IT S HOW WE CONNECT TELSTRA 2012 ANNUAL REPORT

IT’S HOW WE CONNECT

TELSTRA 2012 ANNUAL REPORT

Becoming an e-Shareholder

Telstra encourages shareholders to elect to receive their communications electronically. By providing your email address you will receive your dividend statements, Notice of the Annual General Meeting and Shareholder Updates (including summary ¿QDQFLDOLQIRUPDWLRQE\HPDLOQRWL¿FDWLRQ7KLV is also important if we want to communicate with you at short notice in relation to current issues. Please refer to the Managing my Telstra Shareholding Online section below for instructions on how to do this. Please contact our share registry on 1300 88 66 77 or email

[email protected] should you require any further information relating to your shareholding.

Managing my Telstra Shareholding Online 1. Go to www.linkmarketservices.com.au/telstra 2. Enter your SRN/HIN (this can be found on

your latest dividend statement), your post code, the security code displayed and read and accept the terms and conditions.

Use the following sections to help you locate information about your Telstra holding(s): Holdings – here you can access your transaction history, holding balance, holding value and see the last closing share price. Payment & Tax – here you can access your dividend payment history, payment instructions and your TFN. Shareholders can update bank details here.

Communication – use this section to become an e-Shareholder. You can update your postal address, email address and communication elections here. Annual Report

Telstra’s 2012 Annual Report is available to all shareholders on our Investor Website at www.telstra.com.au/annualreports. To receive a hardcopy of the statutory Annual Report (free of charge) you can call our Share Registry on 1300 88 66 77 and request the report be sent to you. You may also update your communication election online to receive future copies of the Annual Report. Please refer to the Managing my Telstra Shareholding online section for instructions on how to do this.

Communicating With Our Shareholders Our online Investor Centre www.telstra.com/ investor is an important tool for our shareholders where you can access all the latest news, information and shareholder communications faster. If you are an e-shareholder, we will let you know when there is something important for you to view or download. Additional Sustainability Reporting

Selected graphs and data presented in this report are included in our Bigger Picture sustainability reporting series. This series provides detailed information and analysis for our stakeholders on Telstra’s sustainability performance. We develop our reporting with reference to industry and sustainability standards including the United Nations Global Compact Communication on Progress, Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines and Telecommunications Sector Supplement (pilot). The GRI Index and Bigger Picture series can be found online at www.telstra.com.au/sustainability.

Key Highlights i

Results ii

Chairman and CEO Message iv Board of Directors vi

Our Business viii

Our Performance x

Improve Customer Satisfaction x Retain and Grow Customer xii Numbers

Simplify the Business xiv Develop New Growth Businesses xvi

Sustainability xviii

Our Customers xx

Our People xxii

Our Communities xxiv

Our Environment xxvi

1.6M

7M

OVER

30%

GROWTH IN

BUNDLED

CUSTOMERS

NBN

NEW MOBILE

CUSTOMERS

IN AUSTRALIA

FULLY-FRANKED

DIVIDEND PER

SHARE

AGREEMENTS

FINALISED

i

SOCIAL AND

COMMUNITY

INVESTMENT

REDUCTION IN

CARBON EMISSIONS

INTENSITY

CALLS HANDLED

OUT OF HOURS

$240M

36%

28

FINANCIAL

RESULTS

FIVE YEAR SUMMARY

(1) OperatLQJSUR¿WEHIRUHLQWHUHVWGHSUHFLDWLRQDQGDPRUWLVDWLRQDQGLQFRPHWD[H[SHQVH(%,7'$LVXVHGDVDPHDVXUHRI¿QDQFLDOSHUIRUPDQFHE\H[FOXGLQJ FHUWDLQYDULDEOHVWKDWDIIHFWRSHUDWLQJSUR¿WVEXWZKLFKPD\QRWEHGLUHFWO\UHODWHGWRDOO¿QDQFLDODVSHFWVRIWKHRSHUDWLRQVRIWKHFRPSDQ\(%,7'$LVQRWD PHDVXUHRIRSHUDWLQJLQFRPHRSHUDWLQJSHUIRUPDQFHRUOLTXLGLW\XQGHU$,)562WKHUFRPSDQLHVPD\FDOFXODWH(%,7'$LQDGLIIHUHQWPDQQHUWRXV (%,7'$OHVVGHSUHFLDWLRQDQGDPRUWLVDWLRQ 2012 $m 2011 $m 2010 $m 2009 $m 2008 $m 6DOHVUHYHQXH 25,232 24,983 24,813 25,371 24,657 EBITDA(1) _{10,234 10,151 10,847 10,948 10,416} EBIT(2) _{5,822 5,692 6,501 6,558 6,226} 3UR¿WDIWHUWD[ 3,424 3,250 3,940 4,076 3,711 'LYLGHQGVGHFODUHGSHUVKDUHFHQWV 28 28 28 28 28 7RWDODVVHWV 39,525 37,913 39,282 39,962 37,922 *URVVGHEW 17,222 16,232 16,031 17,036 16,285 1HWGHEW 13,277 13,595 13,926 15,655 15,385 7RWDOHTXLW\ 11,689 12,292 13,008 12,681 12,245 $FFUXHGFDSLWDOH[SHQGLWXUH 3,591 3,410 3,471 4,598 4,897 )UHHFDVKÀRZ 5,197 5,477 6,225 4,365 3,855

FREE

CASHFLOW

SALES

REVENUE

2010

$24.8b

2012

$25.2b

2011

$25.0b

MOBILE

REVENUE

PROFIT FOR

THE YEAR

$3.9b

2010

$3.4b

2012

$3.3b

2011

$6.2b

2010

$5.2b

2012

$5.5b

2011

$8.7b

2012

$7.3b

2010

$7.9b

2011

2EMHFWLYH 2012 2011 2010 &XVWRPHUVDWLVIDFWLRQ

Score _{7.2 7.3 6.9 6.8}

7,2FRPSODLQWV

Level 1 Complaints per month per 10,000 SIOs _{1RPRUHWKDQ 1.9 3.1}

'LVDELOLW\$FWLRQ3ODQ

Percentage of commitments completed _{66% 75%}

(PSOR\HHHQJDJHPHQW

Survey score _{77% 77% 75% 75%}

+HDOWKDQGVDIHW\

Lost Time Injury Frequency Rate (LTIFR) _{1.5 1.32 1.30 2.32}

*HQGHUGLYHUVLW\

Women in executive management _{25% 25.0% 22.7% 22.4%}

9ROXQWHHULQJGXULQJ7HOVWUDWLPH

Number of days _{1,500 1,375}

3D\UROO*LYLQJ

Participation rate _{3.0% 2.7% 3.5%}

6RFLDODQGFRPPXQLW\LQYHVWPHQW

Total (millions of dollars) _{Ongoing investment $239.8m $248.0m $262.1m}

Everyone Connected (targeted programmes)

People impacted _{(VWDEOLVKEDVHOLQH 101,500}

&DUERQHPLVVLRQV

Tonnes of carbon dioxide equivalent (tCO2e) Minimise our impact 1,676,925 1,659,714 1,687,777 &DUERQHPLVVLRQVLQWHQVLW\

tCO2e per terabyte of data 15% reduction to 1.64 1.24 1.93

HZDVWH0RELOH0XVWHU

Tonnes collected _{WRQQHVFROOHFWHG 14.3 17.3 18.9}

NON-FINANCIAL

RESULTS

KEY PERFORMANCE INDICATORS

OUR PEOPLE

OUR CUSTOMERS

OUR COMMUNITY

OUR ENVIRONMENT

iii

OUR GOAL IS TO BRING

THE SOCIAL AND THE

ENVIRONMENTAL INTO

THE HEART OF THE

ORGANISATION IN WAYS

THAT CREATE VALUE.

WE CONTINUE TO FOCUS

ON THE STRATEGIC

PRIORITIES OF

IMPROVING CUSTOMER

SATISFACTION;

RETAINING AND

GROWING CUSTOMER

NUMBERS; SIMPLIFYING

THE BUSINESS AND

DEVELOPING NEW

GROWTH BUSINESSES.

THESE PRIORITIES ARE

DELIVERING POSITIVE

RESULTS.

'HDU6KDUHKROGHUV

:HDUHSOHDVHGWRSUHVHQW\RXZLWK

DUHYLHZRI7HOVWUD¶VRSHUDWLRQV

DQGVXVWDLQDELOLW\LQLWLDWLYHVRYHU

WKH¿VFDO\HDU7KLV\HDUZH

KDYHEURXJKWWRJHWKHURXUDQQXDO

DQGVXVWDLQDELOLW\UHSRUWVEHFDXVH

ZHEHOLHYHWKHVHWZRWRSLFVDUH

LQWHUZRYHQ:HEHOLHYHWKDWDV

DEXVLQHVVRXUDELOLW\WRSURVSHU

RYHUWKHORQJHUWHUPKLQJHVRQRXU

UHVSRQVHWRWKHFKDQJLQJVRFLDO

DQGHQYLURQPHQWDOH[SHFWDWLRQVRI

HPSOR\HHVFXVWRPHUVLQYHVWRUV

UHJXODWRUVDQGWKHZLGHUSXEOLF

KEY OUTCOMES

,Q¿VFDO\HDU7HOVWUD

FRQWLQXHGWRGHOLYHURQLWV

FRPPLWPHQWVWRVKDUHKROGHUV

7HOVWUDDFKLHYHGJURZWKLQVDOHV

DQGSUR¿WLQFUHDVHGPDUNHWVKDUH

DQGJUHZSUR¿WDELOLW\LQNH\JURZWK

SURGXFWVDQGZDVDEOHWRRIIVHW

GHFOLQHVLQOHJDF\SURGXFWVZLWK

JURZWKLQEXVLQHVVHVVXFKDV

PRELOHVDQGQHWZRUNDSSOLFDWLRQV

and services.

7KLV\HDUZHDOVRDQQRXQFHG

DFOHDUIUDPHZRUNIRUFDSLWDO

PDQDJHPHQWDQGKRZZHZLOOORRN

DWWKHXVHRIFDVKDQGVKDUHKROGHU

UHWXUQVLQWKHIXWXUH7HOVWUDDOVR

SDLGDIXOO\IUDQNHGWRWDOGLYLGHQG

RIFHQWVSHUVKDUHIRUWKH

¿VFDO\HDUZKLFKUHWXUQHG

ELOOLRQWRVKDUHKROGHUV

NATIONAL BROADBAND NETWORK

(NBN)

