b

Corporate Responsibility

Report 2008

2

Message from our CEO 1

Approach 2

Executivesummary 2

Telstraprofile 6

CorporategovernanceatTelstra 7

Corporateresponsibilitygovernance 8

Stakeholderengagement 9

Ourmaterialissues 12

1 Society matters 14

Influencingpublicpolicy 15

- NationalBroadbandNetwork - Climatechange - Internetsafetyandsecurity - Electromagneticenergy

Socio-economiccontribution 22

- Economicimpact - Productivityandinnovation

Influencingcorporateresponsibilityoutcomes 26

- Suppliers - Awards

2 Communities matter 28

Disasterrelief 29

Communitybusinesspartnerships 30

TelstraFoundation 30

Sponsorship 32

Volunteering 33

3 Employees matter 36

Buildingaworldclasstalentbase 37

Enhancingdiversityandopportunity 38

Providingahealthyandsafeenvironment 42

4 Customers matter 48

Enhancingourcustomers’experience 49

- Customerservicecommitments - Informingourcustomers - Customersafetyandsecurity - Customerprivacy

Ensuringaccessforeveryone 53

- Peopleonlowincomes - Peoplewithdisability - Ruralandregionalcustomers - Indigenouscommunities - TelstraConnectedSeniors®

5 Environment matters 58

Engagingemployees 59

Improvingourenergyefficiency 60

Managingresourceefficiencyandwaste 62

Greenhousegasemissions 64

Managingourlanduseappropriately 65

Compliance 67

Environmentdata 69

Global Reporting Initiative Index 74

Contents

1

About this reportThisisTelstra’ssixthannualcorporateresponsibilityreport.Itcoversthe2007/08financialyearfortheAustralianoperationsofTelstraCorporationLimited(excludingSensis,Telstra’sinformationandadvertisingbusiness,unlessotherwisespecified).

AfullaccountofthecorporateresponsibilityperformanceofSensiscanbefoundatwww.about.sensis.com.au

ThisreportcoversTelstra’seconomic,socialandenvironmentalcontributionsandperformanceduring2007/08andisintendedtoprovidecomprehensiveinformationtothefullrangeofTelstra’sstakeholders.

WehavepreparedthisreportwithreferencetotheGlobalReportingInitiative(GRI)SustainabilityReportingGuidelines(version3.0)andtheGRITelecommunicationsSectorSupplement.

Feedbackonthereportiswelcome.PleaseemailNancie-LeeRobinson,SeniorAdvisor,CorporateResponsibility,atcsr@team.telstra.comorparticipateinouronlineforumatwww.nowwearetalking.com.au

Message from our CEOInsomeway,TelstratouchesnearlyeveryAustralian,everyday.Ourday-to-daybusinessandongoingtransformationareavitalthreadinAustralia’seconomicandsocialfabricandthisisaresponsibilitywetakeveryseriously.It’sattheheartofeverythingwedo.

CorporateresponsibilityatTelstrastartswithmeandflowsthroughoutthecompany.Ourapproachtocorporateresponsibilitybeginswithasimpleandstraight-forwardcommitmenttoprincipleddecision-making.Whetheritisprovidinggoodjobsatgoodwages,servingtheneedsofourcustomerswithnewandinnovativeproductsandsolutions,pursuingresourceefficiencyacrossthebusinessorplayingaroleindevelopingsolutionstothebigsocialandenvironmentalissuesoftheday–fundamentalprinciplesguidetheway.

AtTelstra,weknowthatitmakesbusinesssensetoappreciatetheimpactofourbusinessdecisionsonthelargercommunity.Thereisanalignment,forexample,betweenreducingcostsandreducingtheenvironmentalimpactofouroperations.ThereportcommissionedbyTelstra,Towards a High-Bandwidth, Low-Carbon Future: Telecommunications-based Opportunities to Reduce Greenhouse Gas Emissions,putssolidideasintothemarketplaceabouthowwecanusetelecommunicationsnetworkstoreducebusinesscostswhilealsoreducingAustralia’scarbonfootprint,mostofwhichareachievabletoday.

Alreadythreeyearsthroughourfive-yeartransformation,wearechangingnotjustourcompany,butthewayAustralianswork,playandmovearound.Ournextgenerationnetworksandservices,whichprovideunparalleledcoverageandspeeds,areprovidingacustomerexperiencethatissimple,integratedandintuitive.We’rebringingAustraliansclosertogether.We’reimprovingbusinessproductivity.Andwe’reincreasingAustralia’sabilitytocompeteglobally.

Corporateresponsibilityisintegraltoeverythingwedo.It’saboutmakingprincipleddecisionswithfullconsiderationofalltheirimplications–social,environmentalandeconomic.Thishelpsussucceedanddeliverforourcustomersandshareholdersbecauseactingresponsiblymakesgoodbusinesssense.Ithelpsustobemoreefficient,increasesproductivityandmakespeopleproudtoworkforTelstra.

Oursixthcorporateresponsibilityreporthighlightsourcontributionsduring2007/08andclearlysetsouttheactionswehaveplannedtobuildonoursolidperformanceinthefuture.

