Slide 1: ASX lodgement letter: Fixed Income Investor Presentation
02 July 2004 The Manager Company Announcements Office Australian Stock Exchange 10th Floor, 20 Bond Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam qelstra Office of the Company Secretary Level 44 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA Telephone 03 3634 6400 Facsimile 63 96
Slide 2: Telstra Corporation Fixed Income Investor Presentation
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Slide 3: Disclaimer
Disclaimer ~ The financial information i in this pack is is based financial results of Tel stra as at July 2: its fi inancia elstr
Slide 4: Agenda
Agenda i. + Economy _* Tels ir elstr
Slide 5: Economy
Slide 6: Australia — key statistics
Australia — key statistics Key Statistics: * GDP US$430b (2002/03) « Population 20.1 million « Land Mass Area: 7./ million square kms ine: 60 million ey Variables Variable 03-04 (f) | 04-05 (f) ang d GIVelse CCONO Dds
Slide 7: Australia - key statistics
Australia - key, Statistics POPULATION DENSITY. __ Persons per km? GROWTH IN MAJOR ECONOMIES — : Real GDP Growth over Year to March 2004 elstr
Slide 8: Broad implications for communications sector
Broad implications for communications sector a co outlook real growth i in communications servic 35.0 8% | is i over the next few W Years ve INDUSTRY G ROW elstr
Slide 9: Telstra
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Slide 10: Telstra - who are we?
Telstra- who are we? = Australia’s leading information services and telecommunicati = 13th largest telco globally by market capitalisat Full service, fully ir Cl -_— elstr
Slide 11: Ownership
Ownership Commonwealth of Australia {election expected within next 6 months) elstr
Slide 12: Strength from full service fully integrated model
Strength from full service fully integrated model Internet =) ata SC ae a) elstr
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Slide 14: Telstra's market share strong across the board
Telstra’s market share strong across the board bel Domestic LD _InternationalLD y AT 2 _ bb |. Be 66%. un << sig : atat® G ; : oe Telstr
Slide 15: Diverse revenue streams
Diverse revenue streams Intercarrier Solutions —_ Various Services Management Controlled — _ Data & Internet 6% 2% ~~ Entit 14% a : bound Calling Products 2 SNOUT) ald stab Telstr OUGN GIVE
Slide 16: A paradigm shift is underway
A paradigm shift is underway Fixed network and services & a: Broadband _ everywhere Ubiquitous wireless { Mobile network and services IP NETWORK —_—_—_—_—_"> Internet network may PSTN Multi-access and services access innovative —_—_—_—_—_—————_"> devices The shifttoIP can be manage
Slide 17: Voice over Internet Protocol (VoIP)
Voice over internet Frotocoi (Voir - an increasing technology Doo GL is Losey, a i Lo ae Co oy Lie Voy L Ye OE EY LD oe a oye yi ay Yay ey Le LL ey) ee EY - yy ) ane - Dr ADD ale Lh ely @ Ns ay ie ale Geil vig il tii ily A ' e oy 9) q 0 a vi ollite ewa 5 Re fad _ > . a a q ay LD ZO _ . . > D Le, a ]
Slide 18: 3G - carefully managing our options
3G- carefully managing our options - Australia” _ 2.5G networks (1xRTT and ores) meeti - Demand led technology ae d iOMQG te DIODO O all Oe Geinand |ec elstr
Slide 19: International expansion
SS = = SS = eS Se Sr = SS == +f Lic ny « ian expansion ™ ted As ot IMI wee | ae 4 th | He Wi _ Pp Po — (ae - ™ _ ... International — |» ves y v a y
Slide 20: Reach refinancing
Reach refinancing » = Formed in Feb 01 a Combined i Telstra & _ Bank P Z a CCW memmi Syndicate REACH @ Q) oe = elstr
Slide 21: FOXTEL
FOATEL - combining broadband |with broadcast | * Joint venture - _ ee ee 20%, P BL 259 ee cistts) = Penetration is 23% elstr
Slide 22: Driving customer satisfaction
Driving customer satisfaction — _ Activation - Performance Levels Assurance - Performanc 95% ; : . — 90% | ee S x 85% - : : & 85% 3 a fe 80% £ : : = 1b% 70% — 70% 65%. ___ (Customer Service Guarantee) oe oo “elstr
Slide 23: Managing customer churn — mobiles
