Final Price Tenders is more than Telstra determines to buy back.

1.11 How will I know what the Buy-Back Price is?

Telstra will announce the Buy-Back Price to the ASX on completion of the Buy-Back, after the details of all Tenders are assessed. The proposed date of announcement is Monday, 15 November 2004. You can access the announcement from the Investor relations section of the Telstra website (www.telstra.com.au/communications/ shareholder/buyback.cfm) or from the ASX website (www.asx.com.au).

1.12 Will all the Shares I tender be bought back?

Telstra intends to buy back around $750 million worth of Shares (approximately 1.5% of issued capital, assuming a $4.05¹ Buy-Back Price).

1 $4.05 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.9 for an explanation of how the Buy-Back Price will be determined.

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Telstra Buy-Back Tender 2004

The success of your Tender will depend on your Tender Price, the size and price of Tenders lodged by other shareholders and the total number of Tenders Telstra accepts.

How will Telstra determine successful Tenders?

If you tender your Shares at a price above the Buy-Back Price, your Tender will be rejected and your Shares will not be bought back.

If you tender your Shares at or below the Buy-Back Price, or as a Final Price Tender, your Tender will be successful and your Shares tendered at or below that price or as a Final Price Tender will be bought back, subject to any scale back.

When may a scale back apply?

A scale back may apply if the total number of Shares tendered at and below the Buy-Back Price and as Final Price Tenders is more than the total number of Shares Telstra determines to buy back.

1.13 How will the scale back mechanism work?

If the Buy-Back Price is $4.05 (bottom of the tender range)

If the Buy-Back Price is $4.05 and Telstra determines that a scale back is required for successful tenders:

If the Buy-Back Price is $4.15 or higher

If the Buy-Back Price is $4.15 or higher and Telstra determines that a scale back is required for successful tenders:

When the scale back is calculated, all fractions will be rounded down to the nearest Share.

1.14 What is the Priority Allocation?

Before any scale back is applied,Telstra will buy back the first 400 Shares successfully tendered by shareholders or such lesser number of Shares determined to be the Priority Allocation as is required to ensure that Telstra is able to buy back only the number of Shares it determines to buy back.Telstra is offering the Priority Allocation to reduce the effect of any scale back on small shareholders.

1.15 What is a Priority Tender?

A Priority Tender is a Tender submitted by a shareholder who tenders all of their Shares at the Buy-Back Price,below the Buy-Back Price and/or as a Final Price Tender and who would have had a Small Holding (600 Shares or fewer) on completion of the Buy-Back as a result of the Priority Allocation and scale back. Priority Tenders will be accepted in full.However,if you become the registered holder of additional ordinary shares in Telstra after 8 October 2004,and you are the registered holder of more Shares at the Closing Date than you held on the Buy-Back record date, then your Tender will not be a Priority Tender and the scale back will apply to your Tender as it would to any other Tender.

1.16 How will a scale back affect my Tender?

The details of any scale back will be announced as soon as possible after the Closing Date. Telstra expects to make this announcement on Monday, 15 November 2004. You can access the announcement from the Investor relations section of the Telstra website (www.telstra.com.au/ communications/shareholder/buyback.cfm) or from the ASX website (www.asx.com.au).

Examples

As an illustration, it is assumed five shareholders with various size holdings each tender Shares into the Buy-Back.We assume two different scenarios, where the Buy-Back Price and the scale back are varied. Other than these two assumptions, the total holding, the Shares tendered and the Tender Price in each illustration are the same for each shareholder.

Telstra Corporation Limited

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1. Details of the Buy-Back and tender process

SCENARIO 1: $4.05 Buy-Back Price and 50% scale back (illustrative example only)

In scenario 1, we assume the Buy-Back Price is at the bottom of the range, ie $4.05 and there is a 50% scale back. Please be aware that this is an example only. You should not rely on $4.05 being the Buy-Back Price.

The outcome of each Tender would be as follows:

The outcome of each Tender is explained below, including how the scale back was applied (refer to table).

Anna tendered at prices above the Buy-Back Price so no Shares would be bought back.

Ben tendered a total of 8,000 Shares at two different prices: 1,000 Shares at $4.15 and 7,000 Shares at $4.05. The Tender submitted at $4.15 would not be successful as the Tender Price is above the Buy-Back Price. The Tender submitted at $4.05 would be successful but only 3,700 of the 7,000 Shares tendered would be bought back, as a result of the 50% scale back (see scale back table below). This is not a Priority Tender, as following the Priority Allocation and scale back, Ben would be left with more than 600 Shares.

Catherine tendered 3,000 Shares at $4.45. The Tender would not be successful as the Tender Price is above the Buy-Back Price.

David tendered 1,000 Shares as a Final Price Tender. The Tender would be successful and all 1,000 Shares would be bought back as it is a Priority Tender (see scale back table below).

Emma tendered 2,000 Shares as a Final Price Tender. As a result of the 50% scale back, Emma would have 1,200 Shares bought back. This is not a Priority Tender, as following the Priority Allocation and scale back, Emma would be left with more than 600 Shares (see scale back table below).

Scenario 1: Scale back table (illustrative example only)

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Telstra Buy-Back Tender 2004

SCENARIO 2: $4.15 Buy-Back Price and 25% scale back (illustrative example only)

In scenario 2, we assume the Buy-Back Price is $4.15 and there is a 25% scale back. Please be aware that this is an example only. You should not rely on $4.15 being the Buy-Back Price.

The outcome of each Tender would be as follows:

The outcome of each Tender is explained below, including how the scale back was applied (refer to table).

Anna tendered a total of 6,500 Shares at two different prices: 5,000 Shares at $4.35 and 1,500 Shares at $4.15. The Tender submitted at $4.35 would not be successful as the Tender Price is above the Buy-Back Price. The Tender submitted at $4.15 would be successful but only 1,225 of the 1,500 Shares tendered would be bought back, as a result of the 25% scale back (see scale back table below). This is not a Priority Tender, as Anna did not tender all of her Shares at or below the Buy-Back Price.

Ben tendered a total of 8,000 Shares at two different prices: 1,000 Shares at $4.15 and 7,000 Shares at $4.05. The Tender submitted at $4.15 would be successful and all 1,000 Shares would be bought back as it is a Priority Tender (see scale back table below). This is a Priority Tender as following the Priority Allocation and scale back, Ben would be left with less than 600 Shares. The Tender submitted at $4.05 would also be successful as the Tender Price is below the Buy-Back Price and all 7,000 Shares would be bought back at $4.15.

Catherine tendered 3,000 Shares at $4.45.The Tender would not be successful as the Tender Price is above the Buy-Back Price.

David tendered 1,000 Shares as a Final Price Tender. The Tender would be successful as the Buy-Back Price is not the lowest price in the range and all 1,000 Shares would be bought back at $4.15.

Emma tendered 2,000 Shares as a Final Price Tender. The Tender would be successful as the Buy-Back Price is not the lowest price in the range and all 2,000 Shares would be bought back at $4.15.

Scenario 2: Scale back table (illustrative example only)

Telstra Corporation Limited

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1. Details of the Buy-Back and tender process

1.17 If I hold a relatively small number of Shares,how will the scale back affect me?

Priority Allocations

If there is a scale back and the Buy-Back Price is at the bottom of the range (ie $4.05):

If there is a scale back and the Buy-Back Price is $4.15 or higher:

The Priority Allocation is 400 Shares or such lesser number of Shares as is required to ensure that Telstra is able to buy back only the number of Shares it determines to buy back.