SolTrujillo,ChiefExecutiveOfficerNovember2008

Executive summarySocietyKeyachievementsin2007/08• LaunchedourlandmarkpublicationTowards a High-

Bandwidth, Low-Carbon Future: Telecommunications- based Opportunities to Reduce Greenhouse Gas Emissions. Thereportquantifiesthepossiblecarbonanddollarsavingsthatcouldbeachievedbybusinesses,householdsandgovernmentsbyusingtelecommunicationsnetworkstoavoidorreducetheircarbonemissions.

• Achievedaratingof87percentinthe2007CorporateResponsibilityIndex.Thisincludedoutstandingresultsincommunitymanagement(100percent).

• IncreasedTelstra’sscorefrom36percentin2007to70percentinthe2008DowJonesSustainabilityIndex,aglobalanalysisofcorporateresponsibilityleadership.Thisscoreiswellabovetheindustryaverageof53percent.

• LaunchedtheTelstraFoundation’sSpotlightonCyberSafetyprogramwithacommitmentof$3millionoverthreeyearstohelpchildrendeveloptheskillstobesafewhenonlineandusingmobilephones.

• HelpeddelivertheSCAMWatchFraudFortnightawarenesscampaigntoover2.7millionBigPond®customers,550,000TradingPostusersand40,000employees.ThecampaignisanactivityoftheAustralasianConsumerFraudTaskforce,ofwhichTelstraisanindustrypartner.

• Invested$4.9billiontocontinuethebuildoutoftheNextG™wirelessbroadbandnetwork;continueddeploymentoftheTelstraNextIP™network;creationofnewandadvancedbusinesssupportandoperatingsupportsystems;andotherinvestmentstotransformthedeliveryoftelecommunicationsservicesinAustralia.

• Contributed$300,000toanewresearchfacilityforspecialisedradiofrequencyresearchintothepossiblehealthimpactsfromexposuretoelectromagneticenergy.TelstraiscollaboratingwithSwinburneUniversityofTechnologyonthisinitiative.

Plannedactionsfor2008/09• Improvetherelevance,transparencyandaccessibility

ofTelstra’scorporateresponsibilityinformationonTelstra’swebsite.

• ConductareviewofTelstra’shumanrightspositionandpracticestoassessperformanceagainstinternationalstandards.

• IntroducefeaturesectionsonthenowwearetalkingwebsitetoprovideaplatformforpublicdiscussionanddebateabouttheenvironmentandtheNationalBroadbandNetwork.

• Reducepaperconsumptionbycontinuingtotransformoursupplychainoperationstoeffective,electronicbusiness,includingonlinedraftingandexecutionofcontractdocumentation.

Approach

3

CommunityKeyachievementsin2007/08• Telstra’sinvestmentincommunityactivitieswasvalued

at$29.2millionbytheLondonBenchmarkingGroup.Thiscompareswith$18.8millioninthepreviousyear.

• Provided$3.9millionthroughtheTelstraFoundationtomorethan667projectstohelpconnectchildrenandyoungpeopletotheircommunities.

• Provideddomesticdisasterreliefservicestocustomersaffectedby:bushfiresinWillungainSA,andinParkervilleandStonevilleinWA;floodsinthecentralandnorthcoastofNSW;andfloodsinEmerald,Rockhampton,Mackay,Charleville,GoldCoast,Beenleigh,Jimboomba,Beaudesert,Rathdowney,Boonah,Clifton,Allora,WarwickandKillarneyinQld.

• ProvideddisasterrelieftocustomersaffectedbycycloneNargisinMyanmar(Burma)andtheearthquakeinSichuanProvinceinChina.

• Committed$750,000throughtheTelstraFoundationtosupportAbracadabra,auniqueinteractiveliteracysoftwaretoolthatwillhelpIndigenousprimaryschoolchildrenimprovetheirliteracyskills.AbracadabraisaprojectofCharlesDarwinUniversity.

• AnnouncedanewsponsorshippartnershipwithWWFAustraliatoproduceaseriesofcommunityserviceannouncementstohighlighttheendangermentofmanyAustraliannativeanimals.

• PilotedtheTelstraFoundationCommunityLeadershipprogram,linkingTelstraexecutiveswithnon-profitleadersina12monthmentoringrelationshiptohelpbuildthecapacityofcommunityorganisations.

Plannedactionsfor2008/09• Todevelopandpilotanemployeematchedgivingprogram

todonatefundstocommunityorganisationsnominatedbyTelstraemployees.

• Toprovideover$3.5millioningrantsthroughtheTelstraFoundationtohelpcommunityorganisationsconnectchildrenandyoungpeopletotheircommunities.

EmployeesKeyachievementsin2007/08• Achieved74percentemployeeengagement,indicating

theextenttowhichemployeesvalue,enjoyandbelieveinTelstraandwhattheydo.Thisresultisbasedonthe2008TelstraEmployeeEngagementSurveywithan84percentresponserate.

• Investedover$75millioninlearninganddevelopmentforouremployees,representinganinvestmentofaround$1,600peremployee.

• Employeescompleted573,763onlinelearningcoursesthroughLearn.Achieve,and6,500employeesparticipatedinFrontlineLeadershipprograms.

• Developed252newjob-specifictrainingcoursesthroughtheTelstraLearningAcademy.

• ConductedTelstra’sinauguralwomen’sconference,Stand.Out,whichwasattendedby150womenandfocusedonperformance,careerdevelopmentandtheadvancementofwomenatTelstra.

