Slide 1: Analyst Briefing - Half year results presentation pack
15 February 2007 Company Announcements Office Australian Stock Exchange 4" Floor, 20 Bridge Street SYDNEY NSW 2000 ELECTRONIC LODGEMENT Dear Sir or Madam Analyst Briefing - Half year results presentation pack Office of the Company Secretary Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA
Slide 2: Disclaimer
‘Discai i ooking Hgures in Uys presentatiol ures id DE BUD ECL La hounding aileron es te parker share oe emient estimates posed 3 molly avdilaple int a Aggicated y ) ; ;
Slide 3: Half year financial highlights
S DEions except merges DPS) Sales Revenue Ordinary DPS (cents) z
Slide 4: Half year operating highlights
4.2m 3G S105 - added more thar 700,000 1HO7 3G ARPU ualift of $20 maintained Next G™ driving content and applications - non SMS data ARPU +74% Outgrowing competitors to increase market share by 1 Beating nearest competitor 3:4 Over 200,000 retail wireless broadband subscribers Total Une toss of 6.8%
Slide 5: Telstra's Competitive Advantage
| Telstra’s Com etitive Advantage - Ub Data driving more thar: hett of $20 36 ARPU Uptiit Incremental postpaid SARC Monthl Month2 Month In Dec, 36 customers spent $i2 more on non SMS gate SMS than 2G customers and $4 more or Month 6 3 Month4 Months | Telstra's Competitive Advantage - < POXTEL by Mob
Slide 6: The best the competition can do
| The best the competition can do « Strong ee growth ire market share & Beating nearest campetitor & Holding ARPU 2Hos: HOT sequentiatty for the first "er mamunaupmne time Sa S49
Slide 7: Winning where it matters - PSTN and Sensis
eit matters - PSTN Slowing Revenue Decline & Srattest retail line loss in five years hy oy “ein "stomata 2HOS 1H06 2HOS 1HOT Win i Mane ning where it matters - Sensis. Ontine ustige +21% New media % of revenues increasing (normatised} 33% of revenve growth from emerging businesses Monthly unique bro
Slide 8: SouFun
| Sourun Mlle | SouFun operating | Mille na boomi China: GDP Value 2008E 2007E 2008 2009 Z010E Chinese Online Real Estate Advertising Market: ry 2005 20062 Z007e Z008e 20098 2010 SouFun Performance Measures: Page views per manth Page views monthly Avnliionss Jans Bul OS ‘Apr 06 Novos, ® Canstructios
Slide 9: Transformation
Transformation. —_—- di iving Capex! improve ents sili _ % Next 6™ peak network %@ On track download speeds increased to fda 9 nedring : 1" retease at the end of i 24.4Mbps complet i calenda? 2007 i _® Additional 400 base stations ‘@ Migzations of Internet backbone |: E being rolled out in FYO7 I? t
Slide 10: Transformation achievements
vements g ARNINGS ADEM at is Over 6,400 More than 80% Over 6,900 vehicles participants front of house oes me i Gee Les oees Ley
Slide 11: Financial highlights (Reported)
Sales revenue Operating expanse Earnings (BIT Transformation lighlights (Reported) on frock @eee Mobile revenue growth of 12% Retail broadband revenue growth of 50% PSTN revenue decline slowed to -5.6% Normalised sales revenue 43.6% Labour down 3% Goods and Services +17% Other expenses +15% Better t
Slide 12: Financial results by product
& DEMONS fexcept margins & DPS) Sales Revenue EBITDA Total mobiles + Mobile services 2,441 « Mobile handsets 357 Retail broadband 497 Wholesale broadband 279 IP access 193 Specialised data 404 Sensis B85 TES PSTN products 3,615 65 63.2 50.2 335 27.0 (10.4) @17) (5.6) * Normalised for deferral of Met
Slide 13: Sensis and retail broadband