Priority Tenders

Shareholders who tender all of their Shares at the Buy-Back Price, below the Buy-Back Price and/or as a Final Price Tender and who would have a Small Holding (600 ordinary shares or fewer) at the completion of the Buy-Back as a result of the Priority Allocation and scale back, will have all of their Shares bought back. This means that the scale back mechanism will not apply to these shareholders. However, if you become the registered holder of additional Shares after 8 October 2004 and you are the registered holder of more Shares at the Closing Date than you held on the Buy-Back record date, then your Tender will not be a Priority Tender and the scale back will apply to your Tender as it would to any other Tender.

1.18 What happens if I own 600 Shares or less under the tender process?

If you hold 600 Shares or less as at the Buy-Back record date, you may only lodge one Tender, either at one of the specified prices or as a Final Price Tender. This means that you cannot split your holding and tender different parcels of your Shares at different prices, however it doesn’t mean that you are required to tender all of your Shares.

1.19 How does the Buy-Back compare to selling my Shares on the stock market?

Depending on your individual circumstances, the Australian tax consequences for you if you successfully participate in the Buy-Back may be different than if you sold your Shares on-market through the ASX (see section 2 for more details). You need to consider carefully whether you wish to sell your Shares and if so whether you would prefer to sell the Shares through the Buy-Back or the ASX. Please refer to the tax table in section 2.6 of this booklet and the tax calculator which can be accessed at www.telstra.com.au/communications/ shareholder/buyback.cfm for examples of your potential tax consequences.

You may be able to sell your Shares for a higher price on the ASX. Telstra’s market price on the ASX may be, or may move, higher than the Buy-Back Price during or after the Tender Period. It may also vary significantly in the future. By making the Invitation and in setting the tender range, Telstra is not making any recommendation or giving any advice on the value of your Shares, or whether (or how) you should sell your Shares.

To execute a share sale on the ASX you usually need to appoint a broker and pay them brokerage. Issuer Sponsored Holders do not need to appoint a broker or pay brokerage to participate in the Buy-Back. Brokers usually do not charge CHESS Holders to process tenders in a buy-back.

If you are in any doubt as to the action you should take, please consult a professional adviser.

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1.20 What are the tax implications of selling my Shares in the Buy-Back?

The specific tax implications of selling your Shares into the Buy-Back will depend on your individual circumstances. Section 2 contains general information in relation to some of the Australian tax consequences of participating in the Buy-Back.

If you are in any doubt as to the tax implications of participating in the Buy-Back, given your own particular circumstances, please consult a professional adviser.

1.21 How have Telstra Shares performed over recent times?

The closing price of Telstra Shares on the ASX on Friday, 24 September 2004, being the last trading day before Telstra announced full details of the Buy-Back, was $4.65.

Telstra’s highest and lowest market sale prices during each of the preceding four months were as follows:

A graph indicating the Share price performance of Telstra over the period from 1 January 2003 to 24 September 2004 is set out below.

Telstra Corporation Limited

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1. Details of the Buy-Back and tender process

The effect of amending your Tenders by submitting a Withdrawal/Amendment Form will be to withdraw all of your Tenders and replace them with the Tenders detailed on that form. On the Withdrawal/Amendment Form you will need to complete the details of all of the Tenders you wish to submit as if you had not previously submitted them.

1.24 How can I obtain additional Tender Forms or a Withdrawal/Amendment Form?

All shareholders on the Australian register

If you require any replacement Tender Forms or a Withdrawal/Amendment Form, please call the Telstra Buy-Back enquiry line on 1300 305 385 within Australia or +61 (3) 9615 9199 if you are calling from outside Australia. Withdrawal/Amendment Forms are also available at www.telstra.com.au/communications/ shareholder/buyback.cfm.

All shareholders on the New Zealand register

If you require any replacement Tender Forms or a Withdrawal/Amendment Form, please call the Telstra Buy-Back enquiry line on 0800 835 7872 within New Zealand or +64 (3) 308 8887 if you are calling from outside New Zealand.

1.25 How will I be paid for Shares bought back?

Payment for Shares bought under the Buy-Back will commence from 23 November 2004. The payment method will be either direct credit or cheque, based on your dividend payment instructions as at 12 November 2004. All payments made by cheque will be made in Australian dollars. Proceeds paid by direct credit to shareholders in New Zealand dollars will be converted to New Zealand Dollars at a rate determined by Telstra on the Buy-Back Date.

Cheques and direct credit advices will be sent, at your risk, by mail addressed to you at your address as shown on the Telstra share register at 7pm on Friday, 12 November 2004.

Payments to bank accounts and dispatch of cheques will commence on Tuesday, 23 November 2004. Payments to the accounts and the dispatch of cheques to the addresses specified above will satisfy Telstra’s obligation to pay you for any Shares bought back.

1.26 Will I still receive the 2003/2004 final dividend if my Shares are bought back?

Yes. All shareholders with an entitled registered holding on 24 September 2004 will receive the 13 cents per Share fully franked final dividend, whether or not they participate in the Buy-Back.

1.27 Will I still receive the 2004/2005 special dividend if my Shares are bought back?

No. Shares bought back as a result of the Buy-Back will not be entitled to receive any dividends, where the record date for the dividend occurs after Friday, 12 November 2004. This includes the foreshadowed 2004/2005 special dividend, expected to be paid in April 2005, and any other dividends that Telstra may announce in future years.

1.28 Can I still vote at the Annual General Meeting if I tender my Shares to Telstra?

Yes. Shareholders who tender their Shares to Telstra will still be entitled to vote in respect of those Shares (in accordance with the voting rights attached to those Shares) at the Annual General Meeting on Thursday, 28 October 2004, and at any other general meeting that is held before the Closing Date.

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Telstra Buy-Back Tender 2004

1.29 Can I trade my Shares after submitting a Tender?

You should not sell or offer to sell the Shares you have tendered in the Buy-Back.

Once you have submitted a Tender, the number of Shares you have tendered will be locked and placed in a ‘subposition’ in the Telstra share register. You will not be able to successfully deal with those Shares until those Shares are released from the subposition on, or as soon as practicable after, the Buy-Back Date. For the Shares to be released from the subposition before the Buy-Back Date you must withdraw or amend your Tender in accordance with the procedures set out in this booklet.

Withdrawals or amendments made in accordance with these procedures may not take immediate effect. You should take this into consideration if you wish to sell or offer to sell any of the Shares you have tendered. If you sell or offer to sell any Shares after you submit a Tender, and at the Closing Date you do not hold at least the number of Shares you have tendered, Telstra may, in its absolute discretion, reject your Tender(s) or treat your Tender(s) as if you had tendered the number of Shares held by you at the Closing Date (see sections 4.11 and 4.13 for further detail).

Telstra intends to offer a share sale facility around the time of the interim dividend in April 2005, through which small shareholdings can be sold in an efficient manner. The price achieved under this facility may be higher or lower than the Buy-Back Price and will not include a fully franked dividend. Further details of the share sale facility will be announced in due course.

1.31 Note to shareholders located in the United States

If you are a shareholder located in the United States, you should be aware that the disclosure requirements regarding the Buy-Back are different from the requirements that would apply if the Buy-Back was for shares of a United States company. Furthermore, because most of Telstra’s directors and executive officers reside outside the United States and all or a substantial portion of the assets of these persons and a substantial portion of Telstra’s assets are located outside the United States, it may not be possible for shareholders to effect service of process within the United States upon such persons or to enforce against them judgements obtained in United States courts predicated upon the civil liability provisions of the federal securities laws of the United States.