7KH¿QDOLVDWLRQRIWKH1DWLRQDO

%URDGEDQG1HWZRUN$JUHHPHQWV

ZLWKWKH&RPPRQZHDOWKDQG

1%1&RZDVDQRWKHUKLJKOLJKW

IRUWKH\HDU

7KLVIROORZHGRQIURPWKH

VKDUHKROGHUYRWHDWRXU

$QQXDO*HQHUDO0HHWLQJZKLFK

ZDVRYHUZKHOPLQJO\LQIDYRXURI

7HOVWUD¶VSDUWLFLSDWLRQLQWKHUROORXW

RIWKH1%17KH1%1$JUHHPHQWV

DUHQRZLQSODFHDQGZHDUH

ZRUNLQJFORVHO\ZLWK1%1&RLQ

LPSOHPHQWLQJWKHP7HOVWUDKDV

DOVRODXQFKHGUHWDLODQGZKROHVDOH

VHUYLFHVRYHUWKH

1%1IROORZLQJVXFFHVVIXOWULDOV

LQWKHHDUO\UHOHDVHVLWHV

2012 HIGHLIGHTS

7RWDOUHYHQXHIRUWKH¿VFDO

\HDULQFUHDVHGE\SHUFHQWWR

ELOOLRQZKLOHQHWSUR¿WDIWHU

WD[LQFUHDVHGE\SHUFHQWWR

ELOOLRQ7KHUHDUHDQXPEHU

RIKLJKOLJKWVWKDWFRQWULEXWHG

WRWKLVUHVXOW

:HUHFRUGHGRQHRIRXUEHVW

HYHU\HDUVLQPRELOHV:HDGGHG

PLOOLRQGRPHVWLFPRELOH

FXVWRPHUVDQGPRELOHUHYHQXH

JUHZSHUFHQWWRELOOLRQ

:HDUHDOVRFKDQJLQJWKHZD\WKDW

ZHLQWHUDFWZLWKRXUFXVWRPHUV

:KLOHWKHUHLVPRUHZRUNWRGRLQ

WKLVDUHDWKHSRVLWLYHUHVSRQVHWR

WKHPDQ\QHZFXVWRPHUVHUYLFH

LQLWLDWLYHVZHKDYHLQWURGXFHG

VKRZVZHDUHPDNLQJSURJUHVV

:HKDYHFRQWLQXHGWRORRNIRU

ZD\VWRLPSURYHDQGVLPSOLI\RXU

EXVLQHVV,QLWLDWLYHVOLNHRXURQOLQH

DQGHOHFWURQLFELOOVHUYLFHVDOORZ

XVWRVDYHFRVWVZKLOHLPSURYLQJ

FXVWRPHUVDWLVIDFWLRQ

2XUJURZWKLQLWLDWLYHVRI1HWZRUN

$SSOLFDWLRQDQG6HUYLFHV

0HGLDDQG,QWHUQDWLRQDOFRQWLQXH

WREXLOGRQRXUFRUHEXVLQHVV

CHAIRMAN AND CEO

D&KLHI6XVWDLQDELOLW\2I¿FHWR

VXSSRUWWKHFRPSDQ\LQUHVSRQGLQJ

WRWKHFRPPXQLW\¶VFKDQJLQJ

H[SHFWDWLRQV:HDUHSOHDVHGZLWK

the progress we have made on our

VXVWDLQDELOLW\DJHQGD2XUDPELWLRQ

LVWREULQJVRFLDODQGHQYLURQPHQWDO

FRQVLGHUDWLRQVLQWRWKHKHDUWRIRXU

EXVLQHVVLQZD\VWKDWFUHDWHYDOXH

IRUVKDUHKROGHUVZKLOHEHQH¿WWLQJDOO

VWDNHKROGHUV

2XU&KLHI6XVWDLQDELOLW\2I¿FHLV

IRFXVVHGRQWKUHHNH\FKDOOHQJHV

helping our most vulnerable

FXVWRPHUVDQGFRPPXQLWLHVWR

LQWHUDFWVDIHO\DQGFRQQHFWLQ

WKHGLJLWDOZRUOGHQJDJLQJDQG

equipping our employees to build

VXVWDLQDELOLW\WKLQNLQJEHKDYLRXU

DQGSUDFWLFHVLQWRWKHLUHYHU\GD\

ZRUNDQGGHYHORSLQJDQHQWHUSULVH

wide environmental strategy and

FXVWRPHUYDOXHSURSRVLWLRQDVSDUW

RIRXUFRPPLWPHQWWRGHPRQVWUDWH

HQYLURQPHQWDOOHDGHUVKLS

7KLV\HDUZHFHOHEUDWHG\HDUVRI

the Telstra Foundation, with over

PLOOLRQGRQDWHGLQVXSSRUWRI

SURMHFWVDFURVV$XVWUDOLDRYHU

WKHSDVWGHFDGH

ZHZRUNHGZLWKRYHU

FRPPXQLW\RUJDQLVDWLRQVDFURVV

$XVWUDOLDWRGHOLYHUPLOOLRQ

RISURGXFWVDQGVHUYLFHVWKDW

KHOSGLVDGYDQWDJHG$XVWUDOLDQV

UHPDLQFRQQHFWHG:HLQFUHDVHG

RXU7HOVWUD*URXSHPSOR\HH

HQJDJHPHQWVFRUHIURP

SHUFHQWWRSHUFHQW

DQGZHUHGXFHGRXUFDUERQ

HPLVVLRQVLQWHQVLW\E\SHUFHQW

OUTLOOK*

/RRNLQJDKHDGZHH[SHFWWKH

EXVLQHVVZLOOFRQWLQXHWRJURZ

LQ¿VFDO:HDUHIRUHFDVWLQJ

ORZVLQJOHGLJLWWRWDOLQFRPHDQG

(%,7'$JURZWKZLWKIUHHFDVKÀRZ

EHWZHHQDQGELOOLRQ

next two years as we plan to invest

LQRXUPRELOHQHWZRUNDQGLQWKH

GHOLYHU\RILQIUDVWUXFWXUHWR1%1&R

LQRUGHUWREULQJIRUZDUGEHQH¿WV

IURPWKH1%1DJUHHPHQWV

$VDQQRXQFHGLQ2FWREHU

LWLVWKHFRPSDQ\¶VLQWHQWLRQWR

PDLQWDLQDFHQWIXOO\IUDQNHG

GLYLGHQGIRU¿VFDO7KLVLV

VXEMHFWWRWKH%RDUG¶VQRUPDO

DSSURYDOSURFHVVIRUGLYLGHQG

GHFODUDWLRQDQGWKHUHEHLQJQR

XQH[SHFWHGPDWHULDOHYHQWV

:HDUHFRQ¿GHQWZHKDYHWKH

ULJKWVWUDWHJ\LQSODFHDQGZH

DUHFRPPLWWHGWRGHOLYHULQJRQLW

v

&DWKHULQH%/LYLQJVWRQH$2

Chairman

David Thodey

&KLHI([HFXWLYH2I¿FHU

*XLGDQFHDVVXPHVZKROHVDOHSURGXFWSULFHVWDELOLW\QR LPSDLUPHQWVWRLQYHVWPHQWVDQGH[FOXGHVDQ\SURFHHGV RQWKHVDOHRIEXVLQHVVHVDQGWKHFRVWRIVSHFWUXP SXUFKDVHV7KHIRUHLJQH[FKDQJHLPSDLUPHQWRQ 7HOVWUD&OHDUH[SHFWHGRQFRPSOHWLRQLVDOVRH[FOXGHG

Z

DUHFRPPLWWHGWRGHOLYHULQJRQ

David Thodey

BOARD OF

DIRECTORS

CATHERINE B LIVINGSTONE

$2%$+RQV+RQ'6F0XUGRFK +RQ'%XV0DFTXDULH)&$)76()$,&'

0V/LYLQJVWRQHMRLQHG7HOVWUD

DVDQRQH[HFXWLYH'LUHFWRULQ

1RYHPEHUDQGZDVDSSRLQWHG

DV&KDLUPDQLQ0D\6KHLV

WKH&KDLUPDQRIWKH1RPLQDWLRQ

&RPPLWWHHDQGDPHPEHURI

WKH$XGLW5HPXQHUDWLRQDQG

7HFKQRORJ\&RPPLWWHHV

6KHZDVDPHPEHURIWKH

1%1'XH'LOLJHQFH&RPPLWWHH

ZKLOVWLWZDVRSHUDWLYH

DAVID I THODEY

%$)$,&'

0U7KRGH\EHFDPH&KLHI

([HFXWLYH2I¿FHUDQGDQ

H[HFXWLYH'LUHFWRULQ0D\

TIMOTHY Y CHEN

%6F$SSOLHG0DWKHPDWLFV06F &RPSXWHU6FLHQFH0DWKHPDWLFV0%$

0U&KHQMRLQHGWKH7HOVWUD%RDUG

DVDQRQH[HFXWLYH'LUHFWRULQ$SULO

+HLVDPHPEHURIWKH$XGLW

Committee.

GEOFFREY A COUSINS

0U&RXVLQVMRLQHG7HOVWUDDVD

QRQH[HFXWLYH'LUHFWRULQ1RYHPEHU

+HLVDPHPEHURIWKH

1RPLQDWLRQDQG5HPXQHUDWLRQ

Committees.

RUSSELL A HIGGINS

$2%(F)$,&'

0U+LJJLQVMRLQHGWKH7HOVWUD%RDUG

DVDQRQH[HFXWLYH'LUHFWRULQ

6HSWHPEHU+HLVDPHPEHU

RIWKH$XGLW&RPPLWWHH+HZDVD

PHPEHURIWKH1%1'XH'LOLJHQFH

&RPPLWWHHZKLOVWLWZDVRSHUDWLYH

JOHN P MULLEN

0U0XOOHQMRLQHG7HOVWUDDVD

QRQH[HFXWLYH'LUHFWRULQ-XO\

+HLVWKH&KDLUPDQRIWKH

5HPXQHUDWLRQ&RPPLWWHHDQG

DPHPEHURIWKH1RPLQDWLRQ

Committee.

'U6FKHLQNHVWHOMRLQHG7HOVWUDDV

DQRQH[HFXWLYH'LUHFWRULQ$XJXVW

6KHLV&KDLUPDQRIWKH$XGLW

&RPPLWWHHDQGZDV&KDLUPDQRI

WKH1%1'XH'LOLJHQFH&RPPLWWHH

ZKLOVWLWZDVRSHUDWLYH

MARGARET L SEALE

BA, GAICD

0V6HDOHMRLQHGWKH7HOVWUD

%RDUGDVDQRQH[HFXWLYH

'LUHFWRULQ0D\

'U6WRFNHUMRLQHG7HOVWUDDVD

QRQH[HFXWLYH'LUHFWRULQ2FWREHU

+HLVDPHPEHURIWKH$XGLW

DQG7HFKQRORJ\&RPPLWWHHV

DQGVHUYHGDV&KDLUPDQRIWKH

$XGLW&RPPLWWHHIURP'HFHPEHU

XQWLO-XQH+HZDVD

PHPEHURIWKH1%1'XH'LOLJHQFH

&RPPLWWHHZKLOVWLWZDVRSHUDWLYH

0U9DPRVMRLQHGWKH7HOVWUD%RDUG

DVDQRQH[HFXWLYH'LUHFWRULQ

6HSWHPEHU+HLVDOVRD

PHPEHURIWKH1RPLQDWLRQDQG

5HPXQHUDWLRQ&RPPLWWHHV

JOHN D ZEGLIS

%6F)LQDQFH-'/DZ

0U=HJOLVMRLQHG7HOVWUDDV

DQRQH[HFXWLYH'LUHFWRULQ

0D\+HLV&KDLUPDQ

RIWKH7HFKQRORJ\&RPPLWWHH

vii 3LFWXUHGOHIWWRULJKW7LPRWK\&KHQ-RKQ0XOOHQ1RUD6FKHLQNHVWHO-RKQ=HJOLV-RKQ6WRFNHU$2 &DWKHULQH/LYLQJVWRQH$2'DYLG7KRGH\5XVVHOO+LJJLQV$2*HRIIUH\&RXVLQV0DUJDUHW6HDOH6WHYHQ9DPRV

WHO

WE ARE

TELSTRA IS A COMPANY

OF CONNECTIONS. EVERY

DAY WE HELP MILLIONS OF

AUSTRALIANS CONNECT TO

THE PEOPLE AND THINGS

THAT MATTER MOST TO THEM.

:HEHOLHYHWKHPRUHFRQQHFWHG

SHRSOHDUHWKHPRUHRSSRUWXQLWLHV

WKH\KDYH7KDW¶VZK\ZHEXLOG

WHFKQRORJ\DQGFRQWHQWVROXWLRQV

WKDWDUHVLPSOHDQGHDV\WRXVH

±LQFOXGLQJ$XVWUDOLD¶VODUJHVW

IXOO\LQWHJUDWHG,3QHWZRUNDQG

$XVWUDOLD¶VODUJHVWDQGIDVWHVW

QDWLRQDOPRELOHEURDGEDQGQHWZRUN

$V$XVWUDOLD¶VOHDGLQJ

WHOHFRPPXQLFDWLRQVDQG

LQIRUPDWLRQVHUYLFHVFRPSDQ\

7HOVWUDLVSURXGWREHKHOSLQJ

RXUFXVWRPHUVLPSURYHWKH

ZD\VLQZKLFKWKH\OLYHDQG

ZRUNWKURXJKFRQQHFWLRQ

INDUSTRY

CONTEXT

CONNECTIVITY IS DRIVING

AN EXPLOSION IN DEMAND

ON OUR NETWORKS.

7UHQGVVXFKDVWKHJURZWKLQWKH

LQWHUQHWGLJLWLVDWLRQRIFRQWHQWDQG

RXULQVDWLDEOHQHHGWRFRPPXQLFDWH

HYHU\GD\DUHFKDQJLQJRXUOLYHV

DQGWKHLQGXVWU\

:HZLOOFRQWLQXHWREXLOGRQWKH

VWUHQJWKVRIRXUQHWZRUNRIIHULQJ

QHZSURGXFWVDQGVHUYLFHVDQG

SXWWLQJWKHQHHGVRIRXUFXVWRPHUV

¿UVW:HDUHFRQ¿GHQWZHKDYHWKH

ULJKWVWUDWHJ\DQGZHDUHGHOLYHULQJ

RQWKDWVWUDWHJ\

OUR

BUSINESS

OUR VISION IS TO IMPROVE

THE WAY PEOPLE LIVE

AND WORK.

:HDLPWREHRQHRIWKHPRVW

admired, respected and trusted

WHOHFRPPXQLFDWLRQFRPSDQLHV

LQWKHZRUOG7HOVWUDLVFKDQJLQJ

:HDUHEXLOGLQJDQHZFRPSDQ\

IURPWKHLQVLGHRXWEDVHGRQIRXU

VWUDWHJLFSULRULWLHVRILPSURYLQJ

FXVWRPHUVDWLVIDFWLRQUHWDLQLQJ

DQGJURZLQJRXUFXVWRPHUQXPEHUV

VLPSOLI\LQJWKHEXVLQHVVDQG

GHYHORSLQJQHZJURZWKEXVLQHVVHV

SUSTAINABILITY IS EMBEDDED

IN OUR APPROACH TO OUR

CUSTOMERS, OUR PEOPLE,

OUR COMMUNITIES,

AND OUR ENVIRONMENT.

$W7HOVWUDVXVWDLQDELOLW\LVD

EXVLQHVVDSSURDFKWKDWFUHDWHV

ORQJWHUPYDOXHE\HPEUDFLQJ

WKHRSSRUWXQLWLHVDQGPDQDJLQJ

WKHULVNVGHULYHGIURPHFRQRPLF

HQYLURQPHQWDOVRFLDODQG

WHFKQRORJLFDOGHYHORSPHQWV

6XVWDLQDELOLW\LVDQLPSRUWDQW

SDUWRIKRZZHZLOODFKLHYH

RXUYLVLRQWRLPSURYHWKHZD\

SHRSOHOLYHDQGZRUN

STRATEGIC OVERVIEW

AND PRIORITIES

SUSTAINABILITY

IMPROVE

CUSTOMER

SATISFACTION

RETAIN

AND GROW

CUSTOMER

NUMBERS

SIMPLIFY

THE

BUSINESS

DEVELOP

NEW GROWTH

BUSINESSES

ix

OUR

IMPROVE CUSTOMER

SATISFACTION

WE WANT OUR CUSTOMERS

TO BECOME OUR GREATEST

ADVOCATES. TO ACHIEVE THAT,

WE HAVE TO WIN AND RETAIN

THE TRUST OF OUR CUSTOMERS

– ONE CUSTOMER AT A TIME.

3XWWLQJWKHFXVWRPHUDWWKHFHQWUH

RIHYHU\WKLQJZHGRDW7HOVWUDKDV

EHFRPHFULWLFDOWRWKHZD\ZH

ZRUNDQGWKHGHFLVLRQVZHPDNH

$VSDUWRIWKLVMRXUQH\ZHKDYH

EHHQORRNLQJDWZD\VZHFDQ

PDNHOLIHEHWWHUDQGVLPSOHUIRU

RXUFXVWRPHUVDQGZHDUH

PDNLQJSURJUHVV

2YHUWKHSDVWWZHOYHPRQWKVZH

KDYHLQWURGXFHGXVDJHDOHUWVWR

KHOSFRQVXPHUFXVWRPHUVEHWWHU

PDQDJHWKHLUPRELOHVSHQG

&XVWRPHUVFDQQRZJHWRQOLQH

VHUYLFHVXSSRUWKRXUVDGD\

VHYHQGD\VDZHHNWKURXJKWKHXVH

RIVRFLDOPHGLDVHUYLFHVLQFOXGLQJ

)DFHERRNDQG/LYH&KDW

&XVWRPHUVFDQDOVRFRQQHFW

ZLWKXVRQOLQHYLDRQHRIWKLUWHHQ

DSSOLFDWLRQVZHKDYHGHYHORSHGIRU

iPad

^

L3KRQH

^

and Android devices.

$VDUHVXOWRIWKHVHDQGRWKHU

VHUYLFHLPSURYHPHQWVZHKDYH

seen a 6 per cent improvement

LQFXVWRPHUVDWLVIDFWLRQVXUYH\V

IHZHUFDOOVDUHEHLQJPDGHWRRXU

FDOOFHQWUHVDQGZHKDYHVHHQD

UHGXFWLRQLQ/HYHOFRPSODLQWVWR

WKH7HOHFRPPXQLFDWLRQV,QGXVWU\

2PEXGVPDQ

7KHUHVWLOOUHPDLQVDORWWRGREXW

HDFKGD\ZHFRQWLQXHWRFKDQJH

KRZZHLQWHUDFWZLWKRXUFXVWRPHUV

OUR GOAL:

TO DELIVER OUR

CUSTOMERS A GREAT SERVICE

EXPERIENCE. TO CONTINUE TO

WORK HARD TO MAKE SURE THAT

OUR CUSTOMERS ARE AT THE

CENTRE OF EVERYTHING WE DO

xi

SYSTEM (NPS) WHICH IS THE

NEXT STAGE IN IMPROVING

CUSTOMER SATISFACTION.

136ZLOOKHOSGULYHLQQRYDWLRQ

continuous improvement and

EHKDYLRXUFKDQJHVDOODLPHG

DWHQKDQFLQJWKHFXVWRPHU

H[SHULHQFH2XUDLPLVWRGHOLJKW

RXUFXVWRPHUVDQGWXUQWKHPLQWR

advocates.

ONLINE SERVICES ARE NOW

AVAILABLE TO OUR CUSTOMERS

24 HOURS A DAY, SEVEN DAYS A

WEEK.