• PilotedtheMyMentorprogramforTelstrawomentoincreasestrategicbusinessskills.Basedonoutstandingfeedbackfromthe21participantsoftheinitialcourse,theprogramwasrolledouttoover440womenacrosstheorganisation.

• AwardedanExcellenceinAuslanInterpretingAward(privatesectororganisationcategory)bytheAustralianSignLanguageInterpreters’AssociationtopubliclyrecogniseTelstra’sconsistentsupportforworkingwithinterpretersandlong-standingcommitmenttocustomers,shareholdersandemployeeswhoaredeaf.

Plannedactionsfor2008/09• Increasetheproportionofwomeninmiddleandsenior

managementto30percent.

• IncreaseIndigenousemploymentopportunitiesby25percentbytheendofDecember2009aspartofTelstra’sIndigenousActionPlan2008-11.

• Maintainthehighest(ComcareTier3)ratingacrossallHealth,SafetyandEnvironmentcategories.

• Achieveaminimumof10percentemployeeparticipationinanewonlineHealthRiskAppraisalbyAugust2009toimproveemployeeunderstandingofhealthriskfactors.

Approach

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CustomersKeyachievementsin2007/08• Assistedmorethanonemillionlow-incomecustomers

toconnectormaintaintheircommunicationsservices.Thetotalbenefitprovidedwasinexcessof$200million.

• LaunchedTelstraConnectedSeniors®inAugust2007withover$750,000ofgrantfundingprovidedto110communityorganisationstohelpolderAustralianslearntousemobileandinternettechnology.

• ClosedtheCDMAnetworkon28April2008andcompletedthemigration(commencedinOctober2006)ofcustomerstotheNextG™network,providingmoreadvancedthirdgenerationmobiletechnology.

• Openedthelargeststate-of-the-artinteractivetelecommunicationsstoreinAustralia,T[life]™inMelbourneinJune2008afterthesuccessofT[life]™Sydney,whichopenedinNovember2007.

• TelstraEnterpriseandGovernmentCustomerCarewasawardedcertificationtotheInternationalCustomerServiceStandardbytheCustomerServiceInstituteofAustralia,demonstratingthatourorganisationhasapassionforcustomerexcellenceandtheprocessestodeliver.

• Receivedthe2007CorporateCommunityPartnershipAwardfromtheCountryAwarenessNetworkVictoria,recognisingTelstra’sexceptionalcommitmenttoVictoria’sruralandregionalcommunitiesthroughoursupportandassistancetoconsumersandclientsaffectedbyHIV/AIDSorHepatitisC.

Plannedactionsfor2008/09• ExtendtheTelstraBillAssistanceProgramtocovermobile

andinternetbillstorecognisethechangingnatureofcommunicationsusageamonglow-incomeAustralians.

• Provideaweb-basedinquiryformforinformationaboutaccessiblefeaturesofNextG™mobilehandsetstoenablepeoplewithadisabilitytochoosetherightmobilehandsetfortheirneeds.

• BuildonthesuccessofourworldclassT[life]™storesbyopeningorrefreshingmorethan80T[life]™storesacrossAustralia,toprovidearetailexperiencelikenootherforourcustomers.

• DeployenhancedHSPA(HighSpeedPacketAccessPlus)asanationalsoftwareupgradetoincreasepeaknetworkdownlinkspeedsacrossournationalNextG™networkfromthecurrent14.4Mbps1to21Mbpsbytheendof2008.

• WithsupportfromtheNTGovernmentandRioTintoAlcan,Telstrawillrollout800kmsoffibretoconnectninenorthernArnhemLandIndigenouscommunitiesandthetownshipofNhulunbuytothenation’sfibreopticbackbone.

EnvironmentKeyachievementsin2007/08• Saved25,332tonnesCO2equivalentthankstoprojects

targetingenergyefficiencyandrecyclingofpaper,cardboardandwood–comparabletothegreenhousegasemissionsfrom1,800averageAustralianhouseholdsforayear.

• Reducedtheconsumptionofofficepaperby35,900reams,a14percentreductionfrom2006/07.Thisrepresentsadecreasefrom7.2to6.5reamsperemployee.

• Reducedthenumberofvehiclesinourfleetby17percentwithacorrespondingreductioninfleetenergyuseof16.8percent.

• Operated10,265solarpoweredsites,includingexchanges,radioterminals,smallrepeaterstationsandpayphones.TelstraisoneofAustralia’slargestusersofsolarpower.

• EstablishedtheClimateChangeReviewGrouptomonitorandpromoteTelstra’sresourceconservationprogramsandactivities.

• EstablishedaPackagingInnovationGrouptoimproveefficienciesandreducetheenvironmentalimpactofourpackaging.

• CompletedaLifeCycleAssessmenttodeterminetherelativeenvironmentalimpactsofonlineandconventionalpaperbilling.

1Peaknetworkdownlinkspeed.Actualcustomerdownloadspeedswillbelessandwillvaryduetotrafficloading,distancefromthecell,

localconditions,hardware,softwareandotherfactors.

Approach

5

Plannedactionsfor2008/09• Calculatethecarbonfootprintsofallbusinessunits

andcorporategroups.

• Determinethecarbonintensity(tonnesofCO2e/unitofservice)ofTelstra’sEnterpriseandGovernmentserviceofferings.

• Increasethe2009EmployeeEngagementSurveyscorefor‘environmentresponsibility’.