Telstra Corporation Limited

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2. Australian tax implications for shareholders

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Telstra Buy-Back Tender 2004

Unless otherwise specified, this discussion is based on income tax legislation and administrative practice as at 27 September 2004. These laws, the interpretation of them by the courts, and administrative practice may change at any time, possibly with retrospective effect. Telstra has applied for a Class Ruling from the ATO for shareholders who participate in the Buy-Back which is expected to provide confirmation of a number of the statements contained in this summary. Whilst it is not anticipated to be the case, it is possible that the Class Ruling issued by the ATO may express a view contrary to that set out below.

Some shareholders, for example those who carry on a business in dealing with shares, may be assessed on their dealings in shares other than under the CGT provisions. The tax consequences for those shareholders may alter significantly from those discussed below.

If you decide to participate in the Buy-Back, your particular tax treatment will depend on your own circumstances. The tax table in section 2.6 provides illustrative examples of the potential tax consequences of disposing of Shares under the Buy-Back.

It is important that you seek professional tax advice to take into account your particular circumstances and the Commissioner’s views in TD2004/22,which are discussed below.

Introduction

The Buy-Back will constitute an ‘off-market’ buy-back for tax purposes. Telstra has received advice from the ATO that all of the Buy-Back Price in excess of $1.50 will be treated as a frankable distribution (which will be fully franked by Telstra).

A shareholder participating in the Buy-Back should be taken, for CGT purposes, to have disposed of their Shares when Telstra accepts the Tender. This is expected to be no later than 15 November 2004.

The ATO has recently released Taxation Determination, TD2004/22. TD2004/22 indicates the Commissioner’s view generally in relation to the basis to determine the capital proceeds on disposal of shares for capital gains tax purposes under an off-market buy-back. It seeks to determine the market value of the relevant shares when the buy-back occurs. TD2004/22 sets out the ATO’s view on an appropriate methodology to calculate this value.

Telstra does not intend to set the Buy-Back Price at a price in excess of the value which the Commissioner regards as the capital gains tax value (Capital Gains Tax Value). The method to determine the Capital Gains Tax Value is discussed below.

2.1 Taxation Determination TD2004/22

In TD2004/22, the ATO has indicated that, in its view, the market value should be determined as the volume weighted average price (VWAP) of the Shares over the last five trading days before the first announcement of the Buy-Back adjusted for the movement in the S&P/ASX200 Index from the commencement of trading on the first announcement date (Opening S&P/ASX200 Index) to the close of trading on the day the Buy-Back closes (Closing S&P/ASX200 Index).

The Commissioner of Taxation has indicated that for the purposes of the Buy-Back the Capital Gains Tax Value will be determined in accordance with the following formula:

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2.Australian tax implications for shareholders

2.2 Australian resident individual

Income Tax – Treatment of franked distribution

An Australian resident individual participating in the Buy-Back will be deemed to have received a franked distribution equal to the difference between $1.50 and the Buy-Back Price.

The shareholder will be required to include in their assessable income the amount of the franked distribution together with the franking credit on the franked distribution.

The shareholder should be entitled to a tax offset equal to the franking credit. This tax offset may reduce the total tax payable by the shareholder on their taxable income. If the tax offset exceeds the total tax payable by the shareholder on their taxable income, the shareholder may be entitled to a refund of that excess. The tax offset may not be available in certain circumstances. This is discussed in Section 2.7.

Capital Gains Tax – Disposal of Shares

A resident individual participating in the Buy-Back will be deemed for CGT purposes to have disposed of each Share for capital proceeds of $1.50 together with the amount (if any) by which the Capital Gains Tax Value exceeds the Buy-Back Price. Generally, the CGT cost base for a Share will be the amount the shareholder paid to acquire the Share together with certain incidental costs of acquisition, for example stamp duty and brokerage, and certain incidental costs of disposal.

There are specific rules to determine the cost base for Shares acquired by Telstra employees under the Telstra Employee Share Ownership Plans. Class Ruling CR 2001/28 deals with the determination of the cost base for certain Telstra employees who acquired their Shares under TESOP 97 and TESOP 99.

A capital loss for a Share disposed of under the Buy-Back will be the excess of the CGT cost base of the Share over the aggregate of capital proceeds of $1.50 and the amount (if any) by which the Capital Gains Tax Value exceeds the Buy-Back Price. No allowance for indexation is made in determining the cost base of the Share for this purpose.

The capital loss which arises under the Buy-Back may be different from the capital loss which may have arisen under an equivalent sale of the Shares on-market, even if the Shares were sold on-market for an amount equal to the Buy-Back Price. This is because the capital proceeds under the Buy-Back are the aggregate of $1.50 and the amount (if any) by which the Capital Gains Tax Value exceeds the Buy-Back Price, rather than the price at which the shareholder sold their Shares.

This also means that any capital gain which would have otherwise arisen on disposal of the Shares may be altered.

A capital loss that arises from the Buy-Back can only be used to offset capital gains made by the individual shareholder. Capital losses not used may be carried forward to be used later.

Any capital loss arising from the Buy-Back cannot be offset against the franked distribution and franking credit included in the shareholder’s assessable income from the Buy-Back.

2.3 Australian resident company

Income Tax – Treatment of franked distribution

An Australian resident company participating in the Buy-Back will be deemed to have received a franked distribution equal to the difference between $1.50 and the Buy-Back Price.

The shareholder will be required to include the franked distribution in their assessable income, together with the franking credit on the franked distribution.

The shareholder should be entitled to a tax offset equal to the franking credit. No refund will be available to the extent that the tax offset exceeds the tax payable by the shareholder. A franking credit (equal to the franking credit on the franked distribution) will also arise in the franking account of the shareholder. The tax offset may not be available in certain circumstances. This is discussed in Section 2.7.

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Telstra Buy-Back Tender 2004

Capital Gains Tax – Disposal of Shares

The Minister for Revenue and Assistant Treasurer issued a Press Release on 27 September 2002 indicating that further amendments to the imputation provisions to apply from 1 July 2002 would be introduced into Parliament as soon as practicable. It is possible that these amendments may, amongst other things, affect the CGT treatment of an Australian resident company participating in the Buy-Back. The impact of any amendments will depend upon the form of the legislation enacted.

The amendments may mean that a capital loss may only arise to the extent that the CGT cost base of the Shares exceeds the Buy-Back Price (rather than the aggregate of capital proceeds of $1.50 and the excess of the Capital Gains Tax Value over the Buy-Back Price). No allowance for indexation is made in determining the cost base for the Shares for this purpose.

If no amendments are made to the legislation,the position may be different.Accordingly,it is very important that Australian resident companies seek their own independent taxation advice before participating in the Buy-Back.

2.4 Australian complying superannuation fund

Income Tax – Treatment of franked distribution

An Australian complying superannuation fund participating in the Buy-Back will be deemed to have received a franked distribution equal to the difference between $1.50 and the Buy-Back Price.

The shareholder will be required to include in their assessable income the amount of the franked distribution, together with the franking credit on the franked distribution.

The shareholder should be entitled to a tax offset equal to the franking credit. This tax offset may reduce the total tax payable by the shareholder on their taxable income. If the tax offset exceeds the total tax payable by the shareholder on their taxable income, the shareholder may be entitled to a refund of that excess. The tax offset may not be available in certain circumstances. This is discussed in Section 2.7.

Capital Gains Tax – Disposal of Shares

An Australian complying superannuation fund participating in the Buy-Back will be deemed for CGT purposes to have disposed of each Share for capital proceeds of $1.50 together with the amount (if any) by which the Capital Gains Tax Value exceeds the Buy-Back Price. Generally, the CGT cost base for a Share will be the amount the shareholder paid to acquire the Share together with certain incidental costs of acquisition, for example stamp duty and brokerage, and certain incidental costs of disposal.