/DVW\HDUSHUFHQWRI7HOVWUD¶V

FXVWRPHUVHUYLFHWUDQVDFWLRQVZHUH

FRPSOHWHGRQOLQHIROORZLQJWKH

ODXQFKRIVHYHUDONH\RQOLQHVHUYLFH

FDSDELOLWLHV

FACEBOOK 24X7

&XVWRPHUVFDQLQWHUDFWZLWK

FXVWRPHUVHUYLFHFRQVXOWDQWVE\

SRVWLQJRQWKH)DFHERRNZDOORU

E\XVLQJWKH/LYH&KDWIHDWXUHWR

FKDWWRDFRQVXOWDQWRQOLQH:HDLP

WRUHVSRQGWRDOO)DFHERRNSRVWV

ZLWKLQWKHKRXU

:HKDYHODXQFKHG&URZG6XSSRUW

DQRQOLQHFRPPXQLW\IRUXPDLPHG

DWH[WHQGLQJWKHUDQJHRIFXVWRPHU

service options.

/LQNLQJIURPWHOVWUDFRPLW¶VDSODFH

ZKHUHFRQVXPHUDQGEXVLQHVV

FXVWRPHUVFDQKHOSHDFKRWKHU

ZLWKLQIRUPDWLRQDERXW7HOVWUD¶V

SURGXFWVDQGVHUYLFHVVKDUHWLSV

DQGH[SHULHQFHVRUGLVFXVVQHZ

DQGXSFRPLQJUHOHDVHV

APPLICATIONS

iPad

^

L3KRQH

^

and Android

FXVWRPHUVQRZKDYHWKHDELOLW\WR

PRQLWRUFRQWURODQGPRGLI\WKHLU

DFFRXQWIURPWKHLUGHYLFHDVHUYLFH

ZKLFKZDVSUHYLRXVO\RQO\RIIHUHG

WKURXJKDGHVNWRSFRPSXWHU

ZZZWHOVWUDFRPDSSV

7HOVWUDKDVLQWURGXFHGWKH1HW 3URPRWHU6\VWHPDVWKHQH[WVWDJHLQ LPSURYLQJFXVWRPHUVDWLVIDFWLRQ:H ZDQWWRWXUQFXVWRPHUVLQWRDGYRFDWHV E\JLYLQJWKHPWKHEHVWSRVVLEOH VHUYLFH(YHU\GD\ZHUHFHLYHDURXQG SLHFHVRIIHHGEDFNIURPRXU FXVWRPHUVWKDWRXUVWDIIDQGSDUWQHUV OLVWHQWRDQGOHDUQIURP 7KLVLVRQHRIWKHELJJHVWFKDQJH SURJUDPPHVHYHUXQGHUWDNHQE\ 7HOVWUD:HKDYHDVNHGHYHU\7HOVWUD HPSOR\HHWRWUHDWRXUFXVWRPHUVWKH ZD\WKH\ZRXOGOLNHWREHWUHDWHG WKHPVHOYHV

RETAIN AND GROW

CUSTOMER NUMBERS

WE ARE GRATEFUL FOR

THE MANY CUSTOMERS

WHO CHOSE TELSTRA THIS

YEAR. THE QUALITY OF OUR

NETWORKS AND SERVICE IS A

KEY DIFFERENTIATOR AND IS

CONTINUING TO DRIVE GROWTH

IN OUR BUSINESS.

7HOVWUD¶VSURGXFWRIIHUVDQGQHWZRUN

investments continued to attract

QHZFXVWRPHUVGXULQJWKH\HDU

:HUHFRUGHGRQHRIRXUEHVWHYHU

\HDUVLQPRELOHVZLWKPLOOLRQ

GRPHVWLFPRELOHFXVWRPHUVDGGHG

2YHUWKHSDVWWZR\HDUVZHKDYH

DFTXLUHGRYHUWKUHHPLOOLRQGRPHVWLF

PRELOHFXVWRPHUV

7KHEUHDGWKDQGTXDOLW\RIVHUYLFH

RXUFXVWRPHUVHQMR\ZKHQXVLQJ

our Next G

®

PRELOHQHWZRUN

FRQWLQXHVWRSURYLGHXVZLWKDQ

important competitive advantage.

2XUFRPSHWLWLYHEXQGOHGSODQVKDYH

DOVRVHHQDQLQFUHDVHLQRXU¿[HG

UHWDLOEURDGEDQGFXVWRPHUEDVH

ZLWKFXVWRPHUVDGGHG

ODVW¿VFDO\HDU:HQRZKDYH

PRUHWKDQPLOOLRQFXVWRPHUV

RQDEXQGOHGSODQ

AUSTRALIANS NOW HAVE

ACCESS TO ONE OF THE WORLD’S

MOST ADVANCED MOBILE

NETWORKS DELIVERING

SOME OF THE FASTEST

MOBILE SPEEDS AVAILABLE.

,Q6HSWHPEHUZHZHUHWKH

¿UVW$XVWUDOLDQFRPSDQ\WRODXQFKD

FRPPHUFLDO*/7(PRELOHQHWZRUN

*PRELOHEURDGEDQGSURYLGHV

VXSHUIDVWWUXO\PRELOHLQWHUQHW

DFFHVVJLYLQJ\RXWKHIUHHGRPWR

YLVLWPRUHSODFHVDQGNHHSLQWRXFK

2XU*QHWZRUNQRZFRYHUVPRUH

WKDQSHUFHQWRIWKH$XVWUDOLDQ

SRSXODWLRQ2YHUWKHQH[WWZR\HDUV

ZHZLOOEHPDNLQJDQDGGLWLRQDO

LQYHVWPHQWWRDFFHOHUDWHWKHUROO

RXWRIRXU*QHWZRUN

OUR GOAL:

RETAIN AND GROW

OUR CUSTOMER NUMBERS

TO DRIVE REVENUE GROWTH

AND LONG TERM VALUE FOR

OUR SHAREHOLDERS

xiii

$3.4b

7RZQVYLOOHPXP-XOLH%R[VHOOLV FRPSOHWHO\VROGRQWKHKLJKVSHHG¿EUH RSWLFQHWZRUN ³,W¶VOLNHWKH:ULJKWEURWKHUVFRPSDUHG WRWKHMXPERMHW,W¶VVRPXFKEHWWHUVR PXFKPRUHVWDEOHDQGVRPXFKIDVWHU ,W¶VZRQGHUIXO´VDLG-XOLH -XOLHVD\VVKHKDGEHFRPHDSUROL¿FXVHU RI7HOVWUD¶VVHUYLFHVRQWKH1%1UDQJLQJ IURPGRZQORDGLQJUHFLSHVRQKHU7+XE® WRXVLQJWKH7%R[®_{DVDYLGHRMXNHER[} IRUKHUKXVEDQG¶VWKELUWKGD\SDUW\ ³7KHVHGD\V,KDYHWKUHH\RXQJFKLOGUHQ DQGWZRFRPSXWHUVXSVWDLUVDQGD7%R[®_. ,W¶VQRWXQFRPPRQIRUP\KXVEDQGWR EHZDWFKLQJDKRUVHUDFLQJFKDQQHORQ 7%R[®_{IRUPHVXU¿QJWKHQHWDQGIRU} WKHNLGVWREHRQWKHFRPSXWHUZDWFKLQJ &OXE3HQJXLQDQGWKHUH¶VQHYHUDKLWFK 7KHUHZDVQRZD\,FRXOGGRWKDWEHIRUH´ VKHVDLG -XOLHXVHVWKH7%R[®_DVWKHSULPDU\ HQWHUWDLQPHQWUHPRWHFRQWURO ³,W¶VDEVROXWHO\EULOOLDQW7KH79JHWV WXUQHGRQDQGLWDOOFRPHVWKURXJKWKH 7%R[®_{7KHUHPRWHFRQWUROLVLQWXLWLYH} DQGLWLVVRHDV\DQGVLPSOH,WKDV WDNHQRYHUP\'9'P\KDUGGULYHDQG HYHU\WKLQJHOVH ³,ORYHDOOWKHVWXII,FDQGRZLWKLW,ORYH EHLQJDEOHWRUHQWPRYLHVDQGDPLQXWH ODWHU,FDQEHZDWFKLQJLW,ORYHWKDW, FDQJHW<RX7XEH,QWKHROGGD\VZKHQ ZHKDG$'6/,JDYHXSRQ<RX7XEH EHFDXVH,FRXOGQ¶WZDWFKDYLGHREHFDXVH RIDOOWKHVWRSVDQGVWDUWV%XWQRZ,FDQ ZDWFKWKLQJVLQVWDQWO\´VKHVDLG :KHQ-XOLHDQGKHUIDPLO\FHOHEUDWHG KHUKXVEDQG¶VWKELUWKGD\WKH\VSHQW WKHHYHQLQJGRZQORDGLQJVRQJVDQG ZDWFKLQJOLYHSHUIRUPDQFHVRQ <RX7XEHYLDWKHLU7%R[®_. ³,WZDVVRIDVW7KHUHZDVQHYHUDKLFFXS :HGLGQ¶WKDYHWRZDLWDWDOO´VKHVDLG -XOLHLVDOVRVROGRQ7HOVWUD¶VFXVWRPHU

service and customer support.

³,¶YHWULHGHOVHZKHUHEXW,KDYHDOZD\V FRPHEDFNWR7HOVWUD,FDQWUXVWWKH SURGXFW7KH\VWDQGEHKLQGLW,I,KDYH DQLVVXHZLWKWKHKDUGZDUHWKH\KHOS PHZLWKLW,WMXVWVHHPVQDWXUDOWRPH WRKDYHWKDWFRQWLQXHDQGMXVWKDYH RQHELOO´VKHVDLG 3LFWXUHG-XOLH%R[VHOOXVLQJ7HOVWUD¶V7+XE®-XOLH%R[VHOOUHFHLYHG7HOVWUDVHUYLFHVRQWKH1%1RQ7HOVWUD¶VIDVWHVWSODQVIRUIUHHGXULQJWKHWULDO

SIMPLIFY THE BUSINESS

SIMPLIFYING THE BUSINESS

IS A COMPANY-WIDE PROJECT

THAT HAS HELPED CHANGE

TELSTRA’S CULTURE.

:HDUHFUHDWLQJDQHZ7HOVWUD±D

7HOVWUDWKDWLVDERXWVLPSOLFLW\DQG

VHUYLFH,IWKHEXVLQHVVLVVLPSOHU

WKHQZHDUHIRFXVLQJRQWKHULJKW

WKLQJVQRWZDVWLQJWLPHRQWKH

WKLQJVWKDWGRQRWPDWWHUWR

our customers.

2XUSHRSOHQRZXQGHUVWDQGWKH

QHHGWRIRFXVRQVLPSOLI\LQJWKH

ZD\ZHRSHUDWHLPSURYLQJWKH

ZD\WKDWZHVHUYHRXUFXVWRPHUV

DQG¿QGLQJZD\VWRVDYHWLPH

DQGPRQH\

:HVHHVLJQL¿FDQWRSSRUWXQLW\

to provide innovative support to

RXUFXVWRPHUVXVLQJQHZGLJLWDO

WHFKQRORJ\DQGVHUYLFHV

,QDGGLWLRQWRWKHLPSURYHPHQWV

ZHKDYHPDGHRQOLQHZHKDYH

FHQWUDOLVHGRXUPDUNHWLQJSULFLQJ

product management and product

LQQRYDWLRQEXVLQHVVHV:HKDYH

DOVRUDWLRQDOLVHGDQGVWUHDPOLQHG

FRUSRUDWHFHQWUHIXQFWLRQV

7KHHQGUHVXOWLVJUHDWHUHI¿FLHQF\

IRURXUFRPSDQ\DQGRXUFXVWRPHUV

OUR GOAL:

SIMPLIFY

THE BUSINESS, IMPROVE

CUSTOMER SERVICE AND

SAVE UNNECESSARY COSTS

xv 7KLV\HDUZHUHYDPSHGRXU ZHEVLWHHQKDQFLQJQDYLJDWLRQ DQGVHDUFKIXQFWLRQVWRGHOLYHU DQRYHUDOOLPSURYHPHQWLQWKH customer experience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organising and managing 7HOVWUDLQYRLFHVHDVLHU 7$QDO\VWDOORZVFXVWRPHUV JUHDWHUFRQWUROZKLOHVDYLQJWLPH DVWKH\FDQQRZUHYLHZKLVWRULFDO ELOOLQIRUPDWLRQRQFHDFFUXHG JHQHUDWHUHSRUWVWKDWVXPPDULVH ELOOLQJGDWDDFURVVPXOWLSOH LQYRLFHVDQGELOOLQJSHULRGVDQG YLHZWUHQGUHSRUWVRQKLVWRULFDO WHOHFRPPXQLFDWLRQFRVWV 7$QDO\VWKDVEHHQZHOOUHFHLYHG E\FXVWRPHUVDQGLVDQLQLWLDWLYH DOLJQHGWRRXUFRQWLQXHGIRFXV RQVLPSOL¿FDWLRQDQGFXVWRPHU VDWLVIDFWLRQ :HQRZKDYHRYHUPLOOLRQ FXVWRPHUVUHFHLYLQJWKHLUELOO LQDGLJLWDOIRUPDW &XVWRPHUVFDQUHFHLYHWKHLU ELOOYLDDQHPDLOHG3')RQOLQH WKURXJK0\$FFRXQWRUXVLQJ RQHRIWKH7HOVWUDDSSVWKURXJK an iPad^_L3KRQH^ _{or Android} GHYLFH)URPDQ\RIWKHGLJLWDO ELOOIRUPDWVFXVWRPHUVDUHHDVLO\ DEOHWRQDYLJDWHWKURXJKWR SD\PHQW :HDOVRRIIHUDGXDOELOO SURJUDPPHIRUWKRVHFXVWRPHUV ZKRDUHSODQQLQJDPRYHWR GLJLWDOELOOVVRWKH\FDQEHFRPH IDPLOLDUZLWKUHFHLYLQJWKHLUELOO GLJLWDOO\EHIRUHVZLWFKLQJRII WKHLUSDSHUELOOV

DEVELOP NEW

GROWTH BUSINESSES

WE ARE LOOKING TO GROW THE

TELSTRA BUSINESS, NOT JUST

PROTECT OUR CURRENT MARKET

SHARE.