• CompleteastudyonthehydrogenfuelcellfacilityandsolarpanelsinstalledatourMelbourneheadquarterstoassesstheirpotentialuseinTelstra’snetworkandbuildings.

• EnhanceTelstra’sdrivereducationprogramwithanawarenessprogramtoencourageourfleetdriverstoadoptgreendrivingtechniquestoreducefuelconsumptionandCO2emissions.

Approach

TelstratouchesnearlyeveryAustralian,everyday

6

Telstra profile TelstraistheonlycommunicationscompanyinAustraliathatcanprovideatrulyintegratedtelecommunicationsexperienceacrossfixedline,mobiles,broadband,information,transactions,search,andpayTV.Wehaveoneofthebestknownbrandsinthecountryandprovide9.4millionAustralianfixedlineandmorethan9.3millionmobileservices,including4.4million3Gservices.

Telstraprovides:

• basicaccessservicestomosthomesandbusinessesinAustralia;

• localandlongdistancetelephonecallsinAustralia,andinternationalcallstoandfromAustralia;

• mobiletelecommunicationsservices;

• broadbandaccessandcontent;

• acomprehensiverangeofdataandinternetservices(includingthroughBigPond,Australia’sleadinginternetserviceprovider);

• managementofbusinesscustomers’ITand/ortelecommunicationsservices;

• wholesaleservicestoothercarriers,carriageserviceprovidersandInternetServiceProviders;

• advertising,searchandinformationservices(throughSensis®,Australia’sleadingdirectoryandsearchcompany);and

• cabledistributionservicesforFOXTEL’scablesubscriptiontelevisionservices.

Performance indicator 06/07 07/08

Financial

Salesrevenue $23.7billion $24.7billion

EBIT $5.8billion $6.2billion

Profitaftertaxandminorityinterests $3.3billion $3.7billion

Ordinarydividends(centspershare) 28 28

Socio-economic

Totalworkforce 47,840 46,649

Totaldomesticworkforce 35,706 33,982

Wagesandsalaries $4billion $4.2billion

Local,stateandcommonwealthtaxes $1.8billion $1.7billion

Dividendstoshareholders $3.4billion $3.4billion

Accruedcapitalexpenditure $5.9billion $4.9billion

Community

LondonBenchmarkingGroup(LBG)measureofcommunityinvestment $18.8million $29.2million

Employees

Employeeengagement 73% 74%

Womeninmanagementroles 25.8% 24.6%

Losttimeinjuriesfrequencyrate(permillionhoursworked) 2.14 2.54

Highlyeffective/effectiveHealthSafety&Environment(HS&E)audits 88% 71%

Learning&developmentinvestment $60million $75million

Learning&developmentinvestmentperemployee $1,500 $1,626

Keyperformanceindicators

Approach

7

Performance indicator 06/07 07/08

Environment

Greenhousegasemissions(tonnesCO2e) 1,390,306 1,500,803

Greenhousegasemissions(tonnesCO2e/$millionrevenue)includingunmeteredsites N/A 60.4

Greenhousegasemissions(tonnesCO2e/$millionrevenue)excludingunmeteredsites 58.7 57.8

Greenhousegasemissionstotalsavings(tonnesCO2e) 173,998 173,686

Totalwasterecycled(tonnes) 33,266 32,981

Wasterecycled 65% 69%

TotalenergyUse(GJ) 5,848,601 6,064,687

TotalenergyUse(GJ)/$millionrevenue 247.1 244.3

Volumeofofficepaper(reams) 256,774 220,856

Volumeofpaper(reams)peremployee 7.2 6.5

Watersavings(kilolitres) 87,318 52,019

Telstraowns50percentofFOXTEL,anditsinternationalbusinessesinclude:

• CSLNewWorld,oneofHongKong’sleadingmobileoperators;

• TelstraClearLimited,thesecondlargestfullservicecarrierinNewZealand;

• ReachLimited,aproviderofglobalconnectivityandinternationalvoiceandsatelliteservices;and

• majoritystakesinSouFunHoldingsLimited,aleadingrealestateandfurnishingswebsiteandNorstarMediaandAutohome/PCPop,twoChineseinternetbusinessesoperatingautoanddigitaldevicesites.

Corporate governance at TelstraTheTelstraBoardhasdeterminedthatTelstra’scorporateobjectiveistocreatelong-termshareholdervaluethroughprovidingintegratedcommunication,informationandentertainmentservices,andcustomerfocusedsolutions.

TheTelstraBoardiscommittedtoexcellenceincorporategovernanceandtheenhancementofitsshareholders’interests.OurmaincorporategovernanceandBoardpracticesaredescribedinourAnnualReport,availableatwww.telstra.com.au/abouttelstra/investor

Weregularlyreviewandupdateourcorporategovernancepractices.TheBoardevaluatesand,whereappropriate,implementsrelevantproposalswiththeaimofensuringthatwecontinuetodemonstrateourcommitmenttogoodcorporategovernance,havingregardtodevelopmentsinmarketpracticeandregulation.

WecomplywiththeASXCorporateGovernanceCouncil’sPrinciplesofGoodCorporateGovernanceandBestPracticeRecommendationsreleasedinMarch2003.FollowingareviewofTelstra’sgovernanceframeworkandinlightofthereleaseoftherevisedASXCorporateGovernancePrinciplesandRecommendations(2nded)(RevisedPrinciples&Recommendations),theTelstraBoardmadethedecisiontoadopttheRevisedPrinciples&Recommendationsforthe2008financialyear,aheadofthetimethattheybecomemandatory,asencouragedbytheASXCorporateGovernanceCouncil.