A capital loss for a Share disposed of under the Buy-Back will be the excess of the CGT cost base of the Share over the aggregate of capital proceeds of $1.50 and the amount (if any) by which the Capital Gains Tax Value exceeds the Buy-Back Price. No allowance for indexation is made in determining the cost base for the Shares for this purpose.

A capital loss that arises from the Buy-Back can only be used to offset capital gains. Capital losses not used may be carried forward to be used later.

Any capital loss arising from the Buy-Back cannot be offset against the franked distribution and franking credit included in the shareholder’s assessable income.

2.5 Non-residents

Income Tax – Treatment of franked distribution

A non-resident shareholder will not be liable to Australian withholding tax on any part of the Buy-Back Price.

Capital Gains Tax – Disposal of Shares

An Australian CGT liability should not arise for a non-resident participating in the Buy-Back unless the non-resident together with its ‘associates’ has at any time in the preceding five years held 10% or more of the issued shares of Telstra.

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2.Australian tax implications for shareholders

2.6 Tax Table

The table below provides illustrative examples of the potential tax consequences for Australian resident individuals (see columns marked ‘Individual’ ), and Australian complying superannuation funds (see column marked ‘ Superfund’ ), from disposing their Shares under the Buy-Back.

It is important to understand that the table is an example only and is based on a number of assumptions including:

In any event, the tax consequences for an individual or superfund may be different from the example because of their particular circumstances.

The column on the right of the table marked ‘Your workings’ is there to assist you, should you choose to participate in the Buy-Back. It is intended to help you calculate the anticipated income tax and capital gains tax consequences based on your assumed marginal tax rate, the assumed Buy-Back Price and the assumed Capital Gains Tax Value of $4.85.

The amounts calculated under the tax table will not necessarily reflect the actual tax consequences for you if you choose to participate in the Buy-Back.

Example: Income tax and capital gains tax consequences per Share from participating in the Buy-Back (based on an illustrative Buy-Back Price of $4.05 and an illustrative Capital Gains Tax Value of $4.85)

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Telstra Buy-Back Tender 2004

Example

Fiona earns $50,000 per annum,and she is in a tax bracket that gives her a marginal tax rate of 31.5%.Fiona participated in the first public offer of Telstra shares in 1997.She purchased 1,000 shares at $3.30 each.She is now considering whether or not to participate in Telstra’s 2004 Buy-Back.

Fiona understands that she is able to tender at any of the 7 specified prices within the tender range or as a Final Price Tender and is wanting to calculate the income tax and capital gains tax consequences for any given Buy-Back Price within the range,on a per Share basis.

The Buy-Back Price used is $4.15.The example also assumes the Capital Gains Tax Value is $4.85.

Fiona’s anticipated income tax consequences (see ‘ Fiona example’below)

Note: Numbers may differ due to rounding.

Fiona’s anticipated capital gains tax consequences (see ‘ Fiona example’above)

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2.Australian tax implications for shareholders

The Australian tax legislation includes a number of rules which may deny shareholders participating in the Buy-Back from claiming the benefit of tax offsets arising from the franked distribution component of the Buy-Back Price.

These rules are designed to, amongst other things, discourage trading in franking credits.

Where the rules apply, a shareholder may be denied the benefit of tax offsets and franking credits on the franked distribution deemed to have been received under the Buy-Back. These rules may deny the benefit of tax offsets and franking credits to shareholders generally, or because of their particular circumstances.

Telstra is seeking confirmation from the ATO in the Class Ruling that the ATO will not make a determination to deny shareholders generally the benefit of tax offsets on the franked distribution under the Buy-Back.

The particular circumstances of the shareholder will also be relevant in determining whether the rules deny the benefit of the tax offset or franking credit. For example, the period which the shareholder holds the Share and any arrangements the shareholder has in relation to the Share will be important.

Generally, resident shareholders should have regard to the operation of the holding period rule (‘the 45 day rule’ ) in relation to their participation in the Buy-Back. Shareholders who are individuals and whose total franking credit entitlement for the income year does not exceed $5,000 may not be subject to the 45 day rule.

As a result of some recent changes to the law this exemption may not be available. However, the Treasurer in a Press Release dated 27 September 2002 indicated that the Government intends to amend the law to ensure that this exemption continues to be available.

In simple terms,the 45 day rule requires a resident shareholder in certain circumstances to have held their Shares ‘ at risk’for a specified period in order to ‘ qualify’for the franking credit on the franked distribution.This would include the franked distribution of the Buy-Back Price.

The 45 day rule requires that shareholders must hold their Shares at risk for a period of 45 days (excluding the days of acquisition and disposal) within a period beginning on the day after those Shares were acquired and ending 45 days after the Shares become ex-dividend.

The 45 day rules are complex. Generally, a shareholder who is subject to the rules and has acquired all their Shares after 29 September 2004, would fail the 45 day rule in respect of the franking credit on the franked distribution component of the Buy-Back Price. This is on the basis that the determination of the Buy-Back allocations (including any scale back) occurs on 14 November 2004. In that case, shareholders whose Shares are bought back will hold their Shares at risk until 14 November 2004, upon which date the Shares will no longer be at risk. A shareholder may fail the requirements of the 45 day rule even if the shareholder acquired all their Shares on or before 29 September 2004. This may arise where the shareholder has entered into other arrangements regarding the Shares. For example, granting an option to another person to acquire their Shares.

The 45 day rule also operates on a last-in-first-out basis so that a shareholder will be deemed to have disposed of under the Buy-Back their most recently acquired Shares for the purpose of applying the 45 day rule. A shareholder is only entitled to tender Shares which are registered in the shareholder’s name on the Buy-Back record date (ie. 8 October 2004). Shares not registered in the shareholder’s name at that time do not confer an entitlement to participate in the Buy-Back. Shares acquired on the ASX on or after 1 October 2004 will not confer an entitlement to participate in the Buy-Back.

Generally, if the most recently acquired Shares did not confer an entitlement to participate in the Buy-Back, those Shares would not be taken to have been disposed of under the Buy-Back by participating shareholders for the purposes of the 45 day rule. This means that Shares you acquire on the ASX on or after 1 October 2004 should not be treated as being disposed of under the Buy-Back for the purposes of the 45 day rule.

If the Buy-Back allocation occurs on a day other than 14 November 2004, these dates may alter. Telstra can give no assurance that the Buy-Back allocation will occur on 14 November 2004.

In addition, where the Shareholder is under an obligation to make related payments in respect of the franked distribution arising on the Buy-Back Price, the shareholder may not qualify for the tax offset or franking credit.

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Telstra Buy-Back Tender 2004

3. Effect of the Buy-Back on Telstra

3. Effect of the Buy-Back on Telstra

The table below sets out the Telstra Group debt and total shareholders’ equity as at 30 June 2004 and post the Buy-Back (assuming 185.2 million Shares are bought back). The amount by which the Buy-Back Price exceeds the amount debited to contributed equity ($1.50 per Share), will be debited to retained profits. For example, if the Buy-Back Price is $4.05¹, an amount of $2.55 per Share will be debited to retained profits.

The Board and management continuously review Telstra’s capital structure and its target parameters to achieve an appropriate balance between deployment of capital in existing businesses and strategic investments,and distribution of surplus capital to shareholders. It aims to ensure Telstra maintains an efficient but prudent capital structure. Following the Buy-Back,Telstra expects to remain within or below its target parameters for gearing,interest cover and debt servicing.

While the precise impact of the Buy-Back cannot be determined until the Buy-Back Price and the size of the Buy-Back is known,the Buy-Back is expected to improve Telstra’s earnings per share and return on equity.

The amount of franking credits that Telstra will pass on to shareholders under the Buy-Back will not be known until the Buy-Back Price and the total size of the Buy-Back are determined. In any event,Telstra expects to be able to continue to fully frank its dividends for the foreseeable future.