'HYHORSLQJWKHJURZWKEXVLQHVVHV

RI1HWZRUN$SSOLFDWLRQVDQG

6HUYLFHV0HGLDDQG,QWHUQDWLRQDOLV

DNH\SLOODURI7HOVWUD¶VVWUDWHJ\

1HWZRUN$SSOLFDWLRQVDQG6HUYLFHV

1$6LVJURZLQJEHFDXVHLWFDQ

PDNHDQHQRUPRXVGLIIHUHQFH

WREXVLQHVVHV±LQFUHDVLQJ

SURGXFWLYLW\ORZHULQJFRVWV

UHGXFLQJULVNDQGFUHDWLQJQHZ

SODWIRUPVIRULQQRYDWLRQ

7HOVWUD0HGLDZDVHVWDEOLVKHGWR

GULYHJURZWKIURPRXUPHGLDDVVHWV

DQGPDQDJHWKHWUDQVLWLRQWRGLJLWDO

DWRXU6HQVLVGLUHFWRULHVEXVLQHVV

7KLVJURXSLVUHVSRQVLEOHIRUWKH

PDQDJHPHQWDQGJURZWKRIWKH

domestic directories and advertising

EXVLQHVVDQGLQFOXGHVWKH

PDQDJHPHQWRIOHDGLQJLQIRUPDWLRQ

EUDQGVLQFOXGLQJ<HOORZ3DJHV

®

,

:KLWH3DJHV

®

, and our investment

LQ'LJLWDO0HGLDFRQWHQWDQGWKH

)2;7(/SDUWQHUVKLS

:HUHFHQWO\DQQRXQFHGDQ

H[FOXVLYHDUUDQJHPHQWZLWK

MOG, a next generation music

VXEVFULSWLRQVHUYLFH02*JLYHV

VXEVFULEHUVDFFHVVWRPLOOLRQ

PXVLFWUDFNV7KHKLJKTXDOLW\

VWUHDPLQJPXVLFVHUYLFHLVDYDLODEOH

WKURXJKFRPSDWLEOH3&VGLJLWDO

PXVLFSOD\HUV$SSOHDQG$QGURLG

VPDUWSKRQHVWDEOHWVDQGZLUHOHVV

+L)LV\VWHPV3DUWQHULQJZLWK

FRPSDQLHVVXFKDV02*DOORZV

XVWRRIIHUFXVWRPHUVFRPSHOOLQJ

FRQWHQWWRVXLWWKHLUQHHGV

7HOVWUD,QWHUQDWLRQDOHQFRPSDVVHV

RXULQWHUQDWLRQDODVVHWVRXWVLGH

$XVWUDOLDDQG1HZ=HDODQG,W

LQFOXGHVOHDGLQJ+RQJ.RQJPRELOH

RSHUDWRU&6/RXUPDLQODQG&KLQD

EXVLQHVVHVZKLFKSURYLGHGLJLWDO

media services in auto, IT and

FRQVXPHUHOHFWURQLFVDQG7HOVWUD

*OREDORXUJOREDOFRQQHFWLYLW\

EXVLQHVV

2XULQWHUQDWLRQDOEXVLQHVVHV

FRQWLQXHWRSHUIRUPZHOO2XU+RQJ

.RQJVXEVLGLDU\&6/DGGHG

QHZPRELOHFXVWRPHUVODVW

¿VFDO\HDUDQGJUHZUHYHQXHE\

SHUFHQWLQORFDOFXUUHQF\

OUR GOAL:

TO DEVELOP

GROWTH BUSINESSES IN

THE AREAS OF NETWORK

APPLICATIONS AND SERVICES,

MEDIA AND INTERNATIONAL

xvii

COCA-COLA AMATIL

(CCA), ONE OF THE

WORLD’S TOP FIVE

COCA-COLA BOTTLERS,

IS A TRUE NAS

CUSTOMER.

6LQFHVLJQLQJDWHQ\HDUDJUHHPHQW ZLWK7HOVWUDLQ&&$KDVJRQHRQ WRGHSOR\VXFKLQQRYDWLRQVDV&DVKOHVV 3D\PHQWVYLD7HOVWUD¶V0DFKLQHWR 0DFKLQHVROXWLRQDQGPRVWUHFHQWO\ D'LJLWDO0HGLD6WUDWHJ\WKDWKDV GHOLYHUHGUHYHQXHLQFUHDVHVXSZDUGVRI

50 per cent in some venues.

8QGHUSLQQLQJWKLVLVWKHUHOLDELOLW\RI 7HOVWUD¶VQHWZRUNDVZHOODVLWVHQGWR HQGPDQDJHPHQW7KLVFRPELQDWLRQRI 1HWZRUN$SSOLFDWLRQVDQG6HUYLFHVKDV FRQWULEXWHGPXFKWR&&$¶VJRDORIXVLQJ ,&7WREHFRPHDPRUHSURGXFWLYHDQG WKXVPRUHSUR¿WDEOHEXVLQHVVZKLOVW DOVRGHOLYHULQJJUHDWFXVWRPHUVHUYLFH

SUSTAINABILITY – CONDUCTING

OUR BUSINESS RESPONSIBLY

FOR TELSTRA, SUSTAINABILITY

IS A BUSINESS APPROACH

THAT CREATES LONG-TERM

VALUE BY EMBRACING THE

OPPORTUNITIES AND MANAGING

THE RISKS DERIVED FROM

ECONOMIC, ENVIRONMENTAL,

SOCIAL AND TECHNOLOGICAL

DEVELOPMENTS. SUSTAINABILITY

IS AN IMPORTANT PART OF HOW

WE WILL ACHIEVE OUR VISION

TO IMPROVE THE WAY PEOPLE

LIVE AND WORK.

SUSTAINABILITY GOVERNANCE

7KH7HOVWUD6XVWDLQDELOLW\&RXQFLO

LVWKHNH\JRYHUQLQJERG\IRU

VXVWDLQDELOLW\DW7HOVWUD,WLVFKDLUHG

E\RXU&KLHI([HFXWLYH2I¿FHU

'DYLG7KRGH\DQGFRPSULVHVWKH

*URXS¶V([HFXWLYH/HDGHUVKLS

7HDP7KH&RXQFLOLVUHVSRQVLEOH

IRUWKHUHYLHZDQGPRQLWRULQJRI

7HOVWUD¶VVXVWDLQDELOLW\DSSURDFK

DQGSHUIRUPDQFHDQGQRUPDOO\

PHHWVWKUHHWLPHVD\HDU5HJXODU

reports on progress are provided

WRWKH&KLHI([HFXWLYH2I¿FHU

DQGWKH7HOVWUD%RDUG

7HOVWUD¶V&KLHI6XVWDLQDELOLW\2I¿FHU

SURYLGHVWKHVWUDWHJLFOHDGHUVKLSIRU

VXVWDLQDELOLW\DW7HOVWUDPDQDJHV

WKH&KLHI6XVWDLQDELOLW\2I¿FH

&62ZKLFKZDVHVWDEOLVKHGLQ

ODWHDQGLVUHVSRQVLEOHIRU

WKHLPSOHPHQWDWLRQRIRXUDSSURDFK

DQGSURJUDPPHV'XULQJZH

LQWHJUDWHGNH\IXQFWLRQVIURPDFURVV

7HOVWUDLQWRWKH&62UHFUXLWHGDQG

DSSRLQWHGNH\H[HFXWLYHVDQG

GHYHORSHG7HOVWUD¶V¿UVWLQWHJUDWHG

VXVWDLQDELOLW\DSSURDFKDQG

SHUIRUPDQFHVFRUHFDUG

UNITED NATIONS GLOBAL COMPACT

,Q'HFHPEHU7HOVWUDEHFDPH

DVLJQDWRU\WRWKH8QLWHG1DWLRQV

81*OREDO&RPSDFWVLJQDOOLQJRXU

FRPPLWPHQWWRWKHKLJKHVWOHYHOV

RIUHVSRQVLEOHEXVLQHVVSUDFWLFHLQ

WKHPDUNHWVLQZKLFKZHRSHUDWH

:HDUHFRPPLWWHGWRDOLJQLQJRXU

RSHUDWLRQVDQGVWUDWHJLHVZLWKWHQ

XQLYHUVDOO\DFFHSWHGSULQFLSOHVLQ

WKHDUHDVRIKXPDQULJKWVODERXU

HQYLURQPHQWDQGDQWLFRUUXSWLRQ

2XUFRPPLWPHQWWRWKHVHSULQFLSOHV

and our communication on

SURJUHVVLVUHÀHFWHGLQRXU

VXVWDLQDELOLW\UHSRUWLQJ

OUR GOAL:

TO BRING THE SOCIAL

AND THE ENVIRONMENTAL INTO

THE HEART OF THE ORGANISATION

IN WAYS THAT CREATE VALUE

)LQGRXWPRUH

xix

TELSTRA’S SUSTAINABILITY FRAMEWORK IS BUILT AROUND FIVE KEY PILLARS AND INDICATES

OUR BROAD GOALS AND KEY SUSTAINABILITY ISSUES.

AS AUSTRALIA’S LARGEST TELCO,

WE ARE COMMITED TO KEEPING

THE CUSTOMER AT THE CENTRE

OF EVERYTHING WE DO.

EVERYONE CONNECTED

:HUHFRJQLVHWKHIXQGDPHQWDOUROH

7HOVWUDSOD\VLQSURPRWLQJHFRQRPLF

DQGVRFLDOLQFOXVLRQ2XU

Everyone

Connected

customer programmes

VXSSRUWDURXQGPLOOLRQ

$XVWUDOLDQVHDFK\HDUDQGXWLOLVH

7HOVWUD¶VFRUHFDSDELOLWLHVDVVHWV

H[SHUWLVHDQGQDWLRQDOSUHVHQFHWR

VXSSRUWDFFHVVVNLOOVGHYHORSPHQW

DQGVDIHW\IRUWKRVH$XVWUDOLDQV

and communities most in need.

3URJUDPPHHIIHFWLYHQHVVLV

HQKDQFHGWKURXJKDQLQGHSHQGHQW

DGYLVRU\FRPPLWWHH±7KH/RZ

Income Measure Assessment

Committee (LIMAC) – comprising

UHSUHVHQWDWLYHVIURPQDWLRQDO

FRPPXQLW\RUJDQLVDWLRQVDQG

WKH)HGHUDO*RYHUQPHQW/,0$&

DQQXDOO\DVVHVVHVWKHHIIHFWLYHQHVV

RI7HOVWUD¶VORZLQFRPHSURJUDPPHV

DQGUHSRUWVWRWKH0LQLVWHUIRU

Communications.

Customers experiencing

disadvantage

,QWKH&HQWUHIRU6RFLDO

,PSDFWFRQGXFWHGDVRFLDOLPSDFW

VWXG\RIWKUHHRIRXU

Access for

Everyone

VHUYLFHV,WVKRZHGWKDW

ZKLOHHPHUJHQF\UHOLHIVHUYLFHV

VXFKDV

Bill Assistance

KDYHD

VLJQL¿FDQWSRVLWLYHVRFLDOLPSDFW

WKHUHLVDJDSLQVHUYLFHVIRUSHRSOH

RQDORZLQFRPHZKRUHO\RQDSUH

SDLGPRELOH5HVHDUFKFRQGXFWHG

E\/,0$&DOVRLGHQWL¿HGWKHQHHG

IRUDSUHSDLGUHFKDUJHHPHUJHQF\

UHOLHIVHUYLFHDQGDQDIIRUGDEOH

EURDGEDQGLQWHUQHWVHUYLFHIRUORZ

LQFRPHIDPLOLHVZLWKFKLOGUHQLQ

VFKRRO1H[W\HDUZHZLOOUHVSRQG

WRWKHVH¿QGLQJVE\H[SDQGLQJRXU

Access for Everyone

RIIHULQJ

&XVWRPHUVZLWKGLVDELOLW\

7KLV\HDUZHFRQGXFWHGDPLG

WHUPUHYLHZRIRXU¿IWK

Disability

Action Plan 2010-2012

7KH3ODQ

UHFRJQLVHVWKHEHQH¿WVWKDWPRGHUQ

LQIRUPDWLRQDQGFRPPXQLFDWLRQV

WHFKQRORJLHVEULQJWRSHRSOHZLWK

GLVDELOLW\DQGFRPPXQLFDWLRQV

FKDOOHQJHVDQGLQFRUSRUDWHV

DFWLRQVWRSURYLGHDEHWWHU

H[SHULHQFHIRURXUFXVWRPHUV

ZLWKGLVDELOLW\DQGWKHLUFDUHUV

Customers in remote

Indigenous communities

,QZHFRPSOHWHGWKH

$'6/KLJKVSHHGLQWHUQHW

XSJUDGHVLQIRXUUHPRWH,QGLJHQRXV

FRPPXQLWLHVDQGSDUWQHUHGZLWK

WKH7RUUHV6WUDLW,VODQG5HJLRQDO

&RXQFLOWRGHOLYHU$'6/WR

LVODQGVLQWKH7RUUHV6WUDLW

:HGHYHORSHGVLPSOL¿HGFDOOLQJ

FDUGVIRUXVHLQSD\SKRQHVLQ

UHPRWHFRPPXQLWLHVDQGFDOOV

WRWKHKRWOLQHIRU,QGLJHQRXV

FXVWRPHUVLQFUHDVHGE\

VL[SHUFHQWIURP

OUR GOAL:

TO ENSURE THAT ALL

AUSTRALIANS ENJOY THE EVERYDAY

BENEFITS OF BEING CONNECTED TO

MODERN COMMUNICATION TECHNOLOGIES

SUSTAINABILITY – PUTTING

CUSTOMERS AT THE CENTRE

ODZHQIRUFHPHQWDQGFRPPXQLW\

RUJDQLVDWLRQVWRKHOSRXUFXVWRPHUV

XQGHUVWDQGDQGPDQDJHWKH

ULVNVDVVRFLDWHGZLWKWKHRQOLQH

ZRUOG7KLV\HDUZHUHOHDVHGQHZ

UHVHDUFKLQWRWKHNH\F\EHUVDIHW\

FRQFHUQVIRUSDUHQWVDQGSURYLGHG

DGYLFHRQKRZWRPDQDJHWKHULVNV

WKURXJKSXEOLFDQQRXQFHPHQWV

RXUVRFLDOPHGLDFKDQQHOVDQG

RQRXUZHEVLWH

LVDFRUHSULRULW\DQGZHNQRZWKDW

ZHKDYHWRGREHWWHU:KLOHWKLV

\HDU¶VSULYDF\FRPSODLQWVUHPDLQHG

UHODWLYHO\VWDEOHWKHUHZHUHD

QXPEHURIUHJUHWWDEOHSULYDF\

LQFLGHQWVLQYROYLQJFXVWRPHUGDWD

2XUUHVSRQVHWRWKHVHLQFLGHQWV

ZDVWRLPPHGLDWHO\FRQWDLQWKH

EUHDFKLGHQWLI\WKHVRXUFHQRWLI\

impacted customers and put in

SODFHUHPHGLDODFWLRQV

DQGGHSOR\PHQWSURFHVVHVDQG

FRPPLWWHGWRLPSURYLQJVWDIIWUDLQLQJ

WRHQVXUHWKDWSULYDF\DQGVHFXULW\

FRQWUROVDUHSURSHUO\LPSOHPHQWHG

:HFRQWLQXHWRWDNHDVWURQJ

SURDFWLYHDSSURDFKWRSUHYHQWVXFK

LQFLGHQWVIURPKDSSHQLQJDJDLQ

xxi

CELEBRATING TEN YEARS

OF ACCESS FOR EVERYONE

7KLV\HDUPDUNVWKHWHQWKDQQLYHUVDU\RI

our Access for Everyone programmes,

ZKLFKDVVLVWSHRSOHRQDORZLQFRPHRU IDFLQJ¿QDQFLDOKDUGVKLSWRVWD\FRQQHFWHG 6LQFHZHKDYHSURYLGHGEHQH¿WVWR WKHYDOXHRIWZRELOOLRQGROODUVDVSDUWRI WKHVHSURJUDPPHV7RGHOLYHUAccess for Everyone,7HOVWUDZRUNVZLWKRYHU FRPPXQLW\RUJDQLVDWLRQVDFURVV$XVWUDOLD ±IURPODUJHQDWLRQDORUJDQLVDWLRQVVXFK DV7KH6DOYDWLRQ$UP\WRVPDOOHUORFDO FRPPXQLW\DJHQFLHVOLNHWKH7DQJHQW\HUH &RXQFLOLQ$OLFH6SULQJV17 ,QZHDGGHGWKH&DQFHU&RXQFLO WRWKHOLVWRIDJHQFLHVZHVXSSRUW KHOSLQJWKHPWRHDVHWKH¿QDQFLDOEXUGHQ H[SHULHQFHGE\PDQ\SHRSOHDIWHUWKH QHZVRIDFDQFHUGLDJQRVLV7HOVWUD¶VELOO DVVLVWDQFHFHUWL¿FDWHVZLOOLQFUHDVHWKH LPSDFWRIWKH&DQFHU&RXQFLO¶V)LQDQFLDO $VVLVWDQFH3URJUDPPHKHOSLQJSHRSOH DIIHFWHGE\FDQFHUVWD\FRQQHFWHGDQG UHGXFLQJWKHLU¿QDQFLDOEXUGHQVGXULQJ DWLPHRIQHHG

83

16.78

ACCESS FOR EVERYONE CHARITY AND NON-PROFIT DISCOUNT DISABILITY SUPPORT

0.22

EVERYONE CONNECTED – CUSTOMER PROGRAMMES

% OF TOTAL INVESTMENT ‡3HQVLRQHUGLVFRXQWVPKRXVHKROGV ‡)UHHKRPHSKRQHVHUYLFH80,000 customers ‡5HEDWHFHUWL¿FDWHVIRUSD\PHQWRI7HOVWUDELOOVFXVWRPHUVSHUPRQWK ‡6HFXUHSKRQHVHUYLFHVFRPPXQLW\FULVLVDFFRPPRGDWLRQSURYLGHUV ‡'LVDELOLW\(TXLSPHQW+RWOLQHFDOOV ‡'LVDELOLW\(TXLSPHQWSURJUDPPHVXSSOLHGSURGXFWV

SUSTAINABILITY – BEING

A GOOD EMPLOYER

OUR GOAL:

TO ATTRACT AND BUILD

A WORLD-CLASS TALENT BASE

AND CREATE A HIGH-PERFORMING,

CUSTOMER-CENTRIC CULTURE

OUR AIM IS TO CREATE

A WORKPLACE CULTURE

THAT SUPPORTS OUR

TRANSFORMATION TO A MORE

EFFICIENT, INNOVATIVE AND

CUSTOMER-CENTRIC BUSINESS.