Sensis: $885m “" $1i7m (Normalised * Normatised Sates Revenue ® sth year of strong 1H growth $885m % New media revenue +62% eto S78} af 3826784, (Yellow +32 % Onbne usage +21% % Approx, 33% of new customers bundle print & Ho? aHos online (v5 2 istoricallyy " Normalised for Metbourne ¥? of 174m ® Sou
Slide 14: Mobiles
HE 20 2G 3G S103 Jun0s Jul06 AugOS Sepes Octos Novos Pecos s 3G5M SiOs exceed 1 million - added aver 7OOk in 2M, of which 280k were Next G'™ Mobile data revenue 22% of mabile services revenue {up from 29% in 2408} %® Nor SMS Data ARPU up 74% ® ()2 Post paid adds~ 42x Voda, 13x Optus ? Revenue an ot
Slide 15: Revenue growth and subscribers
Revenue Growth 206 AHO? Closiny Subscribers tee performance mobiles per 9 36 und Broadband 1 Chur 1s 4 cad nore mess jecline {on previous year: churn innprewernent, nd Broadband & IP services
Slide 16: Expenses: labour and headcount reductions
bn 2.2% 1.3% GY 7 Mobiles Acquisitions/ Transformation Business 1He7 Divestments (ex D&A) as usual Ly Le / Labour: bn x ie edu awer-cimouintekxpe Lesh FAO raanely pc Target Headcount Reductions (pre-uequisitions & divestinerts} 8,000 5,000 4,000 Frye aor FY? 208 FYos
Slide 17: Goods and Services
Goods and Services 92. 6bn RARER AIEEE Handset subsidies wiih: COGS Usage & Dealer Commissions Network Payments
Slide 18: Cost take outs and depreciation
‘e Cost take outs already being achieved: ~ Labour (Org redesign, Operations productivity, Corp centre) » Reach redesign roverment, Depreciation & Amortisation: $2.0b 4 AD DMS Acceterated depreciation and AHOT amortisation (8 & 4} {sm} eview ® Underlying growth +1.7% ~ Mix change toward higher softw
Slide 19: Cash flow and capital management
Cash Capita internetional Trarisferraction div irens Over $ibr sh F low TOIT and Financial Parameter Total Reported 1HoS Operating Cash Flow Investing Acquisitions} Divestments Total Reported IHO7 Financial Parumeters
Slide 20: International and FY2007 guidance
| international : {at yes New World KS imo? 108 & Meeting integration plan @ Growing on-net business ‘@ Triple digit top milestones @ Have rot participatedin growth of ®@ Churnimproving broadband price war 267% and bettar ® Returned ta SIO growth in @ Regulatory change tray deliver line growth of De
Slide 21: Key risks: PSTN and Next G
receptions -P STN & FY06 is only the beginzing of along period where fixed line will decling at high single digit rates Stowed decline in PSTN to 5.6% Churn trend improving with po: PSTN chur from competitors since October o6 Subscription pricing pasitive impact (4.2% of base) Teistra’s change in st
Slide 22: Addressing key misperceptions
4 day Telstra hardig tay Telstra hardiy sL2+ launched & in guidance TTN or ADSL2 speeds to 8Mbps apened *% Telstra has already postponed a number of capex programs inte 2607 and abandaned other capex projects ® Capex program on track. Projects ‘abandoned’ we aligned to strategy %® FYOT EBIT quidasic
Slide 23: Misperceptions and regulatory key issues
Addressing ke EASE IZE Maperceptons-¥ ans chateriging and not supported by any precedents internationally %® International analysts predict it is possible... 2% o%6 uoruan, poUUCiaTeE dacig ig SHSD00L IN xem Consensus Forecast EBITDA Margin Growth to FY10* waoassimg BpDUPD Tg 1aay quuds Naw LBLy pis
Slide 24: Long Term Management Objectives
unchanged" Long Term M anagement Objectives RS Revenue to 2.5% pa to PYLO New product in excess of rive PYLO Cost growth EBITDA ($} reaiegee 46% Lo 48% Workforce Down: 12,000 by FYI0 Capex 1LO% to of revenge by FY1O Free Gash flow $65 ta $7b by F¥20