3.1 How will the Buy-Back be funded?

The Buy-Back will be funded from liquid assets and short term funding facilities. Telstra is targeting to pay out approximately $750 million under the Buy-Back.

The Board believes that after the Buy-Back Telstra will remain strongly capitalised. The Buy-Back will not prejudice Telstra’s ability to take advantage of foreseeable profitable opportunities.

3.2 What effect will the Buy-Back have on Telstra’s issued Shares?

As at 30 June 2004, Telstra had on issue 12,628.4 million Shares. Assuming a total of $750 million worth of Shares are bought back, the table below sets out the number of Shares and the percentage of total issued Shares which would be bought back at different Buy-Back Prices. All Shares that Telstra buys back will be cancelled.

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Telstra Buy-Back Tender 2004

3.3 What effect will the Buy-Back have on control of Telstra?

The Commonwealth currently holds 51.05% of all Telstra Shares and it is not currently known whether the Commonwealth will participate in the Buy-Back. Assuming $750 million worth of Shares are bought back at $4.05¹ and that the Commonwealth does not participate in the Buy-Back, the Commonwealth’s shareholding will increase to 51.8% after the Buy-Back is completed.

Having regard to the Commonwealth’s holding and to Telstra’s otherwise widely held shareholding, the Buy-Back is not expected to have any change of control implications for Telstra.

3.4 Full year results

On 12 August 2004, Telstra announced its full year results for the year ending 30 June 2004. EBIT increased by 14.6% to $6.6 billion, and profit after tax and outside equity interests increased by 20.1% to a record $4.1 billion. The year ending 30 June 2003 was impacted by the non-cash write down of the investment in Telstra’s 50% owned joint venture, REACH Ltd.

Free cashflow declined by 8.8% to $4.1 billion, driven by the acquisition of the Trading Post Group, a reduction in proceeds from asset sales and offset by improved working capital management and increased cash profits before tax paid. After removing the impact of the Trading Post Group acquisition and the prior year sale of commercial properties, free cashflow growth was 20.2%.

The Telstra Board announced a fully franked final ordinary dividend of 13 cents per share, payable on 29 October 2004. This was an increase of 8.3% on the final ordinary dividend declared in the prior year and brought the full year ordinary dividends to 26 cents per share.

Electronic copies of the Annual Report and Annual Review can be found at www.telstra.com.au/communications/ shareholder/financial_reports.cfm. Shareholders can also contact the Telstra Share Registry on 1300 88 66 77 and ask for a hard copy to be sent to them.

3.5 Outlook for 2004/2005

Telstra’s top commercial priority is maximising the performance of our domestic franchise through improving the customer experience of Telstra. The company’s commitment is to deliver for our customers and the commitment has never been stronger.

Telstra anticipates that in 2004/05:

Telstra will release its 2004/2005 First Quarter Market Update on 20 October 2004.

Electronic copies of this release can be found at www.telstra.com.au/communications/calendar/index.cfm

1 $4.05 is an example only. You should not rely on this price as being the Buy-Back Price. See section 1.9 for an explanation of how the Buy-Back Price will be determined.

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4. Additional information on the Buy-Back

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Telstra Buy-Back Tender 2004

4.1 Size of the Buy-Back

ASIC has granted Telstra an exemption under subsection 257D(4) of the Corporations Act to permit Telstra to conduct the Buy-Back as an equal access scheme. Further details of the exemption granted by ASIC are set out in section 4.15.

Under the Corporations Act, Telstra may, without shareholder approval, buy back any number of Shares under an equal access scheme, provided that the number of voting shares bought back in the Buy-Back and in any other buy-back conducted in the last 12 months, does not exceed 10% of the smallest number, at any time during the 12 months preceding the Buy-Back, of votes attaching to Telstra’s voting shares. Although this limit would permit it to buy back around 1,024.6 million Shares, Telstra will not buy back more than 200 million Shares under this Buy-Back, and retains the discretion to buy back any lesser number of Shares.

4.2 Restrictions on Tender acceptances

Telstra will not accept any Tender which it may not lawfully accept or which, if accepted, would give rise to an illegal or unenforceable Buy-Back Contract or a Buy-Back Contract which Telstra cannot otherwise lawfully perform.

Section 8AB of the Telstra Corporation Act 1991 (Cth) (Telstra Corporation Act) provides that the Commonwealth must retain the majority ownership (50.1%) of Telstra. It is not currently known whether the Commonwealth will participate in the Buy-Back. The Commonwealth did not participate in the 2003 Buy-Back. An Invitation will be made to the Commonwealth as one of Telstra’s shareholders. To the extent necessary, Telstra will not accept any Tender from the Commonwealth, if acceptance would cause a contravention of the Telstra Corporation Act.

Section 8BH of the Telstra Corporation Act prohibits an ‘unacceptable foreign ownership situation’in relation to Telstra. In general, such a situation would arise if foreign persons held more than 35% of Telstra’s non-Commonwealth owned Shares or any one foreign person held more than 5% of Telstra’s non-Commonwealth owned Shares. To the extent necessary, Telstra will not accept any Tender or apply the scale back mechanism if acceptance or the application of the scale back mechanism would cause a contravention of the Telstra Corporation Act.

This Invitation is not made to persons to whom the Invitation may not lawfully be made, or to persons whose participation in the Buy-Back is not permitted under the laws of the jurisdiction in which they are resident. Without limiting the rights that Telstra otherwise has in relation to Tenders, a Tender submitted by such a person will not be accepted by Telstra.

4.3 Shareholders with more than one holding of Shares

You will receive a personalised Tender Form for each separate registered holding of Shares (for example, if you hold some Shares in your name and some Shares jointly with your spouse, you will receive two Tender Forms). You may tender Shares in the Buy-Back from any or all of your separate registered holdings provided that you complete the Tender Form(s) and follow the instructions on each Tender Form for each holding you wish to tender. Any scale back that applies to Shares tendered from more than one of your registered holdings of Shares will be applied to each of those registered holdings as if they were held by different persons.

4.4 Joint shareholders

If you hold your Shares jointly with another person (for example, your spouse) you must complete and return the Tender Form in accordance with the instructions for joint holdings on the Tender Form.

Trustees and nominees who hold Shares should inform the beneficial owners of the Shares about the Buy-Back and then aggregate all Tenders received from beneficial owners. It is the responsibility of the trustee or nominee to complete an aggregated Tender Form on behalf of all beneficial owners.

Any scale back that applies to Shares tendered by trustees or nominees will be performed on a registered shareholder basis.

If you hold American Depositary Receipts (ADRs) representing Shares, you will separately be sent additional information regarding how to instruct the ADR depositary to tender your Shares if you wish to participate in the Buy-Back.

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4. Additional information on the Buy-Back

4.6 Margin lending arrangements

If you hold Shares under margin lending arrangements or if they are held as security for a loan or as ACH collateral, you should ensure that your participation in the Buy-Back is permitted by those margin lending arrangements, that loan documentation or by ACH.

4.7 Shareholders who receive a pension or allowance

The effect your participation in the Buy-Back will have on your pensions or allowances (or those of your dependents) will depend upon the value of the Shares bought back, and on the level of your other income and assets. It is possible that your pension or allowance payments will not be affected at all because the social security income and assets tests allow you to have income and assets up to certain amounts without any reduction in payment. It will depend upon your particular circumstances. If you are in any doubt as to the action you should take, you should consult your professional adviser immediately.

4.8 Restrictions on the payment of Buy-Back proceeds

Telstra will pay shareholders the Buy-Back Price for each of their Shares that are bought back, unless it is prohibited from doing so.