TheTelstraValuesprovidethemostfundamentaldirectiononwhattypeofcompanyweaspiretobe,andwhattypeofbehaviourweregardasappropriate.Asavalues-drivencompanywegobeyondsimplycomplyingwithminimumstandardsofpersonalconduct.Ourgoalistomakeeverydecisionandeveryactiononethatwecanbeproudof.

Keyperformanceindicatorscontinued

Approach

8

Corporate responsibility governanceAtTelstra,ourcommitmenttocorporateresponsibilitybeginswithasimpleandstraight-forwardcommitmenttoprincipleddecision-makinginallthatwedo.

TheTelstraValues,Telstra’sBusinessPrinciplesandCompanyPolicies,includingtheCodeofConduct,setoutthepractices,principlesandstandardsofbehaviourTelstraexpectsemployeesandcontractorstoadoptinperformingtheirwork.Togethertheyreflectourobligationsandunderpinthewayweworkwithourcustomers,ourshareholders,ourcolleagues,theregulatorybodieswedealwith,oursuppliersandstakeholdersinthecommunity.

DavidQuilty,GroupManagingDirector,PublicPolicy&Communications,hasresponsibilityforTelstra’sCorporateResponsibilityBusinessPrinciple,whichstatesthat,fromaprincipledperspective,ourprimarycorporateresponsibilitiesareto:

• providegoodjobsatgoodwages;

• servetheneedsofourcustomers;

• increaseshareholdervalueandprotectshareholderinterests;

• providegoodstewardshipoftheenvironment–firstandforemostbyconservation(ie,byincreasingefficiencyinthewayweuseresources),reducingoperatingcostsandminimisingourenvironmentalfootprint;

• contributeresources–people,money,technology,productsandservices–tosupportthecommunitiesinwhichweoperateandtheneedsofthelargersociety;and

• advancethenationalinterestbystrengtheningthecapacityofthenation’stelecommunicationsnervecentre,operatedbyTelstra,andprovidingthenationafoundationforeconomicgrowth,productivityimprovement,sustainableprosperity,andglobalcompetitiveadvantage.

Allmanagersandsupervisorsarerequiredtotakeallreasonablestepstoensurethatemployeesandcontractorsundertheirsupervisionhaveaccessto,areawareof,andcomplywith,allrelevantTelstraBusinessPrinciplesandtherelatedcompanypolicies.Telstraexpectsitsmanagersandsupervisorstofosteraworkenvironmentthatencouragesethicalbehaviourandcompliance.

Assuch,corporateresponsibilityispartofourdaytodayactivities.Management,supervisorsandstaffaresupportedbytheCorporateResponsibilityandCommunityInvestmentteam,whichprovidestheoperationalmanagementandcoordinationofcorporateresponsibilityactivitiesandcommunications.Inaddition,workinggroupsareestablishedtoaddresskeysocialandenvironmentalissuesastheyarise.Forexample,in2007/08theClimateChangeReviewGroupwasestablishedtoensureacoordinatedapproachtomanagingclimatechangeissues.

Reporting and benchmarking performanceTelstraiscommittedtoimprovingourcorporateresponsibilityperformance.Weparticipateinexternalsurveystobenchmarkourperformanceandproduceanannualreporttohighlightourachievementsandchallenges.

In2007/08,TelstraparticipatedintheCorporateResponsibilityIndex,achievingaratingof87percent,withoutstandingresultsincommunitymanagement(100percent).Wewillbetakingaleaveofabsencein2008/09inordertofocusonimplementingstrategiestofurtherimproveourperformance.

In2008,wealsocompletedasubmissiontotheDowJonesSustainabilityIndexandachievedaratingof70percent.Thisindexidentifiescompaniesthatleadpeersincreatinglong-termshareholdervalueandassessesabilitytomanageriskandleverageupsideacrosstheeconomic,socialandenvironmentalagenda.

Tomeasureourcommunitycontribution,TelstraparticipatedintheLondonBenchmarkingGroup(LBG)processforthesecondtimein2008.LBGAustralia/NewZealandisabusinessmembershiporganisationthatprovidesaframeworkformemberstomeasureandbenchmarktheircorporatecommunitycontribution.

For2007/08,Telstra’scorporatecommunitycontributionwasvaluedat$29.2million,buildingonthecontributionof$18.8millionduring2006/07.TheincreaseisattributedtotheinclusionthisyearofawiderrangeofTelstra’scommunityinvestmentactivities,theone-offcontributionstosupportvictimsofcycloneNargisinMyanmarandtheearthquakeintheSichuanprovinceofChina,andTelstra’svoluntarycontributionsintheleaduptoWorldYouthDay2008.

Telstrahasreportedannuallyonitscorporateresponsibilityperformancesince2003throughitsCorporateResponsibilityReports.Thesereportscanbeaccessedonourwebsiteat www.telstra.com.au/abouttelstra/csr/reports.cfmalongwithsummaryreportsofCRI,DJSIandLBGresults.