CULTURE & EMPLOYEE

ENGAGEMENT

7KLV\HDUZHDFKLHYHGDQ

HQJDJHPHQWVFRUHRISHUFHQW

DWZRSHUFHQWDJHSRLQWLQFUHDVHRQ

WKHSUHYLRXV\HDU7KLVVFRUHSXWV

XVWZRSHUFHQWDJHSRLQWVDERYH

WKH$XVWUDOLDQ1DWLRQDO1RUPDQG

¿YHSHUFHQWDJHSRLQWVEHORZWKH

*OREDO+LJK3HUIRUPLQJ1RUP

5HVXOWVVKRZWKDWHPSOR\HHVQRZ

KDYHPRUHFODULW\DQGFRQ¿GHQFHLQ

7HOVWUD¶VYLVLRQDQGJUHDWEHOLHILQ

WKHTXDOLW\RIRXUFXVWRPHUVHUYLFH

HEALTH, SAFETY & WELLBEING

7KLV\HDUHDUO\LQWHUYHQWLRQ

LQLWLDWLYHVKDYHKHOSHGXVWRPHHW

RXUWDUJHWVIRUORVWWLPHLQMXU\

IUHTXHQF\UDWHV/7,)5DQG

VHULRXVLQMXU\UDWHV:HDOVR

DFKLHYHGVLJQL¿FDQWUHGXFWLRQV

LQWKHQXPEHURIGD\VORVWGXH

WRZRUNSODFHLQMXU\RULOOQHVV

DQGLQDYHUDJHGD\VORVWSHU

µORVWWLPH¶LQMXU\

GENDER DIVERSITY

,QZHLQFUHDVHGIHPDOH

UHSUHVHQWDWLRQDPRQJ1RQ

Executive Directors to 30 per

FHQWDQGDFKLHYHGRXUREMHFWLYH

IRUSHUFHQWUHSUHVHQWDWLRQRI

ZRPHQLQ([HFXWLYHPDQDJHPHQW

:HDOVRVDZSRVLWLYHWUHQGVLQ

SURPRWLRQUDWHVIRUZRPHQLQWKH

PDMRULW\RIEXVLQHVVXQLWVDQGD

ULVHLQWKHHQJDJHPHQWOHYHORI

ZRPHQFRPSDUHGWRODVW\HDU

2YHUDOOIHPDOHUHSUHVHQWDWLRQ

DFURVV7HOVWUDDQG6HQVLVUHPDLQHG

VWHDG\DWSHUFHQW,QWKH

FRPLQJ\HDUZHZLOOFRQWLQXHD

SURDFWLYHFRPSDQ\ZLGHHGXFDWLRQ

SURJUDPPHWRLPSURYHWKHXVHDQG

DSSOLFDWLRQRI7HOVWUD¶VÀH[LEOHZRUN

DQGFDUHHUVSROLFLHVDQGLQFOXVLRQ

ZLOOUHPDLQDNH\SULRULW\IRUDOO

7HOVWUDOHDGHUV

xxiii

TELSTRA VOLUNTEERS LEND

A HAND TO THE RED CROSS

/DVLO\7KRPDVDQGKLVWHDPIURP7HOVWUD 2SHUDWLRQVWRRNDGYDQWDJHRI7HOVWUD¶V QHZSDLGYROXQWHHUOHDYHKHDGLQJWRWKH $XVWUDOLDQ5HG&URVVGLVWULEXWLRQFHQWUH LQ$OWRQD9,&WRVRUWDQGSDFNGRQDWHG FORWKLQJ7KDQNVWRRXUYROXQWHHUVGRQDWHG LWHPVZHUHSUHSDUHGIRUGLVWULEXWLRQWR $XVWUDOLDQ5HG&URVVVWRUHVDFURVVWKH FRXQWU\ 7KHGD\SURYLGHGDQRSSRUWXQLW\IRUWKH WHDPWRERQGRXWVLGHRILWVXVXDOZRUN HQYLURQPHQWZKLOHFRQWULEXWLQJWRD FRPPXQLW\FDXVH$FFRUGLQJWR7HOVWUD YROXQWHHU,UHQH/DZ³LWZDVDKXPEOLQJ H[SHULHQFHYROXQWHHULQJDW5HG&URVV $XVWUDOLD8QGHUVWDQGLQJWKHFRQWULEXWLRQ RIWKH5HG&URVVLQUHDFKLQJRXWWRWKRVH ZKRDUHFRSLQJZLWKUHDOO\VLJQL¿FDQWLVVXHV VLPSO\UHLQIRUFHGKRZIRUWXQDWHPRVWRI XVDUHDQGKRZLPSRUWDQWLWLVWRJLYH EDFNLQVRPHZD\WRWKRVHGRLQJLWWRXJK´ 7KLV\HDUDOPRVW7HOVWUD HPSOR\HHVIURPWHDPVSDUWLFLSDWHG LQYROXQWHHULQJRSSRUWXQLWLHVZLWKWKH $XVWUDOLDQ5HG&URVV

EMPLOYEE ENGAGEMENT

EMPLOYEE ENGAGEMENT SURVEY SCORE - TELSTRA GROUP (%)

LOST TIME INJURY

FREQUENCY RATE

RATE OF OCCURRENCES OF LOST TIME (LTIFR)

REPRESENTATION OF

WOMEN BY EMPLOYMENT

LEVEL

TELSTRA-PAID AND SENSIS – BY % OF WORKFORCE

NOTES:

1 – Non-Executive Directors

NOTES:

An LTIFR is the reported number of occurrences of lost time arising from work-related injury or disease for each million hours worked.

75 75 77 2010 2011 2012 2.32 1.30 1.32 2010 2011 2012 +1.5%

,Q'HFHPEHUZHLQWURGXFHG

SDLGYROXQWHHUOHDYHIRU7HOVWUD

HPSOR\HHVDQGHVWDEOLVKHGD

VPDOOQXPEHURIVWUDWHJLF

FRPPXQLW\SDUWQHUVKLSVWRKHOS

GULYHKLJKYROXPHYROXQWHHULQJ

:HDFKLHYHGDWRWDORI

HPSOR\HHYROXQWHHULQJGD\V

LQFOXGLQJ6HQVLVIRUWKH\HDU

DQGKDYHVHWDWDUJHWRI

GD\VIRUQH[W\HDU

GRQDWLRQWKURXJKSD\UROOJLYLQJ

FRQWULEXWLQJPRUHWKDQ

WRFKDULWLHV$W6HQVLV

SHUFHQWRIHPSOR\HHV

FRQWULEXWHGDURXQGWR

FKDULWLHVYLDSD\UROOJLYLQJ

GRQDWLRQVZKLFKZHUHPDWFKHG

E\6HQVLVGROODUIRUGROODU

ZHZLOOLQWURGXFHGROODUIRU

GROODUPDWFKHGSD\UROOJLYLQJDQG

HQDEOHHPSOR\HHVWRJLYHWRDQ\

UHJLVWHUHGFKDULW\LQ$XVWUDOLD

SURYLGLQJDQDGGLWLRQDOLQFHQWLYH

IRURXUSHRSOHWRSDUWLFLSDWH

30 31 25 27 33 %RDUG1 ([HFXWLYHPDQDJHPHQW 0LGGOHPDQDJHPHQW 2SHUDWLRQDOOHYHO 7RWDO

WE

ARE

TARGETING

PROJECTS

THAT CONNECT PEOPLE TO

THE INTERNET, BUILD THEIR

ONLINE SKILLS, AND

PROMOTE CYBER SAFETY.

,QRXUREMHFWLYHZDVWREULQJ

VWUDWHJLFDOLJQPHQWWRRXUVRFLDO

DQGFRPPXQLW\LQYHVWPHQWZLWKD

VWURQJHUIRFXVRQGLJLWDOLQFOXVLRQ

DQGDµVKDUHGYDOXH¶DSSURDFK

WRFRPPXQLW\LQYHVWPHQW

TELSTRA FOUNDATION

2YHUWKH7HOVWUD)RXQGDWLRQ

LQYHVWHGPRUHWKDQPLOOLRQ

LQWRFRPPXQLW\RUJDQLVDWLRQV

WKDWVKDUHRXUYLVLRQRIPDNLQJ

DSRVLWLYHDQGODVWLQJGLIIHUHQFH

WRWKHOLYHVRI$XVWUDOLD¶VFKLOGUHQ

DQG\RXQJSHRSOH,Q0D\

WKH7HOVWUD)RXQGDWLRQODXQFKHG

WKH

Everyone Connected

grants

SURJUDPPHZKLFKSURYLGHVRQH

PLOOLRQGROODUVLQWKHIRUPRIRQH

KXQGUHGJUDQWVWRVXSSRUW

WKHGLJLWDOLQFOXVLRQLQLWLDWLYHVRI

ORFDOFRPPXQLW\RUJDQLVDWLRQV

:HDUHWDUJHWLQJSURMHFWVWKDW

FRQQHFWGLVDGYDQWDJHGFKLOGUHQ

DQG\RXQJSHRSOHWRWKHLQWHUQHW

EXLOGWKHLURQOLQHVNLOOVRUSURPRWH

F\EHUVDIHW\,QDGGLWLRQWRWKH

JUDQWVWKLV\HDUWKH7HOVWUD

)RXQGDWLRQVXSSRUWHGHLJKW

RQJRLQJFRPPXQLW\GLJLWDO

LQFOXVLRQSURMHFWVZLWKPRUH

WKDQLQIXQGLQJ

7KH7HOVWUD)RXQGDWLRQHVWDEOLVKHG

DVL[\HDUSDUWQHUVKLSZLWK7KH

$ODQQDKDQG0DGHOLQH)RXQGDWLRQ

WRGHOLYHUH6PDUW/LEUDULHVWR

DOOSXEOLFOLEUDULHVLQ$XVWUDOLD

7KHLQLWLDWLYHZLOODVVLVW

SXEOLFOLEUDULHVDFURVVWKHFRXQWU\

WREHVDIHDQGUHVSRQVLEOHLQWKH

RQOLQHZRUOG7KHSURJUDPZLOO

FRPPHQFHQH[W\HDU

TELSTRA CONNECTED SENIORS

Telstra Connected Seniors

®

KHOSV

WRDGGUHVVWKHµGLJLWDOGLYLGH¶

H[SHULHQFHGE\PDQ\ROGHU

$XVWUDOLDQV,WSURYLGHVJUDQWV

WRFRPPXQLW\RUJDQLVDWLRQVWR

GHOLYHUWUDLQLQJFRXUVHVDQGKROG

HYHQWVWRKHOSVHQLRU$XVWUDOLDQV

PDVWHUQHZPRELOHDQGLQWHUQHW

WHFKQRORJ\,QDOPRVW

VHQLRU$XVWUDOLDQVUHFHLYHGWUDLQLQJ

WKURXJKHYHQWVIDFHWRIDFH

VHVVLRQVDQG'9'VORDQHG

WKURXJKOLEUDULHVDFURVV$XVWUDOLD

Around 45,000 seniors accessed

RQOLQHFRQWHQWWKURXJKRXU

GHGLFDWHGZHEVLWH

SUSTAINABILITY – BUILDING

MORE INCLUSIVE COMMUNITIES

OUR GOAL:

TO ENSURE THAT EVERYONE IN

OUR COMMUNITIES ENJOYS THE BENEFITS

OF COMMUNICATION TECHNOLOGIES AND THE

SOCIAL AND ECONOMIC BENEFITS THEY BRING

VXSSRUWHG¿YH,QGLJHQRXV

FRPPXQLW\SURMHFWVZLWK

PLOOLRQLQIXQGLQJ7KLV

LQFOXGHGVXSSRUWIRUWKH&DWK\

)UHHPDQ)RXQGDWLRQ¶V

Palm Island

Early Learning Program

ZKLFK

LVPDNLQJDSRVLWLYHLPSDFWRQ

HDUO\FKLOGKRRGOLWHUDF\:HDOVR

provided $300,000 to continue our

VXSSRUWRI2QH/DSWRS3HU&KLOG

2/3&$XVWUDOLDZKLFKSURYLGHV

UHPRWHSULPDU\VFKRROVWXGHQWV

WKHZRUOG6LQFH0D\2/3&

$XVWUDOLDKDVGHSOR\HGPRUHWKDQ

ODSWRSVLQPRUHWKDQ

FRPPXQLWLHV7KLV\HDUDOVRPDUNV

RXUVW\HDUDVWKHPDMRUVSRQVRU

RIWKH1DWLRQDO$ERULJLQDODQG

7RUUHV6WUDLW,VODQGHU$UW$ZDUG

WKHORQJHVWUXQQLQJPRVW

prestigious Indigenous art

DZDUGLQ$XVWUDOLD

WHOHFRPPXQLFDWLRQVVHUYLFHV

WRHYDFXDWLRQFHQWUHVZKHUH

ZHHVWDEOLVKWHPSRUDU\LQWHUQHW

VHUYLFHVDQGSURYLGHIUHHORDQ

KDQGVHWVZLWK6,0FDUGVDQGIUHH

SKRQHFDUGV:HDOVRSURYLGHUHOLHI

DVVLVWDQFHSDFNDJHVWRDIIHFWHG

UHVLGHQWLDODQGVPDOOEXVLQHVV

FXVWRPHUV,Q7HOVWUD

SURYLGHGDVVLVWDQFHSDFNDJHV

IROORZLQJQLQHQDWXUDOGLVDVWHUV

DFURVVWKHFRXQWU\

xxv

TELSTRA FOUNDATION

CELEBRATES A DECADE OF

SUPPORTING COMMUNITIES

,QZHFHOHEUDWHWKHWHQWKDQQLYHUVDU\ RIWKH7HOVWUD)RXQGDWLRQ:LWKDPLVVLRQ WRPDNHDSRVLWLYHDQGODVWLQJGLIIHUHQFH WRWKHOLYHVRIFKLOGUHQDQG\RXQJSHRSOH WKH7HOVWUD)RXQGDWLRQKDVVXSSRUWHGWKH $XVWUDOLDQFRPPXQLW\ZLWKPRUHWKDQ JUDQWVDQGPLOOLRQRYHUWKH past decade. 7KHL0RGHOOLQJSURMHFWLVRQHH[DPSOHRI WKHGLIIHUHQFHWKH)RXQGDWLRQ¶VIXQGLQJKDV PDGH$XWLVP6$GHYHORSHGDQDSSOLFDWLRQ WRDVVLVWFKLOGUHQZLWK$XWLVP6SHFWUXP 'LVRUGHUWRGHYHORSDQGLPSURYHVRFLDO VNLOOV7KHDSSOLFDWLRQPDNHVSDUWLFXODU XVHRIYLGHRVWRPRGHOFRQVWUXFWLYH VRFLDOLQWHUDFWLRQVVXFKDVLQLWLDWLQJ DFRQYHUVDWLRQRUZDLWLQJLQOLQH 7KH8QLYHUVLW\RI$GHODLGHFRQGXFWHGD ³VRFLDOVNLOOVVFRUH´DVVHVVPHQWZKLFK VKRZHGWKDWFKLOGUHQXVLQJWKHDSSOLFDWLRQ LPSURYHGWKHLUVRFLDOVNLOOVDQGHVWDEOLVKHG IULHQGVKLSJURXSVVRPHWKLQJWKDWLVYHU\ GLI¿FXOWIRUNLGVZLWKDXWLVPWRGR 7KH7HOVWUD)RXQGDWLRQDOVRSURYLGHG IXQGLQJVXSSRUWWRWKH2U\JHQ<RXWK+HDOWK 5HVHDUFK&HQWUHWRGHYHORS+25<=216 DZRUOG¿UVWRQOLQHSODWIRUPWKDWKHOSV \RXQJSV\FKRVLVVXIIHUHUVVWD\FRQQHFWHG DQGSUHYHQWUHODSVH&RPELQLQJH[SHUW VXSSRUWVRFLDOQHWZRUNLQJZLWKSHHUVDQG LQGLYLGXDOO\WDLORUHGPRGXOHV+25<=216 ZLOOPDNHFXUUHQWO\OLPLWHGSV\FKRVLV WUHDWPHQWZLGHO\DYDLODEOH 7KHVHDUHMXVWWZRWHUUL¿FH[DPSOHVRI WKHSRWHQWLDORIPRGHUQFRPPXQLFDWLRQV WHFKQRORJLHVWRWUDQVIRUPOLYHV

SOCIAL AND COMMUNITY INVESTMENT BY FOCUS

DOLLAR INVESTMENT (MILLIONS) AND PERCENTAGE OF TOTAL

DESCRIPTION:

&XVWRPHU Everyone Connected SURJUDPPHV Access for EveryoneSDFNDJHIRUORZLQFRPH FXVWRPHUVFKDULW\GLVFRXQWVRQ¿[HGOLQHV DQGGLVDELOLW\VXSSRUW$216.42m – 90.2%

&RPPXQLW\ Everyone ConnectedSURJUDPPHV VSRQVRUVKLSVHGXFDWLRQDQGWUDLQLQJDQG ORQJWHUP7HOVWUD)RXQGDWLRQSDUWQHUVKLSV

$4.75m – 2.0% Amount % of total

Issue invested investment

Digital inclusion

$221.16

92.2%

Employee community involvement $2.35

1.0%

Sponsorship $13.02

5.4%

Environment $0.61

0.3%

Disaster relief

$0.06

<0.1%

Management costs

$2.59

1.1%

TOTAL $239.8

WE ACTIVELY MINIMISE

THE ENVIRONMENTAL

IMPACTS OF OUR OPERATIONS

AND SUPPORT OUR

CUSTOMERS TO ENHANCE

THEIR ENVIRONMENTAL

PERFORMANCE.

7KLV\HDUZHGHYHORSHGDQ

(QYLURQPHQW:KLWH3DSHUWR

SURYLGHVWUDWHJLFGLUHFWLRQIRU

7HOVWUD¶VHQYLURQPHQWDODFWLYLWLHV

IRUWKHQH[WWKUHHWR¿YH\HDUV7KH

SDSHULGHQWL¿HVVKRUWPHGLXPDQG

ORQJWHUPHQYLURQPHQWDOULVNVDQG

RSSRUWXQLWLHVIRURXUEXVLQHVV,Q

WKHFRPLQJ\HDUZHZLOOXVHWKH

LQVLJKWVSURYLGHGE\WKLVSDSHU

WRGHYHORSDZKROHRIFRPSDQ\

HQYLURQPHQWVWUDWHJ\

ENERGY EFFICIENCY

& CARBON EMISSIONS

,QZHVHWDWDUJHWIRUD

15 per cent reduction in emissions

LQWHQVLW\±WRQQHVRIFDUERQGLR[LGH

HTXLYDOHQWSHUWHUDE\WH

(tCO

2

H7%:HVXUSDVVHGWKLV

UHGXFLQJFDUERQHPLVVLRQV

LQWHQVLW\E\SHUFHQW:HH[SHFW

continued improvements in our

FDUERQHPLVVLRQVHI¿FLHQF\GXH

WREHWWHUXWLOLVDWLRQRIQHWZRUN

HTXLSPHQWDQGDFRQWLQXHG

GHGLFDWHGLQYHVWPHQWLQHQHUJ\

DQGFDUERQHI¿FLHQF\SURMHFWVDQG

KDYHVHWDSHUFHQWUHGXFWLRQ

WDUJHWIRUHPLVVLRQVLQWHQVLW\IRU

QH[W\HDU

7RWDOHQHUJ\FRQVXPSWLRQ

LQFUHDVHGE\SHUFHQWDQG

WRWDOFDUERQHPLVVLRQV6FRSH

DQGLQFUHDVHGE\RQHSHUFHQW

VLQFHODVW\HDUGULYHQSULPDULO\E\

LQFUHDVLQJGDWDORDGVFDUULHGRYHU

RXUQHWZRUNV6LQFHHQHUJ\

FRQVXPSWLRQDQGFDUERQHPLVVLRQV

KDYHUHPDLQHGUHODWLYHO\VWDEOH

GHVSLWHWKLVFRQWLQXHGJURZWKLQ

GDWDORDG7KLVLVWKHUHVXOWRIEHWWHU

XWLOLVDWLRQRILQIUDVWUXFWXUHDQGWKH

HQHUJ\HI¿FLHQF\PHDVXUHVZH

KDYHLPSOHPHQWHG1H[W\HDU

ZHKDYHFRPPLWWHGPLOOLRQ

WRLPSURYHWKHHQHUJ\HI¿FLHQF\

DQGFDUERQLQWHQVLW\RI

QHWZRUNIDFLOLWLHV

HELPING OUR CUSTOMERS TO

REDUCE THEIR CARBON EMISSIONS

7KLV\HDUZHGHYHORSHGRXU¿UVW

customer Green ICT Management

3ODQ,WGHVFULEHVKRZZHZLOO

LGHQWLI\PDQDJHPRQLWRUDQG

PLQLPLVHWKHHQYLURQPHQWDOLPSDFWV

RIRXUVHUYLFHVIRURQHRIRXU

ODUJHVWHQWHUSULVHFXVWRPHUV

7KHSODQIROORZVDOLIHF\FOH

DSSURDFKWRHQYLURQPHQWDO

PDQDJHPHQWDQGRXWOLQHVVSHFL¿F

DFWLRQVIURPVHUYLFHGHVLJQWKURXJK

to procurement, construction,

RSHUDWLRQDQGHQGRIOLIH

management.

SUSTAINABILITY – REDUCING

OUR ENVIRONMENTAL IMPACT

OUR GOAL:

TO DO MORE FOR OUR

CUSTOMERS WHILE ACTIVELY MANAGING

AND MINIMISING OUR ENVIRONMENTAL

IMPACTS AND RESOURCE INTENSITY

xxvii

TELSTRA GETS QANTAS PILOTS

OFF THE GROUND WITH IPADS

^

7HOVWUDLVKHOSLQJRXUFXVWRPHUVUHGXFH WKHLUHQYLURQPHQWDOLPSDFWVDQGLPSURYH WKHLUSURGXFWLYLW\WKURXJKWKHXVHRI QHZFRPPXQLFDWLRQVWHFKQRORJLHV ,QDSDUWQHUVKLSZLWK4DQWDV7HOVWUDZLOO EHSURYLGLQJSLORWVZLWKL3DGV^_IRUXVHRQ WKHÀLJKWGHFN%HJLQQLQJZLWK4DQWDV¶ %RHLQJÀHHWSLORWVZLOOEHDEOHWR DFFHVVDZLGHUDQJHRIRSHUDWLRQDO LQIRUPDWLRQYLDL3DGV^_UDWKHUWKDQ XVLQJEXON\SDSHUGRFXPHQWV4DQWDV FXUUHQWO\SULQWVSDJHVRISDSHU IRUÀLJKWRSHUDWLRQVHYHU\GD\7KHIXOO LQWURGXFWLRQRIL3DGV^_ZLOOVHHWKLV UHGXFHGWRMXVWSDJHV%\WKH HQGRIPRUHWKDQ*% iPads^_{ZLOOEHGLVWULEXWHGWRDOOGRPHVWLF} DQGLQWHUQDWLRQDO4DQWDVSLORWVRQ DOOÀHHWW\SHV

TOTAL CARBON EMISSIONS AND

INTENSITY (SCOPE 1, 2 & 3)

TONNES OF CARBON DIOXIDE EQUIVALENT (tCO2e) 2012 2011 2010

1,687,777

1,659,714

1,676,925

+1% 3KRWRVRXUFH4DQWDV

CARBON EMISSIONS INTENSITY

TONNES OF CARBON DIOXIDE EQUIVALENT PER TERABYTE (tCO2e/TB)

2012 2011 1.93 1.24 -36%

6HQVLVKDVEHHQDPHPEHURI

WKH)RUHVW6WHZDUGVKLS&RXQFLO

)6&VLQFH-XQH6LQFH

WKHQZHKDYHEHHQLQFUHDVLQJWKH

SHUFHQWDJHRIWHOHSKRQHGLUHFWRU\

SDSHUH[FOXGLQJFRYHUERDUGWKDW

LV)6&FHUWL¿HG)6&FHUWL¿FDWLRQ

RIIHUVDJXDUDQWHHWKDWSDSHU

FRPHVIURPUHVSRQVLEOHVRXUFHV

WKDWVXSSRUWWKHFRQVHUYDWLRQRI

IRUHVWVDQGZLOGOLIHDQGKHOSORFDO

FRPPXQLWLHVOHDGEHWWHUOLYHV

)URPZHZLOOKDYH

SHUFHQWRIWHOHSKRQHGLUHFWRU\

SDSHU)6&FHUWL¿HGDQGRXU

FRYHUERDUGZLOOWUDQVLWLRQWR)6&

FHUWL¿HGVWRFN:HDOVRKDYHVWDUWHG

WRXVHELRGHJUDGDEOHEDJVIRUWKH

GLVWULEXWLRQRIGLUHFWRULHVLQSODFH

RISODVWLFEDJV

W\SHLQ$XVWUDOLDDQGRYHUVHDV

:HGH¿QHHZDVWHDVDQ\W\SH

RIHOHFWURQLFFRPSRQHQWVUHQWDO

WHOHSKRQHVSD\SKRQHSDUWV

EDWWHULHVWHOHSKRQHSRZHU

VXSSOLHVDQGRWKHUPLVFHOODQHRXV

HOHFWURQLFLWHPV,Q

ZHUHXVHGRUVHQWWRUHF\FOLQJ

IDFLOLWLHVDSSUR[LPDWHO\

SHUFHQWRIRXURZQHZDVWH

ZKLFKLVSUHGRPLQDQWO\HQGRIOLIH

QHWZRUNHTXLSPHQWDQGEDWWHULHV

:HDUHDOVRZRUNLQJWRKHOS

RXUFXVWRPHUVGLVSRVHRI

HZDVWHPRUHHIIHFWLYHO\

FRPSRQHQWVIURP7HOVWUDUHWDLO

VWRUHVRI¿FHVDQGUHSDLUFHQWUHV

WKURXJKWKH0RELOH0XVWHU

SURJUDPPH7KLVLVDSHUFHQW

GHFUHDVHIURPZKLFKZH

DWWULEXWHWRFRQVXPHUVUHF\FOLQJ

GLUHFWO\ZLWK0RELOH0XVWHUDQGD

GHFUHDVHLQWKHDYHUDJHZHLJKW

RIFRPSRQHQWVWKDWDUHEHLQJ

UHF\FOHG2XUWDUJHWIRUQH[W

\HDULVWRFROOHFWWRQQHV

UNLOCK AMAZING

NATIONAL BROADBAND NETWORK

ON FEBRUARY 28 WE LAUNCHED

TELSTRA’S POPULAR NATIONAL

BUNDLES FOR CONSUMER

CUSTOMERS ON THE NBN IN THE

FIVE FIRST RELEASE SITES IN

ARMIDALE AND KIAMA IN NSW,

WILLUNGA IN SA, TOWNSVILLE

AND MELBOURNE’S INNER CITY

SUBURB OF BRUNSWICK. IN

JUNE, WE WELCOMED OUR FIRST

TASMANIAN CUSTOMERS ON THE

NBN IN TRIABUNNA AND SORELL.

&XVWRPHUVKDYHVKRZQDORWRI

LQWHUHVWLQRXUVHUYLFHVRQWKH1%1

DQGQDWXUDOO\WKH\KDYHPDQ\

TXHVWLRQVDERXWWKHQHZVHUYLFH

DQGWKHFRQQHFWLRQSURFHVV2XU

extensive customer education

SURJUDPSURYLGHVLQIRUPDWLRQDQG

reassurance to our customers, and

ZHKDYHPDGHDVSHFLDOLQYHVWPHQW

LQJLYLQJSHRSOHWKHFKDQFHWRKDYH

WKHLUTXHVWLRQVDQVZHUHGIDFHWR

IDFHDQGVHHKRZWKHQHWZRUN

RSHUDWHV¿UVWKDQG

2XU7HOVWUD)LEUH([SHULHQFH&HQWUH

LVYLVLWLQJHDFKVLWHWRSURYLGHD

KDQGVRQH[SHULHQFHRI7HOVWUD

VHUYLFHVRQWKH1%1DQGDQVZHU

ORFDOV¶TXHVWLRQVDQGZLOOFRQWLQXH

URXQGWKHFRXQWU\DVWKHUROORXW

progresses.