Telstra is currently prohibited from making payments to certain political regimes, terrorist organisations and their sponsors under the Banking (Foreign Exchange) Regulations 1959 (Cth), the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002 (Cth) and the Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003 (Cth).

4.9 Rights under this Invitation cannot be transferred

You cannot transfer your rights under this Invitation. Those rights are personal to you.

4.10 The effect of submitting a Tender

A Tender constitutes an offer to sell the tendered Shares to Telstra on the terms and conditions set out in the Buy-Back Documents. A Tender does not, of itself, constitute a binding contract for the sale of the tendered Shares and cannot be enforced against Telstra. Telstra retains the discretion to accept or reject any Tender, and may choose to reject all Tenders. If Telstra accepts your Tender, a binding Buy-Back Contract is formed between you and Telstra, and you must sell the tendered Shares back to Telstra on the terms and conditions set out in the Buy-Back Documents including the terms and conditions set out below.

By submitting a Tender Form, you:

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Telstra Buy-Back Tender 2004

You will be taken to have submitted a Tender when the Telstra Share Registry receives your signed and validly completed Tender Form or, if you have a CHESS Holding, your Tender from your controlling participant through CHESS and the Tender has not been successfully withdrawn by the Closing Date.

4.11 Telstra’s rights to accept or reject Tenders and Tender Forms

At any time, Telstra may (at its sole discretion):

4.12 Telstra’s right to vary dates and times

Whilst Telstra does not anticipate changing any of the dates and times set out in the Buy-Back Documents (including, without limitation, the Closing Date and the Buy-Back Date), it reserves the right to do so without notifying you.

4.13 Telstra’s right to adjust Tenders

You are entitled to sell in the Buy-Back the lesser of:

If you submit one Tender of more than your Entitled Shares and Telstra accepts your Tender, Telstra will buy back only the number of your Entitled Shares.

If you submit more than one Tender and, in aggregate, you have tendered more than your Entitled Shares, Telstra will buy back only the number of your Entitled Shares in the following order of priority:

A Final Price Tender will be treated as a Tender at the lowest price in the range for the purposes of this provision.

4.14 Directors’entitlements

Directors are entitled to participate in the Buy-Back, but the Telstra Board has determined that selected executives involved in implementing the Buy-Back and their ‘related parties’ (as defined in the ASX Listing Rules) should not participate in the Buy-Back. As at 27 September 2004, the Directors of Telstra held or had a relevant interest in the following securities in Telstra:

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4. Additional information on the Buy-Back

4.15 ASIC and ASX Relief

ASIC has granted Telstra an exemption under subsection 257D(4) of the Corporations Act. This exemption permits Telstra:

The ASX has granted Telstra the following:

4.16 Privacy

Telstra is carrying out the Buy-Back in accordance with the Corporations Act. This involves the collection of personal information contained in Tender Forms to enable Telstra to process your Tender. If you do not provide this information, Telstra may be hindered in, or prevented from, processing your Tender.

The personal information collected by Telstra will only be disclosed to ASX Perpetual Registrars Limited in its capacity as share registrar of Telstra, to a print and mail service provider, to Telstra’s advisers in relation to the Buy-Back and to financial institutions in respect of payments to you in connection with the Buy-Back or as required or authorised by law.

If you wish to access the individual information collected by Telstra in relation to your shareholding, please write to Telstra, care of ASX Perpetual Registrars Limited at the mailing address set out in the Tender Form.

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5. Examples of completed Tender Forms

5. Examples of completed Tender Forms

5.1 Issuer Sponsored Holder tendering only at the Final Price (example only)

In the example below, an Issuer Sponsored Holder has elected to tender their entire holding (750 Shares) as a Final Price Tender. The steps taken in completing the Tender Form were as follows:

Step 1: The number of Shares tendered as a Final Price Tender (750) was noted at Box B. No entries were made in Section C as the shareholder did not wish to tender any Shares at any of the specified prices.

Step 2: The total number of Shares tendered (750) was noted at Box D.

Step 3: The shareholder signed at Box E and inserted their contact details. The completed and signed Tender Form was then mailed/delivered to the Telstra Share Registry.

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Telstra Buy-Back Tender 2004

5.2 CHESS Holder tendering both at specified prices and as a Final Price Tender (example only)

In the example below, a CHESS Holder has elected to tender their entire holding at a combination of specified prices and as a Final Price Tender. The steps taken in completing the Tender Form were as follows:

Step 1: The number of Shares tendered as a Final Price Tender (1,000) was noted at Box B.

Step 2: The number of Shares tendered at the various specified prices was noted in Section C.

Step 3: The total number of Shares tendered (1,000+2,000+2,000+2,000=7,000) was noted at Box D.

Step 4: The shareholder signed at Box E, inserted their contact details and then either mailed/delivered the Tender Form, or verbally communicated their instructions, to the controlling CHESS participant.

DO NOT SEND YOUR CHESS HOLDER TENDER FORM TO THE TELSTRA SHARE REGISTRY.

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6. Definitions and interpretation

6.1 Definitions

In the Buy-Back Documents unless the context otherwise requires:

ACH means Australian Clearing House Pty Limited (ABN 48 001 314 503).

ADR means an American Depositary Receipt.

ADR Holder means a holder of an ADR.

ASIC means the Australian Securities & Investments Commission.

ASTC means the ASX Settlement and Transfer Corporation Pty Ltd (ABN 49 008 504 532), the securities clearing house of the ASX.

ASTC Settlement Rules means the settlement rules of the ASTC from time to time.

ASX means Australian Stock Exchange Limited (ABN 98 008 624 691).

ASX Listing Rules means the ASX Listing Rules published and distributed by the ASX.

ATO means the Australian Taxation Office.

Board or Telstra Board means the Board of directors of Telstra.

Buy-Back means the buy-back of Shares by way of tender set out in the Buy-Back Documents.

Buy-Back Contract means the contract formed on the Buy-Back Date between you and Telstra if Telstra accepts your Tender.

Buy-Back Date means the date and time Telstra announces to the ASX the Buy-Back Price, the total number of Shares to be bought back and the details of any scale back.

Buy-Back Documents means this booklet, the Tender Form and the Withdrawal/Amendment Form.

Buy-Back Price means the price at which Telstra will buy back Shares from Tenders it accepts in the Buy-Back.

Buy-Back record date means 8 October 2004.

Capital Gains Tax Value for the purposes of the Buy-Back means:

as explained in section 2.1.

CGT means capital gains tax.

CHESS means the Clearing House Electronic Subregister System.

CHESS Holder means a holder of Shares on the CHESS subregister of Telstra.

CHESS Holding means a holding of Shares on the CHESS subregister of Telstra.

Closing Date means 7pm Melbourne time on Friday, 12 November 2004 for all shareholders on the Australian register, and 7pm New Zealand time on Friday, 12 November 2004 for all shareholders on the New Zealand register, unless the Board announces a later date.

Commonwealth means the Commonwealth of Australia.

Corporations Act means the Corporations Act 2001 (Cth).

EBIT means earnings before interest and tax.

EBITDA means earnings before interest, tax, depreciation and amortisation.

Excluded Foreign Person means any person holding Shares:

Final Price Tender means a Tender in which the shareholder elects to receive the Buy-Back Price, whatever Telstra determines it to be.

Invitation means the invitation by Telstra to its shareholders to offer to sell Shares, as set out in the Buy-Back Documents.

Issuer Sponsored Holder means a holder of Shares on the issuer sponsored subregister of Telstra.

Issuer Sponsored Holding means a holding of Shares on the issuer sponsored subregister of Telstra.

Liquid Interest-Bearing Assets means cash at bank and on hand, bank deposits, bills of exchange and short term debt instruments.