2003 2004 2005 2007

CorporateResponsibilityIndexresults

88.49% 90.21% 88.6% 87%

Approach

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Stakeholder engagementAsacompanythattouchesthelivesofnearlyeveryAustralianeveryday,Telstrahasawiderangeofstakeholdergroupsandalonghistoryofengagingwiththem.Consultationanddialoguewithkeystakeholdergroupshelpstogatherinputandideas,informourdecisionmaking,strengthenourrelationshipsandbuildtrust.Telstramakesagenuineefforttoengagewithandunderstanditskeystakeholders,throughbothformalandinformalmechanisms.Webelievethatengagementandconsultationhelpsustobettermeetourcustomers’needs,improvescustomerloyalty,enhancesemployeesatisfaction,buildsbroadercommunitysupportandultimatelystrengthensshareholdervalue.

Stakeholder Interests and concerns Engagement methods

All Australians AustraliansareinterestedinthefullrangeofTelstra’sactivities

nowwearetalking.com.au–onlineforumforpeopletobecomeinvolvedandhaveasayonissuesaffectingallAustraliansandthetelecommunicationsindustrywww.telstra.com–Telstra’scorporatewebsiteprovidesinformationforcustomers,shareholdersandotherinterestedmembersofthepubliconthelatestactivitiesatTelstra.Includespublicreports

Communities

Telstraoperatesincommunitiesacrossthemetropolitan,regionalandremoteareasofAustralia.Ourcommunitiesincludenon-governmentorganisations

Communitiesareconcernedaboutaccesstoservicesandtheimpactofourbusinessonlocalcommunities

• TelstraCountryWideRegionalConsultativeForumhelpstoidentifythecommunicationsissuesofimportanceinregionalAustralia

• OurmobilephonebasestationsitingconsultationprocesseshelpTelstraoperateresponsiblyindesigning,operatingandmanagingmobilephonebasestationsandtominimisetheirimpactonthecommunity

• TelstraFoundationengageswithcommunityorganisationsonissuesimpactingthelivesofchildrenandyoungpeoplethroughitsphilanthropicgrantsprogram

Customers

Ourcustomersincluderesidentialconsumers,smalltomediumenterprisesandlargecompaniesandorganisationsandgovernment

Ourcustomersareinterestedinthequality,affordabilityandaccessibilityofourproductsandservices,andtheprivacyandsecurityoftheirpersonalinformationandservices

TelstraDisabilityForumandDisabilityEquipmentProgramConsumerAdvisoryGroupprovidemechanismsforconsultationonourdisabilityactionplanTelstraConsumerConsultativeCouncilandCreditManagementWorkingGroupfacilitatediscussiononissuesthateffectresidentialcustomersLowIncomeMeasuresAssessmentCommitteeprovidesadviceontheongoingeffectivenessofTelstra’slow-incomepackageT[life]™shops,CustomerExperienceCentre,TelstraMentors,andtheCommunityAdvocacyProgramprovideopportunitiesforustoassistourcustomerstomeettheirneedsWeundertakeongoingmarketingandresearchtohelpusunderstandwhatourcustomerswant

Approach

10

Stakeholder Interests and concerns Engagement methods

Employees

Telstra’sworkforceislargeanddiversewith33,982employeesinAustralia

Ouremployeeshaveabroadrangeofconcerns,includingworkingconditions,developmentopportunitiesandhealthandsafety,aswellasawiderangeofinterestsinissuesaffectingtheirlocalcommunitiesandenvironments

• EmployeeEngagementSurveyprovidesallemployeestheopportunitytoexpresstheirviewsabouttheirjobs,thecompanyandtheirworkingenvironment

• YabberisaTelstraintranetsitethatprovidesemployeesanopportunitytosharetheirpersonalstories–triumphs,challengesandpassions–withallstaff

• EmployeeengagementopportunitiesrelatingtosocialandenvironmentalissuesincludetheDiversityChampionNetwork,VirtualWomen’sNetworkandGreen.Challenge@Telstra

Government

Ourgovernmentstakeholdersareatlocal,stateandnationallevels,fromMinistersandleaderstodepartmentstaff

Telstracommunicatesregularlywithgovernmentsonarangeofcommercial,policy,regulatoryandothermattersintheinterestsofitsshareholders,customersandemployees

• Telstra’sdealingswithgovernmentsareconductedopenlyandhonestly

• Constructiverelationshipsarebuiltandmaintainedacrossalllevelsofgovernmentbyourseniorleadership,Telstra’sGovernmentandCorporateRelationsteamandTelstraCountryWide

• Wearerequiredtoworkwithinrelevantgovernmentlegislativeframeworksandtoreportourcomplianceandperformance

• OurRegulatoryAffairsteammanagesTelstra’srelationshipwithstatutoryregulatorsandindustrybodies

• Telstraparticipatesinregularforumsandselectedeventswithlocal,stateandFederalgovernmentagencies

• Telstra’sEnterpriseandGovernmentbusinessunitworkswithgovernmentcustomerstodevelopanddeliveraccesstoworld-classinformationandcommunicationsolutions

Industry

ThesestakeholdersincludeInformationandCommunicationTechnology(ICT)andtelecommunicationsspecificassociations,aswellassector-specificassociations

Industrystakeholdersareinterestedinissuesimpactingthetelecommunicationsindustry,includingregulation,markettrends,consumerprotection,andtechnologyandservicedevelopments