7HOVWUD¶VWHDPRIKLJKO\VNLOOHG

WHFKQLFLDQVDURXQGWKHFRXQWU\

WDNHWKHWLPHWRKHOSFXVWRPHUV

XQGHUVWDQGKRZ7HOVWUDSURGXFWV

ZRUNRQWKH1%1DVSDUWRIRXU

SURIHVVLRQDOLQVWDOODWLRQSURFHVV

:HDOVRKDYHWHFKQLFDO

VXSSRUWRYHUWKHSKRQHRURQOLQH

VXSSRUWRQ7ZLWWHUWKHRSWLRQRI

7HOVWUD3OXVZKLFKSURYLGHVDQH[WUD

OHYHORIKHOSIRUFXVWRPHUVZKR

QHHGDKDQGJHWWLQJWKHPRVWRXWRI

WKHLUQHZ¿EUHVHUYLFHDQGZHKDYH

RSHQHGRXUQHZ³6WRUHRQ:KHHOV´

DQGRWKHUWHPSRUDU\UHWDLORXWOHWV

LQDUHDVZKHUHZHGRQ¶WKDYHD

SHUPDQHQWUHWDLOSUHVHQFH

ZZZWHOVWUDFRPXQORFNDPD]LQJ

1

Contents

1. Full year results and operations review June 2012 . . . . 3

2. Corporate Governance and Board Practices . . . . 23

3. Shareholder Information . . . . 38

4. Directors’ Report . . . . 40

5. Remuneration Report . . . . 51

® _{Registered trade mark of Telstra Corporation Limited}

™ Trade mark of Telstra Corporation Limited

^

Trade mark of Apple Inc

FOXTEL marks are used under licence by FOXTEL Management Pty Ltd. All amounts are expressed in Australian dollars ($A) unless otherwise stated.

Full year results and operations review - June 2012

3 FY 2012 ($m) FY 2011 ($m) YoY change Sales Revenue 25,232 24,983 1.0% Total Revenue 25,368 25,093 1.1% Operating Expenses 15,269 15,154 0.8% EBITDA 10,234 10,151 0.8% Depreciation & Amortisation 4,412 4,459 -1.1% EBIT 5,822 5,692 2.3% 1HW¿QDQFHFRVWV 888 1,135 -21.8% Tax 1,510 1,307 15.5% Attributable NPAT 3,424 3,250 5.4% Accrued capex 3,591 3,410 5.3% )UHHFDVKÀRZ 5,197 5,477 -5.1%

SUMMARY FINANCIAL RESULTS

REPORTED RESULTS

RESULTS ON A GUIDANCE BASIS*

CEO MESSAGE

7HOVWUDKDVDQQRXQFHGUHVXOWVIRU¿VFDO\HDUKLJKOLJKWLQJ JURZWKLQUHYHQXHDQGSUR¿WVLQOLQHZLWKJXLGDQFHDVZHOODV

adding 1.6 million Australian mobile customers.

7HOVWUD¶VVWUDWHJ\FRQWLQXHVWRGHOLYHUEHQH¿WVWRFXVWRPHUV DQGVKDUHKROGHUVZLWKDQLQFUHDVHGIRFXVRQFXVWRPHU

service leading to strong customer retention and acquisition in the 12 months to 30 June 2012.

'XULQJWKH\HDU7HOVWUDLQYHVWHGQHDUO\ELOOLRQRIFDSLWDO LQFOXGLQJVLJQL¿FDQWLQYHVWPHQWVLQ$XVWUDOLD¶VODUJHVWDQG IDVWHVWQDWLRQDOPRELOHQHWZRUNH[WHQGLQJ$XVWUDOLD¶VODUJHVW

4G LTE coverage to more than 1,000 base stations serving more than 375,000 customers.

7HOVWUDDOVRFRQ¿UPHGDIXOO\IUDQNHGFHQW¿QDOGLYLGHQG EULQJLQJWKHWRWDOGLYLGHQGWRFHQWVSHUVKDUHIRU¿VFDO\HDU

2012, returning $3.4 billion to shareholders.

³:HKDYHVHHQWZR\HDUVRIVLJQL¿FDQWFXVWRPHUJURZWK DVRXUVWUDWHJ\FRQWLQXHVWREHDUIUXLW7KLVKDVWUDQVODWHG LQWRVWURQJ¿QDQFLDOUHVXOWVGHVSLWHWRXJKGRPHVWLFDQG LQWHUQDWLRQDOHFRQRPLFFRQGLWLRQV´&KLHI([HFXWLYH2I¿FHU 'DYLG7KRGH\VDLGWRGD\ ³7KHUHVXOWVRIRXUIRFXVRQRXUFXVWRPHUVDQGVLPSOLI\LQJ RXUEXVLQHVVFDQEHVHHQLQLPSURYHGFXVWRPHUIHHGEDFN

We delivered on our commitments, met guidance and demonstrated greater resilience than other sectors in a

FKDOOHQJLQJPDUNHWHQYLURQPHQW ³:HKDYHDFKLHYHGWRSDQGERWWRPOLQHJURZWKDQGH[SHFWWR GRVRDJDLQLQWKH¿QDQFLDO\HDU´

‡ 7RWDOUHYHQXHLQFUHDVHGE\WRELOOLRQ

‡ (%,7'$LQFUHDVHGE\WRELOOLRQ

‡ 1HW3UR¿W$IWHU7D[LQFUHDVHGE\WRELOOLRQ

‡

Capex to sales ratio of 14.2%

‡ )UHHFDVKÀRZRIELOOLRQ

%HIRUHLPSDLUPHQWV*RYHUQPHQW1%1'H¿QLWLYH$JUHHPHQWUHFHLSWV DQGUHJXODWHGZKROHVDOHSULFHFKDQJHV7KHJXLGDQFHEDVLVKDVEHHQ UHYLHZHGE\RXUDXGLWRUV

FY 2012 FY 2012 Guidance

Total revenue 1.3% /RZVLQJOHGLJLWJURZWK

EBITDA 2.1% /RZVLQJOHGLJLWJURZWK

Capex/sales 14.2% ~14%

)UHHFDVKÀRZ $5.3bn $4.5 - 5.0bn

Dividend 28cps FSVIXOO\IUDQNHG

TOTAL REVENUE GROWTH

FY09 2.7% FY10 -2.3% FY11 0.7% FY12 1.1%

Full year results and operations review - June 2012

KEY OUTCOMES AGAINST STRATEGIC

PRIORITIES

Customer satisfaction 7,2OHYHOFRPSODLQWVUHODWLQJWR7HOVWUDUHGXFHGE\ DQGFRQVXPHUFDOOYROXPHVE\&XVWRPHUVHUYLFH LPSURYHPHQWVLQWURGXFHGRYHUWKHODVW\HDULQFOXGHDQHZ FRQVXPHUELOOIRUPDWPDNLQJLWVLPSOHUDQGFOHDUHUIRU

customers to understand charges, the introduction of an

DSSOLFDWLRQZKLFKHQDEOHVFXVWRPHUVWRDFFHVVWKHLUDFFRXQW

via an Apple iPad^_{DQG)DFHERRNDQGPDQ\RWKHURSHUDWLRQDO}

improvements.

Growth in number of customers

7HOVWUD¶VSURGXFWRIIHUVDQGQHWZRUNLQYHVWPHQWVFRQWLQXHGWR DWWUDFWQHZFXVWRPHUVGXULQJWKH\HDUDGGLQJ

‡1.6 million domestic mobile customers, to a total of 13.8

million;

‡ UHWDLO¿[HGEURDGEDQGFXVWRPHUVWRDWRWDORI

million;

‡336,000 customers on bundled plans, to a total of 1.4

million;

‡475,000 Hong Kong mobile customers, to a total of 3.5

million.

7HOVWUD¶V*QHWZRUNEXLOGDFFHOHUDWHGGXULQJWKH\HDUDQG QRZFRYHUVDSSUR[LPDWHO\RI$XVWUDOLD¶VSRSXODWLRQ

Customers have activated more than 375,000 4G devices since launch.

Telstra’s domestic mobile business generated more than one third of revenue. Telstra has added more than three

PLOOLRQQHZPRELOHFXVWRPHUVRYHUWKHSDVWWZR\HDUV 0RELOHUHYHQXHJURZWKRIZDVDFKLHYHGZKLOHPDUJLQV LQFUHDVHGE\WKUHHSHUFHQWDJHSRLQWVWR *URZWKLQUHWDLOEURDGEDQGSDUWO\RIIVHWGHFOLQHVLQZKROHVDOH UHYHQXHVZKLFKLQFOXGHGWKHLPSDFWRIUHJXODWRU\DFFHVV GHWHUPLQDWLRQV)L[HGOLQHUHYHQXHGHFOLQHZDVVWHDG\DW 6.1%. 6LPSOL¿FDWLRQ

Telstra’s business improvement programme remained on

WUDFNDQGGHOLYHUHGEHQH¿WVLQ¿VFDORIELOOLRQ

enabling reinvestment in customer service initiatives. These

EHQH¿WVLQFOXGHGLPSURYHPHQWVLQODERXUSURGXFWLYLW\ UHGXFHGFXVWRPHUFDOOYROXPHVDQGJURZWKLQRQOLQHFXVWRPHU interactions. Growth opportunities 1HWZRUN$SSOLFDWLRQDQG6HUYLFHV1$6UHYHQXHJUHZE\ WRPLOOLRQZLWKVHYHUDOVLJQL¿FDQWFRQWUDFWV

signed providing a strong foundation for 2013. Major

FXVWRPHUVVLJQHGZLWKLQWKH1$6SRUWIROLRLQFOXGHGWKH

Department of Human Services, Australia Post and NAB.

$FURVVWKH0HGLDSRUWIROLR)R[WHO¶VDFTXLVLWLRQRI$XVWDUZDV DQLPSRUWDQWPLOHVWRQH6HQVLVUHYHQXHGHFOLQHGE\DV

the move to online accelerated. Customer response to Sensis’ digital offers improved in recent months across metro and non-metro regions. Excluding Sensis and advertising, digital media

SURGXFWUHYHQXHLQFUHDVHGRYHUWKH\HDU

,QWKH7HOVWUD,QWHUQDWLRQDO*URXSZKLFKLQFRUSRUDWHV7HOVWUD¶V LQYHVWPHQWVLQ$VLDUHYHQXHJUHZE\GULYHQE\JURZWKLQ

the Hong Kong mobile services (CSL) business and global

FRQQHFWLYLW\DQGLQWHUQDWLRQDO1$6SURGXFWV7HOVWUD*OREDO DVWKHFRPSDQ\EHQH¿WHGIURPLQWHJUDWLQJDVVHWVDFTXLUHG

from Reach.

NATIONAL BROADBAND NETWORK (NBN)

,Q0DUFK7HOVWUD¿QDOLVHGWKH1%1DJUHHPHQWV ZLWKWKH&RPPRQZHDOWKDQG1%1&RLQFOXGLQJ$&&& DFFHSWDQFHRI7HOVWUD¶V6WUXFWXUDO6HSDUDWLRQ8QGHUWDNLQJDQG

commenced providing long term infrastructure access under

WKH,QIUDVWUXFWXUH6HUYLFHV$JUHHPHQW,6$7HOVWUDUHFHQWO\ KDQGHGRYHUVWDJHRQHRIWKHWUDQVLWQHWZRUNGDUN¿EUHDQG H[FKDQJHUDFNVSDFHVWR1%1&R7KHFRPSDQ\FRQWLQXHVWR ZRUNFROODERUDWLYHO\ZLWK1%1&RRQWKHEXLOGLQJRILWVDFFHVV QHWZRUN7HOVWUDKDVDOVRODXQFKHGUHWDLODQGZKROHVDOH VHUYLFHVRYHUWKH1%1IROORZLQJVXFFHVVIXOWULDOVLQWKHHDUO\ release sites.

HALF YEARLY REPORTED RESULTS

H2 2012 YoY change H1 2012 YoY change H2 2011 YoY change H1 2011 YoY change H2 2010 YoY change Sales revenue 0.8% 1.2% 1.8% -0.5% -1.9% Total revenue 1.1% 1.1% 1.9% -0.5% -1.7% Operating expenses 2.6% -1.0% 3.0% 10.7% -1.8% EBITDA -1.6% 3.7% 0.7% -13.9% -1.5% 3UR¿WIRUWKHSHULRG -4.8% 22.5% -0.5% -36.0% -4.7%

Full year results and operations review - June 2012

5

CAPITAL MANAGEMENT

7HOVWUDHQGHGWKH\HDUZLWKVWURQJOLTXLGLW\DQGH[FHVVFDVK RIELOOLRQDWWKHWRSHQGRIFRPSDQ\SURMHFWLRQV7KLV SRVLWLRQVWKHFRPSDQ\ZHOODKHDGRIH[SHFWHGVSHFWUXP DFTXLVLWLRQFRPPLWPHQWVDQGELOOLRQRIGHEWUH¿QDQFLQJ GXHLQ,QDGGLWLRQRYHUWKHQH[WWZR\HDUV7HOVWUDSODQV

to invest around $500 million of excess cash into its mobile

QHWZRUNLQFOXGLQJ/7(WRPDLQWDLQDQGH[WHQGRXUQHWZRUN DGYDQWDJHDQGLQWRWKH1%1WUDQVLWQHWZRUNWREULQJIRUZDUG EHQH¿WVIURPWKH1%1DJUHHPHQWV

Telstra is not contemplating capital management initiatives at this time.

FINANCIAL OUTLOOK

7HOVWUDH[SHFWVJURZWKWRFRQWLQXHLQ¿VFDO\HDUDQG IRUHFDVWVORZVLQJOHGLJLWWRWDOLQFRPHDQG(%,7'$JURZWK ZLWKIUHHFDVKÀRZEHWZHHQDQGELOOLRQ7HOVWUD

expects capital expenditure to be around 15% of sales over

WKHQH[WWZR\HDUV

*XLGDQFHDVVXPHVZKROHVDOHSURGXFWSULFHVWDELOLW\QR LPSDLUPHQWVWRLQYHVWPHQWVDQGH[FOXGHVDQ\SURFHHGVRQ

the sale of businesses and the cost of spectrum purchases. The foreign exchange impairment on TelstraClear expected on completion is also excluded.

³2XUVWUDWHJ\LVZRUNLQJDQGZHFRQWLQXHWRIRFXVRQRXU SULRULWLHVRILPSURYLQJFXVWRPHUVDWLVIDFWLRQSUR¿WDEO\ LQFUHDVLQJWKHQXPEHURIFXVWRPHUVVLPSOLI\LQJWKHEXVLQHVV DQG¿QGLQJQHZJURZWKRSSRUWXQLWLHV´0U7KRGH\VDLG $VDQQRXQFHGLQ2FWREHULWLVWKHFRPSDQ\¶VLQWHQWLRQWR PDLQWDLQDFHQWIXOO\IUDQNHGGLYLGHQGIRU¿VFDO7KLV

is subject to the Board’s normal approval process for dividend declaration and there being no unexpected material events.

REPORTED RESULTS

,Q¿VFDO\HDUVDOHVUHYHQXHLQFUHDVHGE\RU PLOOLRQWRPLOOLRQDQGWRWDOUHYHQXHLQFUHDVHGE\

or $275 million to $25,368 million.