NZX means New Zealand Exchange Limited.

Priority Allocation means 400 Shares or such lesser number of Shares as is required to ensure that Telstra is able to buy back only the number of Shares it determines to buy back.

Priority Tender means a Tender submitted by a shareholder who tenders all of their Shares at the Buy-Back Price, below the Buy-Back Price and/or as a Final Price Tender and who would have a Small Holding (600 Shares or less) as a result of the scale back and Priority Allocation.

Shares means fully paid ordinary shares in the capital of Telstra on issue as at Friday, 8 October 2004.

Small Holding means a holding of fewer than or equal to 600 Shares.

Telstra means Telstra Corporation Limited (ABN 33 051 775 556).

Telstra Corporation Act means Telstra Corporation Act 1991 (Cth)

Telstra Group means Telstra and its subsidiaries.

Telstra Share Registry means the share registry of Telstra maintained by ASX Perpetual Registrars Limited (ABN 54 083 214 537).

Tender means a shareholder’s offer to sell nominated Shares back to Telstra at a Tender Price and on the terms and conditions set out in the Buy-Back Documents as amended in accordance with the procedures set out in this Buy-Back booklet.

Tender Form means the form of offer by a shareholder to sell nominated Shares to Telstra which is enclosed with this booklet and includes a Tender Form amended in accordance with the procedures set out in the Buy-Back Documents.

Tender Period means the period within which shareholders may lodge, withdraw or amend a Tender in accordance with the Buy-Back Documents.

Tender Price means one of the specified prices (from $4.05 to $4.65 per Share set out on the Tender Form) or, where a Final Price Tender is submitted, the Buy-Back Price.

38

TESOP 97 means the Telstra Employee Share Ownership Plan 1997.

TESOP 99 means the Telstra Employee Share Ownership Plan 1999.

TESOP 97 Loan means the loan from Telstra under TESOP 97.

TESOP 99 Loan means the loan from Telstra under TESOP 99.

TESOP Loan means a TESOP 97 Loan and/or TESOP 99 Loan.

TESOP Participant means a beneficial holder of TESOP 97 Shares and/or TESOP 99 Shares.

TESOP Participation Letter means the letter accompanying this booklet if you are a TESOP Participant.

TESOP 97 Shares means Shares, which are registered in the name of the TESOP Trustee on 8 October 2004 and held on trust for a TESOP Participant under the terms of TESOP 97.

TESOP 99 Shares means Shares, which are registered in the name of the TESOP Trustee on 8 October 2004 and held on trust for a TESOP Participant under the terms of TESOP 99.

TESOP Shares means TESOP 97 Shares and/or TESOP 99 Shares.

TESOP Trustee means Telstra ESOP Trustee Pty Limited (ACN 080 180 285).

Withdrawal/Amendment Form means the form entitled ‘Tender Withdrawal/Amendment Form’, available on request from the Telstra Share Registry, that is required to withdraw or amend a Tender.

you or shareholder means a holder of Shares in Telstra.

6.2 Interpretation

In the Buy-Back Documents, unless the context otherwise requires:

The postal acceptance rule does not apply to Tenders.

This Invitation, your Tender, and any Buy-Back Contract are governed by the laws of Victoria, Australia.

Media Release

Telstra achieves broadband milestone

Telstra today announced that more than one million broadband customers had been connected to its network across Australia.

Chief Executive Officer, Dr Ziggy Switkowski, said this milestone had been reached more than a year ahead of its original timetable and reflected extraordinary growth in demand for broadband services this year.

“This rate of customer uptake, and the passing of the one million milestone, were achieved faster than the adoption of other compelling communication services such as mobile telephony and subscription television,” Dr Switkowski said.

Figures to be released at Telstra’s first quarter results announcement on Wednesday will show that the company had connected 1,028,000 broadband subscribers as at 30 September 2004.

Of the reported number, 533,000 were BigPond customers while 495,000 were connected through Telstra Wholesale.

Telstra originally aimed to connect one million broadband customers by the end of 2005, but in the middle of 2004 it brought forward the target by six months because of the overwhelming positive market reaction to its broadband services. Even that revised target has been achieved well ahead of time.

“Telstra continues to see broadband and mobile services as key pillars of its future growth strategy,” Dr Switkowski said.

Telstra estimated that the total number of Australian broadband subscribers stood at about 1.3 million on 30 September 2004, and that approximately 16 per cent of Australian households now have a broadband connection while a further 55 per cent have a narrowband Internet service.

“Telstra’s broadband marketing and pricing moves in February ignited the market, and all providers have since experienced strong growth in demand following that initiative,” Dr Switkowski said.

“Interestingly, BigPond dial-up customer numbers continue to increase slowly,” Dr Switkowski said.

Continuing investment in Telstra’s network and exchanges means that broadband via ADSL is now available to about 10 million Australian households and businesses, representing more than 80 per cent of the population.

Media Release

Broadband is also available via cable and satellite technology, meaning a national platform has emerged by which Australian consumers and businesses can meet their needs and aspirations.

Dr Switkowski confirmed that Telstra is on track to reach its target of achieving $1 billion in broadband revenues by the end of 2006.

Mr Bruce Akhurst, Group Managing Director, Telstra Broadband & Media, said that interest had been stimulated by Telstra’s ADSL Demand Register, which allows local communities to influence the company’s broadband rollout by registering their demand for high-speed Internet services.

“Telstra has already upgraded 1,151 telephone exchanges, and 102 of those upgrades have resulted from the ADSL Demand Register,” Mr Akhurst said.

“A further 256 exchanges have met their required level of demand and will be upgraded in the near future.”

Telstra Media Contact:
Rod Bruem
Tel: 02 9206 0092
Mbl: 0438 288 010

Telstra’s national media inquiry line is 13 1639 and the Telstra Corporate Communications
Centre is located at: www.telstra.com.au/communications/media

Telstra Corporation Limited and controlled entities

Telstra Corporation Limited

Pleasing revenue growth in first quarter

Highlights

Full Year 03/04 Financial Highlights
12 August 2004

Telstra Corporation Limited and controlled entities

Telstra Corporation Limited
04/05 First Quarter
Market Update

Pleasing revenue growth in first quarter

Overview

Quarter ended 30 September 2004: Reported total revenue increased by 2.2%¹ or $115 million to $5,424 million. This includes $137 million generated from new acquisitions including Trading Post, KAZ Group, PSINet Group and Damovo, offset by the decline in proceeds from asset and investment sales of $234 million, which included the prior year sale of IBMGSA for $154 million. Reported sales revenue increased by 6.9% or $349 million to $5,381 million.

Underlying² total revenue increased by 2.8% or $143 million to $5,281 million. Underlying² sales revenue, from domestic and international activities, increased by 4.2% or $212 million to $5,244 million. Growth occurred in the following products and services:

This was partly offset by lower:

Underlying² domestic³ sales revenue increased by 3.9% or $183 million to $4,859 million.

The following details the Telstra group revenue result for the quarter ended 30 September 2004.

Footnotes:

04/05 First Quarter Market Update
20 October 2004

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Telstra Corporation Limited and controlled entities

Mobiles

Total Mobiles revenue, including wholesale mobiles, grew by 8.3% or $78 million for the quarter ended 30 September 2004.

Mobile services revenue increased by 9.4% or $80 million for the quarter attributable to increases in access fees and call revenues of $33 million, value added services of $44 million and wholesale services of $3 million.

Access fees and call revenue achieved growth of 5.1% or $33 million due to the increase in mobile services of operation of 14% to 7.7 million and increased mobile voice minutes of 14%. However, growth generated by increased volumes was impacted by yield reductions.