• TelstraisamemberofthekeyICTindustrygroups,includingtheCommunicationsAlliance,theAustralianMobileTelecommunicationsAssociation,theAustralianInformationIndustriesAssociation,theInternetIndustryAssociation,andtheAustralianInteractiveMediaIndustryAssociation

• TelstraisamemberoftheMobileCarriersForumthatdealsspecificallywithsocialandenvironmentalissueswithinpolicy,regulatoryandoperationalenvironmentsassociatedwiththedeploymentandoperationofmobilephonenetworks

• Telstra’sIndustryAnalystRelationsfunctionstrengthensdomesticandglobalrelationshipswithspecialistanalystsonICTindustriesandmarkets

• TelstraisamemberoftheAustralianIndustryGroup,Australia’smajorbusinesslobbygroup

• TelstraisamemberoftheAustralianServicesRoundtable,thepeaklobbygroupfortheAustralianservicessector

Approach

11

Stakeholder Interests and concerns Engagement methods

Investment community

Thisstakeholdergroupincludesinstitutionalinvestorsandsell-sideanalysts

Investorsandanalystsareconcernedwiththeriskinherentinandreturnprovidedbytheirinvestment,andtheabilityofthecompanytomeetitsobjectives

• OurannualInvestorDayisanopportunityforTelstratoprovideadetailedupdatetothefinancialmarketsontheperformanceofthevariousbusinessunitsandonthecompany’stransformation

• TheInvestorCentreatwww.telstra.com.au/abouttelstra/investorisadedicatedresourceforshareholdersandpotentialinvestors

• TheInvestorRelationsunitregularlyengageswithinvestorsandanalysts,andco-ordinatesmeetingsfortheinvestmentcommunitywithseniormanagement

Media

Includesrepresentativesfromprint,radio,TVandonlinemedia

ThemediareportsonTelstramorethananyotherbusinessororganisationinAustralia

• Telstraengagesregularlywiththemediathroughourmediaspokespeople,corporateaffairsmanagers,generalmanagersandotherappropriateofficerswithinthecompanytoprovideinformationthatisinthepublicinterest

Shareholders

Telstrahas1.4millionshareholders

Shareholdersareinterestedinfinancialreturns,companyperformanceandgovernanceissues

• Telstravaluesadirect,two-waydialoguewithshareholdersandbelievesitisimportantnotonlytoproviderelevantinformationquicklyandefficiently,butalsotolisten,understandshareholders’perspectivesandrespondtotheirfeedback

• TelstrakeepsshareholdersinformedthroughAnnualGeneralMeetings,anannualreportandbi-annualshareholderupdates

• TheInvestorCentreatwww.telstra.com.au/abouttelstra/investorisadedicatedresourceforshareholdersprovidinginformationaboutoursharepriceandfinancialperformance,presentationsandannualreports

Suppliers

Telstraengageswitharound8,000supplierseachyearwithatotalspendaround$11billion

SuppliersareinterestedinsecureandstablerelationshipswithTelstra

• Telstraregularlyengageswithsuppliersthroughoutandafterthesourcingprocess.OurvendormanagersmonitorandmanageTelstra’scommercialrelationshipwithitssuppliersandaddressdelivery,quality,socialandenvironmentalissues

• TheSupplyingtoTelstrawebsiteatwww.telstra.com.au/supplying_to_telstraprovidespracticaladvicetoprospectiveandcurrentsuppliersonsupplyingtoTelstra

Approach

12

Our material issuesIndeterminingourmaterialissues,Telstrahasconsideredthesignificanteconomic,environmentalandsocialimpactsofourbusinessthatmayaffectourvalue,operations,reputationandlongevity.Wehavetakenintoaccountthefollowingkeyinternalandexternalfactors:

• businessstrategyandimpactofTelstra’stransformation;

• Telstra’scompanyvalues,codeofconduct,businessprinciplesandcorporateresponsibilityprinciples;

• corecompetenciesofTelstra;

• significantriskstothecompanyandcriticalfactorsforensuringTelstra’ssuccess;

• keyfuturechallengesforourindustry;

• concernsraisedbyourstakeholdersthroughtherangeofmechanismswehaveinplaceforstakeholderengagement;

• relevantlawsandregulations,forexampletheproposedNationalGreenhouseandEnergyReportingSystemandtheEmissionsTradingScheme,andthenewForwardwithFairnessindustrialrelationslegislation;

• keyfuturechallengesforoursocietyasidentifiedbysocialandenvironmentalexperts,governmentsandgrassrootscommunityorganisations;and

• sustainabilitycontext,includingtheGlobalReportingInitiative,MillenniumGoals,andUnitedNationsGlobalCompact.

Telstra’sCEOSolTrujilloandNationalEnergyManagerAllanGontarviewthenewlyinstalledhydrogenfuelcellandsolarpanelinJune2008.