Operating Expenses (before depreciation and amortisation)

LQFUHDVHGE\RUPLOOLRQWRPLOOLRQDVWKH FRPSDQ\FRQWLQXHVWRGHOLYHULPSURYHGSURGXFWLYLW\

/DERXUH[SHQVHLQFUHDVHGE\WRPLOOLRQ/DERXU DQGODERXUVXEVWLWXWLRQH[SHQVHLQFUHDVHGE\WR PLOOLRQ$QLQFUHDVHLQVDODU\DQGDVVRFLDWHGFRVWVODUJHO\

a result of the impact of a movement in the government

ERQGUDWHRQHPSOR\HHSURYLVLRQVDQGLQFUHDVHGVKRUWWHUP LQFHQWLYHFRVWVZDVRIIVHWE\ORZHUUHGXQGDQFLHVDQGODERXU

substitution expense. Excluding the impact of the bond rate movement, labour and labour substitution expense decreased

E\ 'LUHFWO\YDULDEOHFRVWV'9&VRUJRRGVDQGVHUYLFHV SXUFKDVHGGHFUHDVHGE\WRPLOOLRQWKH¿UVW\HDU RQ\HDUGHFOLQHLQ¿YH\HDUV 2WKHUH[SHQVHVGHFUHDVHGE\RUPLOOLRQWR PLOOLRQZLWKDUHGXFWLRQLQVHUYLFHFRQWUDFWVDVZHFRQWLQXHWR VLPSOLI\WKHEXVLQHVV

Earnings before interest, tax, depreciation and amortisation

(%,7'$LQFUHDVHGE\WRPLOOLRQZLWK(%,7'$ PDUJLQVÀDWDW(DUQLQJVEHIRUHLQWHUHVWDQGWD[(%,7 LQFUHDVHGE\WRPLOOLRQ 1HW¿QDQFHFRVWVGHFUHDVHGE\WRPLOOLRQGULYHQ E\DUHGXFWLRQLQWKHOHYHORIDYHUDJHQHWGHEWIURPDFWLYH PDQDJHPHQWRIWKHFRPSDQ\¶VGHEWSRUWIROLRDQGIDLUYDOXH adjustments. 5HSRUWHGSUR¿WDIWHUWD[DQGQRQFRQWUROOLQJLQWHUHVWV LQFUHDVHGE\WRPLOOLRQ%DVLFHDUQLQJVSHUVKDUH (36LQFUHDVHGE\IURPFHQWVWRFHQWV )UHHFDVKÀRZRIPLOOLRQZDVJHQHUDWHGLQWKH\HDU $FFUXHGFDSLWDOH[SHQGLWXUHZDVPLOOLRQRURI sales. 2Q$XJXVWWKH'LUHFWRUVRI7HOVWUDUHVROYHGWRSD\D IXOO\IUDQNHG¿QDOGLYLGHQGRIFHQWVSHUVKDUH6KDUHVZLOO

trade excluding entitlement to the dividend on 20 August 2012

ZLWKSD\PHQWRQ6HSWHPEHU

PRODUCT PERFORMANCE

Measure Fiscal 2013 Guidance

Total income ORZVLQJOHGLJLWJURZWK

EBITDA ORZVLQJOHGLJLWJURZWK Capex/sales Around 15% )UHHFDVKÀRZ $4.75-$5.25 billion Dividend FIXOO\IUDQNHG

FY 2013 GUIDANCE SUMMARY*

**XLGDQFHDVVXPHVZKROHVDOHSURGXFWSULFHVWDELOLW\QRLPSDLUPHQWVWR LQYHVWPHQWVDQGH[FOXGHVDQ\SURFHHGVRQWKHVDOHRIEXVLQHVVHVDQGWKH

cost of spectrum purchases. The foreign exchange impairment on TelstraClear expected on completion is also excluded.

KEY PRODUCT REVENUE

FY 2012 ($m) FY 2011 ($m) YoY change Fixed 7,488 7,972 -6.1% Mobile 8,668 7,989 8.5% Data and IP 3,122 3,147 -0.8% NAS 1,263 1,143 10.5% International 1,496 1,398 7.0% Digital Media 2,377 2,629 -9.6%

Full year results and operations review - June 2012

FIXED

5HYHQXHIURPRXU¿[HGSRUWIROLRGHFUHDVHGE\WR PLOOLRQZLWKJURZWKLQ¿[HGEURDGEDQGSDUWO\RIIVHWWLQJWKH

continued PSTN revenue decline.

)L[HGUHWDLOEURDGEDQGUHYHQXHLQFOXGLQJKDUGZDUHJUHZE\ WRPLOOLRQLQWKH\HDUDVLJQL¿FDQWLPSURYHPHQW IURPWKHJURZWKLQ¿VFDO7RWDO¿[HGEURDGEDQG UHYHQXHLQFOXGLQJZKROHVDOHLQFUHDVHGE\WR million. 2XU¿[HGEURDGEDQGSRUWIROLRFRQWLQXHVWRJURZDVDUHVXOWRI WKHSRSXODULW\RIRXUFRPSHWLWLYHDQGEURDGUDQJHRIEXQGOHG RIIHUVZKLFKLQFOXGHD¿[HGEURDGEDQGDQG3671VHUYLFH )L[HGUHWDLOEURDGEDQGFXVWRPHUVJUHZE\GXULQJWKH \HDUDQGWKHUHDUHQRZPLOOLRQFXVWRPHUVRQDEXQGOHG SODQDQLQFUHDVHRIRQWKHSULRU\HDU )L[HGUHWDLOEURDGEDQG$538LQFUHDVHGE\WR

a strong result given the intense competitive landscape, and

DWXUQDURXQGIURPODVW¿VFDO\HDUZKHUH$538GHFOLQHGE\ $538LQWKHVHFRQGKDOIDOVRJUHZE\RQWKHSULRU \HDU :KROHVDOHEURDGEDQGUHYHQXHIHOOE\RUPLOOLRQ WRPLOOLRQPDLQO\DVDUHVXOWRIZKROHVDOH EURDGEDQGOLQHVZKLFKZHUHORVWGXULQJWKH\HDUDVZKROHVDOH FXVWRPHUVFRQWLQXHWREXLOGWKHLURZQLQIUDVWUXFWXUHDQG

migrate their services to Telstra’s Unconditioned Local Loop (ULL) product. 3671UHYHQXHGHFOLQHGE\WRPLOOLRQDVD UHVXOWRIORZHUFDOOUHYHQXHDQGDFRQWLQXHGGHFUHDVHLQ EDVLFDFFHVVOLQHV3671LVQRZOHVVWKDQRIRXUVDOHV revenue. 3671EDVLFDFFHVVOLQHVGHFOLQHGGXULQJWKH\HDU VOLJKWO\KLJKHUWKDQWKHOLQHGHFOLQHLQ¿VFDO\HDU 7KHGHFOLQHLQEDVLFDFFHVVUHYHQXHZDVFRQVLVWHQWZLWKSULRU

periods. Calling revenue deteriorated further as customer

XVDJHSDWWHUQVFRQWLQXHWRFKDQJHGULYHQE\VXEVWLWXWLRQWR PRELOHYRLFHPRELOHGDWDDQG¿[HGGDWDDOWHUQDWLYHV&DOO UHYHQXHKDVDOVREHHQLPSDFWHGE\WKHLQFUHDVHGWDNHXSRI EXQGOHGSODQVZKHUHFXVWRPHUVKDYHFDOOVLQFOXGHGDVSDUWRI

their plan.

PSTN EBITDA margins increased one percentage point to

DQG¿[HGEURDGEDQGPDUJLQVLQFUHDVHGVL[SHUFHQWDJH points to 37%. 7KHLPSDFWRIWKH1%1RQRXU¿[HGEXVLQHVVLQWKLV¿VFDO\HDU ZDVQRWVLJQL¿FDQW

MOBILE

:HUHFRUGHGRQHRIRXUEHVWHYHU\HDUVLQPRELOHZLWK

million domestic mobile customers added. The breadth and

TXDOLW\RIVHUYLFHFXVWRPHUVHQMR\ZKHQXVLQJRXU1H[W*®

QHWZRUNUHPDLQVDQLPSRUWDQWFRPSHWLWLYHDGYDQWDJHIRUXV 7RWDOPRELOHUHYHQXHJUHZE\WRPLOOLRQ 2YHUWKHSDVWWZR\HDUVZHKDYHDFTXLUHGRYHUWKUHHPLOOLRQ PRELOHFXVWRPHUVE\SURYLGLQJEHWWHUYDOXHSODQVLPSURYLQJ

our customer service, focusing our brand and product

PDUNHWLQJDQGFRQWLQXLQJWRLQYHVWLQQHWZRUNVXSHULRULW\ /DVW\HDUZHEHFDPHWKH¿UVWRSHUDWRULQ$XVWUDOLDWRRIIHU

ultra-fast 4G LTE devices (smartphones, tablets and mobile broadband). Since launching 4G services in September,

ZHKDYHVROGRYHU*GHYLFHVLQFOXGLQJ KDQGVHWVZLWKFRYHUDJHQRZLQUHJLRQDODUHDVPDMRU

cities and airports.

:HQRZKDYHPLOOLRQPRELOHFXVWRPHUVLQFOXGLQJ

million postpaid handheld and 3.1 million mobile broadband

FXVWRPHUV,Q¿VFDO\HDURIRXUSRVWSDLGKDQGVHW VDOHVZHUHVPDUWSKRQHV 3RVWSDLGKDQGKHOGUHYHQXHRIPLOOLRQJUHZE\ &XVWRPHUQXPEHUJURZWKLQWKLVFDWHJRU\ZDVDVWURQJ ZKLOH$538VGHFOLQHGLQWKH\HDUODUJHO\GXHWKHLPSDFW RI0RELOH5HSD\PHQW2SWLRQ052DFFRXQWLQJ([FOXGLQJ

the impact of MRO, postpaid handheld ARPUs increased

PDUJLQDOO\RYHUWKH\HDU

FIXED BROADBAND REVENUE GROWTH

FY09 10.5% FY10 1.8% FY11 -2.9% FY12 2.9%

MO

BIL

E

G

R

O

W

T

H

F

IX

ED

FY12 PRODUCT SALES REVENUE BREAKDOWN

12% Other 4% PSTN Fixed Broadband Mobile IP & Data NAS Media Other Fixed International 19% 6% 8% 3% 34% 5% 9%

Full year results and operations review - June 2012

7 0RVWSRVWSDLGFXVWRPHUVDUHQRZWDNLQJXS052SODQV $VDUHVXOWKDUGZDUHUHYHQXHJURZWKUHPDLQVVWURQJDW 7KHJURZWKLQ052SODQVGULYHVVLJQL¿FDQWQRQFDVK DPRUWLVDWLRQRIFXVWRPHUGHEWZKLFKLVUHSRUWHGDVQHJDWLYH VHUYLFHUHYHQXH7KLVUHYHQXHZDVPLOOLRQLQ¿VFDO\HDU )<PLOOLRQDQGKDVUHVXOWHGLQFORVHWRD

reduction in reported postpaid handheld ARPU in the current

¿VFDO\HDUDQGDSSUR[LPDWHO\LQWKHSULRU\HDU 0RELOHEURDGEDQGUHYHQXHJUHZE\WRPLOOLRQ GULYHQE\VWURQJFXVWRPHUQXPEHUJURZWKRI0RELOH EURDGEDQG$538GHFOLQHRIZDVGULYHQE\ERWKWKH LQFUHDVHGSHQHWUDWLRQRIORZHUYDOXHSUHSDLGSODQVLQFOXGLQJ WDEOHWVDQGORZHUSULFHGSRVWSDLGRIIHUV,PSRUWDQWO\LQWKH VHFRQGKDOIRIWKH\HDUWKHUDWHRI$538GHFOLQHKDVUHGXFHG VLJQL¿FDQWO\0DFKLQHWRPDFKLQH00UHYHQXHJUHZE\ DQGLVDQHPHUJLQJRSSRUWXQLW\IRU7HOVWUDLQWKHPRELOH FDWHJRU\0RELOHLQWHUFRQQHFWLRQUHYHQXHLQFUHDVHGE\ WRPLOOLRQ7KHJURZWKLQLQWHUFRQQHFWLRQUHYHQXHKDV EHHQGULYHQE\606YROXPHVDQGLVDWWULEXWDEOHLQSDUWWR DQLQFUHDVHLQWKHQXPEHURISRVWSDLGKDQGKHOGSODQVZKLFK

include an unlimited SMS bundle. A reduction in mobile

WHUPLQDWLRQUDWHVIURPFHQWVWRFHQWVZKLFKEHFDPH HIIHFWLYH-DQXDU\KDGDPLOOLRQQHJDWLYHLPSDFW

on interconnection revenue. A larger positive impact from the

UHGXFWLRQLQPRELOHWHUPLQDWLRQUDWHVLVFDSWXUHGLQQHWZRUN SD\PHQWV

&KXUQFRQWLQXHVWREHZHOOPDQDJHGZLWKWKHSRVWSDLG

handheld deactivation rate improving to 12.2%.

Strong cost control has had a positive impact on mobile

(%,7'$PDUJLQVZKLFKLQFUHDVHGE\WKUHHSHUFHQWDJHSRLQWV IURPODVW¿VFDO\HDUWRZLWK(%,7'$JURZWKRILQWKH ¿VFDO\HDU

DATA & IP

,6'1LVQRZLQFOXGHGLQRXU'DWDDQG,3SRUWIROLR'DWDDQG ,3UHYHQXHGHFOLQHGE\WRPLOOLRQ,3$FFHVV UHYHQXHFRQWLQXHVWRJURZDVWKHSHQHWUDWLRQRI,3EDVHG

solutions increases in both the Enterprise and Small Business

PDUNHWVDQGWKLVLVQRZDELOOLRQEXVLQHVV

+RZHYHUWKHLQFUHDVHLQUHYHQXHRIRUPLOOLRQZDV

not enough to offset the decline in ISDN and traditional data product revenues.

'DWDDQG,3(%,7'$PDUJLQVZHUHVWHDG\FRPSDUHGWR WKHSULRU\HDU

NETWORK APPLICATIONS & SERVICES

1HWZRUNDSSOLFDWLRQVDQGVHUYLFHV1$6UHYHQXHLQFUHDVHG E\WRPLOOLRQZLWKVHYHUDOLPSRUWDQWORQJWHUP FRQWUDFWVZRQGXULQJWKH\HDU0DMRUFRQWUDFWVLQFOXGHWKH

Department of Human Services, NAB and Australia Post.

7HOVWUDLVIRFXVHGRQGHOLYHULQJWKHEHVWQHWZRUNVHUYLFHV

for large organisations. These contracts are a testament to the trust corporations are placing in us to design, build and

PDQDJHWKHLUWHOHFRPPXQLFDWLRQDQGQHWZRUNVHUYLFHV

The NAS sales pipeline remains strong. We are encouraged

E\WKHJURZWKLQRXU1$6EXVLQHVVHVSHFLDOO\ZLWKSURGXFWV JHQHUDWLQJUHFXUULQJUHYHQXH7KLVLQFOXGHVXQL¿HG

FRPPXQLFDWLRQVDQGFORXGVHUYLFHVZKLFKJUHZDQG UHVSHFWLYHO\&RPPHUFLDODQGLQGXVWULDOZRUNVGHFOLQHG GXHWRWKHLQFOXVLRQRIRQHRIISURMHFWVLQWKHSULRU\HDUVXFK

as our participation in the rollout of NBN trial sites.

INTERNATIONAL

7HOVWUD,QWHUQDWLRQDO*URXSSURGXFWUHYHQXHJUHZE\

or $98 million to $1,496 mil