These increases were generated by:

     Growth in mobile data revenue of 26% or $27 million, attributable to:

0415 First Quarter Market Update 20 October 2004

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Telstra Corporation Limited and controlled entities

Internet and IP

For the quarter ended 30 September 2004, Internet and IP solutions increased by $73 million or 31%.

0415 First Quarter Market Update 20 October 2004

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Telstra Corporation Limited and controlled entities

PSTN Products

PSTN products decreased by 1.0% or $20 million to $1,995 million for the quarter. Reduced calling revenues across the PSTN product groups were offset by increased PSTN access revenues.

Specialised Data

Specialised data revenue decreased by 6.8% for the quarter reflecting a decline in mature products such as Leased Lines and DDS (Digital Data Services) where customers have migrated to newer technologies. Frame relay revenue declined although SIOs have increased as more customers take up IP WAN for which frame relay is the premium access.

0415 First Quarter Market Update 20 October 2004

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Telstra Corporation Limited and controlled entities

ISDN

ISDN revenue declined by 3.3% or $8 million with a 26% or $16 million decrease in ISDN data call revenue as corporate customers continued to migrate to more technologically advanced products such as IP products. This is partly offset by growth in voice revenue of 3.4% or $3 million and ISDN access revenue of 5.3% or $5 million due to the penetration into the SME and consumer markets for ISDN. The number of services grew by 7.8%.

Advertising & Directories

Reported advertising and directories revenues, including revenue generated by Trading Post, increased by 37% or $68 million for the quarter. Sensis Pty Ltd acquired the Trading Post Group in March 2004. Trading Post revenues of $39 million are excluded from the underlying results.

Underlying advertising and directories revenues increased by 16% or $29 million for the quarter. The revenue growth was attributed to White Pages® with additional colour listing options and growth in e-mail and web listings. Strong growth continues in Yellow Pages® print and Yellow Pages® online including location and navigation online products.

Intercarrier Services

Intercarrier services revenue decreased by 0.4% to $277 million for the quarter. PSTN terminating prices and volumes reduced in line with industry trends and wholesale transmission product revenue declined due to continued pricing pressures resulting from an oversupply of capacity in the market. The impact of ongoing reductions to mobile terminating prices was partly offset by volume increases. These revenue reductions were partly offset by increased SMS interconnect revenues due to higher volumes and increased use of higher yield products such as MMS and SMS Direct Connect (internet to mobile). Wholesale long distance and international revenue increased due to higher volumes.

Inbound calling products

Inbound calling products revenue declined by 1.7% to $117 million for the quarter. Competitive market pressures on prices have resulted in a decline in net yield and the customer base.

Solutions Management

Reported solutions management revenue increased by 80% or $101 million for the quarter and included revenue generated by the KAZ group of $86 million and Damovo of $1 million. Telstra acquired the KAZ Group in July 2004 and Damovo in September 2004.

Without the benefit of these acquisitions, underlying solutions management revenues increased by 11% or $14 million for the quarter. The growth is due to the commencement of significant new radio services construction contracts and an increase in managed wide area networks.

0415 First Quarter Market Update 20 October 2004

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Telstra Corporation Limited and controlled entities

Hong Kong CSL

In local currency (HK$), revenue increased by 6.7% for the quarter. This was achieved through strong growth in mobile handset sales due to the move into new customer segments and the launch of new models with advanced features; this also contributed to an increase in data revenue. Innovative content and applications and growth in international voice also contributed to the increase. However this has been partially offset by aggressive price competition, which has continued to reduce local voice revenue and average revenue per user.

In Australian dollars, revenue decreased 1.6% or $3 million for the quarter, with an adverse exchange rate impact of $15 million.

TelstraClear

In local currency (NZ$), revenue increased 3.8% for the quarter. On a stand-alone basis, including intercompany revenue, TelstraClear revenue increased 5.4%. Revenue growth has been achieved from continued strong retail revenue growth, mainly due to the large business segment growth and consumer/small business segment even though the consumer/small business segment was adversely impacted by aggressive incumbent competition. This increase has been partially offset by a decrease in wholesale revenue due to rate reductions in the wholesale market with international carriers.

In Australian dollars, revenue has increased 7.0% to $152 million for the quarter, which includes the positive impact of an improved exchange rate.

Offshore Revenue

Reported offshore revenue has increased by 157% or $33 million for the quarter and included revenue generated by PSINet of $8 million. Telstra acquired PSINet in August 2004.

Underlying offshore revenue grew by 119% or $25 million for the quarter. This is due to Global Sales acquiring the customer & network bases from Powergen and Cable Telecom in the UK in October 2003 and February 2004 respectively.

0415 First Quarter Market Update 20 October 2004

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Telstra Corporation Limited and controlled entities

Pay TV Bundling

There has been rapid growth in Pay TV bundling with revenue increasing by 97% or $28 million. Telstra’s bundled Foxtel subscribers have increased by 43% to 253,000. Austar bundling now has 35,000 subscribers. The growth in services is due to the introduction of digital TV and a change to the packaging and bonus option introduced in June 2004.

Payphones

Payphone revenue has declined by 14%. While the number of payphones has remained steady the decrease is due to lower usage because of product substitution to prepaid calling cards and mobile phones.

Other Sales & Services

Reported other sales and services increased by 11% or $17 million and included revenue of $1 million generated by the KAZ group, acquired by Telstra in July 2004.

Underlying other sales and services revenue grew by 11% or $16 million. This included revenue growth from increased HFC Cable usage, which included receipts for cable utilisation from Foxtel, miscellaneous revenue attributable to the introduction of merchant fee charges on credit card payment of bills, commercial recoverable works including Foxtel Pay TV digital conversion, and Telstra information & connection services due to the launch of the 1234 service.

Revenue growth is marginally offset by a decline in card services attributable to competition in the international calling card market and substitution by mobiles and reverse charge products by competitors. Virtual Private Network declined as customers continue to be offered new tariff options to migrate to IP technology. External Construction revenue reduced due to lower industry construction activity levels.

Other Revenue

Reported other revenue decreased by 85% or $234 million to $43 million. Proceeds from investment sales declined by $165 million, which included the prior year sale of IBMGSA for $154 million.

Underlying other revenue decreased by 65% or $69 million for the quarter reflecting the fall in proceeds from sale of plant and equipment of $53 million. In addition government receipts from grants reduced. Rent received for property and vehicles declined due to lower levels of Telstra fleet hire and property rental.

Service

Telstra continues to provide high service levels across Australia as evident in the recent Australian Communications Authority report for the June 2004 quarter. National Customer Service Guarantee (CSG) performance for connections was 92% and fault repairs 91%. CSG performance was above 90% in all categories, urban, rural and remote areas.

The June 2004 service report also shows that Telstra’s Priority Assistance Program delivered high service levels with 96% of connections and faults in the quarter repaired within the required time frame.

Outlook

0415 First Quarter Market Update 20 October 2004

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Telstra Corporation Limited and controlled entities

Strategic Direction

Our objective remains to drive our domestic business by accelerating uptake of broadband products and strengthening mobile market share. We see customer relationship and excellent customer service as key to a continuing strong market share position and fundamental to protecting PSTN product revenue and producing balanced results across our portfolio.

Management remains committed to maintaining margins from a focus on profitable revenue growth and our $800 million cost reduction program, which combined with capital expenditure management, will continue to generate strong free cashflow.

Recent acquisitions have met both our strategic fit and investment criteria. The strategy of managing cashflow growth and investing in acquisitions that meet our investment criteria, while remaining committed to our capital management program, is directed at improving overall returns to our shareholders.

For enquiries on this announcement please contact:

0415 First Quarter Market Update 20 October 2004

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Market Update
for three months ending 30 September 2004