Managing Customer churn — mobiles — deactivated per month (postpaid) Domestic Postpaid Mobi e churn cme 2% | ‘ae fy PUOUTdled OGe ~siets
Slide 24: Managing customer churn — fixed line
Managing Customer cnurn —Tixed line netserviceslostpermonth _- Fixed line churn improving | per month v os 3 IS : : Lo _ ALEC MOUS! NEIp “elstr
Slide 25: Capital management drivers
Capital management drivers : : 1 Stable operating and regulatory environment, a = Focus on domestic core Wile a la A a - 2 : : a : “elstr
Slide 26: Capital management approach
Capital management approach — » Target nancial parameters. - Gearing (ND/ND+SHF): ~ Interest cove elstr
Slide 27: Financials
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Slide 28: Five year financial summary
5 year financial suey _ _ . Ven ended 30 June ASb 999 2000 2001 2 Tol evenue _ ee EBITDA : _ elstr
Slide 29: Underlying results
Underlying results (1H 04 % Ax SalesRevenue $b (except EBITDA Margin) HS 1K (0.1) 18 | : Domestic S lesRevenue (4.1) 3.9 3.0 5.7 2.0 18.2 elstr
Slide 30: CAPEX prioritisation and allocation process
CAPEX prioritisation and allocation process rategic : mar Business | «Unit Investment Sponsorship PROPOSALS: PRIORITISATION BY: Discretionary (— Investment ~- * Strategic * Risk * Portfolio balance Alignment Value Customer Demand| | Revenue Generating * Sales targets * Service levels + Unit costs Pr
Slide 31: Operating expenses under control
Operating expenses under control | $3,744m $3,573m $3,252m $3,830m - international traffic payments - feduced prices - - discretionary costs controlled - IT and service payments controlled elstr
Slide 32: Telstra path to value creation
Telstra path to value creation Higher contn > + * Wireless — _| Financial Outcomes Lower Costs a a yee Telstr
Slide 33: Regulation
Slide 34: Industry/Regulatory framework
Industry/Regulatory framework = ~ Consumer Fo - Competition “policy — 7 - policy ee pea oo Senvice quay _* Accessdeficit —« * Conduct regime 50 + Investment —_—» Access regime | * Cher (ca fee OA) ee .LhmhrDrLmrmrmrrCOC Australia
Slide 35: Australian regulatory environment
Australian regulatory environment 1992 — competition introduced (2 network carrier licenses, 3 mobiles) 1997 — open competition (unlimited entry) cae Social regulation: foi ~ minim ional a = C O Gj 6 & 6 @ + 6 @ CA & 6 6 ™=elstr
Slide 36: Regulatory issues for current year
Regulatory issues for current year Indicative dates 004 e 2004 004 004 O04 AUG 2004 7 Reguiato = elstr
Slide 37: Funding
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Slide 38: Key borrowing objectives reflect long term perspective
Key dorrowing opjectives retiect long erm perspective = Capability to access multiple markets a oe = Diversi y of sour (active and stro : : : : “elstr
Slide 39: Debt maturity profile
Debt maturity profile. ASD elstr
Slide 40: 04/05 funding requirements and sources
04/05 funding requirements and sources ~ Funding Reena = Maturing long term debt __~ Additional investments organi = Ca pita freturn
Slide 41: Debt facilities at June
Debt facilities at June 04 See Wee ———____— Long: €8b | US$ 0.75 - 25b _ | Short: A —_ Debt Issuance Progr: Drawdo and allo @ “elstr
Slide 42: Target financial parameters
Target financial parameters (year end June.30) 6 1. Payout Ratio 2. Gearing ~ Net Debt / ND+SHF 150 a 55 50 Weaker y 100 50 : arget pare provide ~elstr
Slide 43: Key debt parameters
Key debt parameters _ (year end June elke Sb =—s—“‘“‘“‘iésé—C ONO Ot : gg a . = Gross Debt _ elstr
Slide 44: Telco credit ratings
Telco credit ratings Moody's | Verizon “SBC Comm. Vodafone SingTel [CNZ BellSouth Telia Corp Sonera TELE! Ys, age Telstr
Slide 45: Standard & Poor's credit ratings
C Standard 8 Poor's Anand 'c j VS UN Piao “elstr
Slide 46: elstr
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Slide 47: Investment highlights
Investment highlights Co Full service ae fully integrated Tele San ac stab e.. Quality investment - Stable ee long ae rating Diversity | = f\ C3 fo ODVO O Oil Gud “elstr
Slide 48: Telstra
Telstra — elstr