Approach

13

Issue Main stakeholders affected Impact Key elements of Telstra’s response See pages

Climatechange

CustomersShareholdersCommunitiesIndustry

Telstrahasasignificantopportunitytocontributeconstructivelytoreducethecarbonintensityofsocietythroughtelecommunicationsproductsandservices

Telstraisspreadingthemessagethroughourlandmarkpublication,Towards a High-Bandwidth, Low-Carbon Future: Telecommunications-based Opportunities to Reduce Greenhouse Gas Emissions,andbydevelopingofferingsthathelpourcustomersreducetheircarbonemissions

16

Extendingaccesstocommunications

CustomersShareholdersCommunitiesIndustryGovernment

Deliveringanewhigh-speedNationalBroadbandNetworkacrossAustraliaisoneofthemostsignificantcontributionsTelstracouldmaketothecountry’seconomicdevelopment,socialinclusionandglobalcompetitiveness

Telstra’scommitmenttoitsshareholdersandthewidercommunityhasunderpinnedapassionateandtargetedBroadbandAustraliaCampaign

15

Regulatoryenvironment

CustomersShareholdersCommunitiesIndustryGovernment

TheregulatoryenvironmentcontinuestoimpedeTelstra’sabilitytoinvestconfidentlyinnewtechnologyandtodeployadvancedservicestoallAustralians

WeengagewithgovernmentandregulatorstolobbyforaregulatoryenvironmentthatenhancesthepotentialforinvestmenttoprovideAustraliawiththetechnologytocompeteinternationally

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Energyefficiency

CustomersShareholdersCommunitiesEmployees

LikeallAustralianbusinesses,TelstrafacesuncertaintyabouttheimpactonourbusinessandonthewidereconomyoftheproposedCarbonPollutionReductionSchemeandrelatedpolicies

Wearecommittedtoimprovingourenergyefficiencyacrossourbusiness,supplychainandcustomerbase

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Employeerelationships

EmployeesContractors

ThesuccessofTelstra’stransformationandoureconomicsustainabilityreliesonstrongemployeerelationships

Wearecommittedtocreatingasafeandengagingworkingenvironmentforourpeople

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Humanrights EmployeesSupplychainCustomersCommunities

Thereisgrowinginterestintheroleofbusinessesinadvancinghumanrights.ConsiderationofhumanrightsinTelstra’sbusinessdecisionsandoperationshasthepotentialtomanageriskandrealisenewbusinessopportunities

Telstraaddresseshumanrightsconcernsinourworkforce,productsandservicesandsupplychain

26&38

Approach

1Society matters

We believe that what is good for Australia, is good for Telstra. We take our corporate responsibility seriously.Phil Burgess, outgoing Group Managing Director, Public Policy & Communications

Businessenterprisessignificantlyimpactsocietyinwaysthatreachwellbeyondthecommunitysphere.Astheprincipalwealth-creatinginstitutionsofoursociety,businessandtheprivatesectormustplayapivotalroleinshapinganation’ssocial,economicandenvironmentalpoliciesandcontributingtoprogressandprosperityineverysphere–fromtheartsandstrongcivicinstitutionstoeconomicdevelopmentandtaxpolicy.

Considertheeconomicdimensionofcorporateresponsibility.Telstra’smostimportantachievementoverthepastyearistoprovidejobstoover46,000people,paying$4.2billioninsalariesandwages.Wealsopaid$3.4billionindividendstoshareholders;paidover$1.7billioninCommonwealth,stateandlocaltaxes;purchasedmorethan$11billioningoodsandservicesfromaround8,000suppliers,manyofthemsmallandmedium-sizedbusinessesthatprovidejobs,taxesandwealthtolocalcommunities;andinvestedseveralbilliondollarsinnetworkmaintenanceandimprovements–includingtwohigh-speednextgenerationnetworks.Whenyoustopandthinkaboutit,theeconomicsofTelstra’soperationhaveasignificantsocialimpact.

Itisalsoimportantthatcorporationsseekopportunitiestoadvancethenationalinterest.ForTelstrathismeansnotjustcomplyingwithlawsandregulationsbutalsoadvocatingforreformwherereformisneeded,strengtheningthecapacityofthenation’stelecommunicationsnervecentreand,throughthis,providingthenationwithafoundationforeconomicgrowth,productivityimprovement,increasedprosperity,andglobalcompetitiveadvantage.

AtTelstra,wehavea21stcenturyvisionforAustralia:toadvancetheeconomic,social,andcommercialinterestsofpeople,businessandcommunitiesinAustraliabymaximisingthebenefitsofdigitaltechnologies.Already,wehavedeliveredtheNextG™wirelessbroadbandnetworkandweareeagertoprovideahigh-speedfibre-basedNationalBroadbandNetworkforthecountry.

AsAustralia’slargesttelecommunicationscompany,wearewellplacedtohaveameasurableandpositiveimpactonthenation’swell-beinganditssocial,economicandcommercialperformance.BusinessesofallsizesareusingTelstra’snextgenerationnetworksininnovativewaystosavetimeandfuel,andtoincreaseproductivity.PeopleandcommunitiesareusingTelstranetworkstoconnecttoeachotherandtheoutsideworldandtoreducethetyrannyofdistance–abigissueforAustraliabecauseconnectivityistheprimarydriverofpoliticalstability,economicprosperity,andsocialmobility.

Becausewebelieveinastrongcivicorder,webelievebusinessengagementinissuesofnationalimportanceisessentialtoahealthyandresilientsociety.Telstraseesthisengagementasacorporateresponsibility.Weengageonkeysocialandenvironmentalissuesthatchallengeournation,suchasclimatechange,cyber-securityandimprovementsinthewaywedeliverhealthandeducationservicestothepublic.Wealsoprovideapublicforumforeducationanddialogueabouttheimpactoftelecommunicationsonsocietywithournowwearetalkingwebsite.

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Telstra’sprimarysocialresponsibilityasabusinessenterpriseistoprosperandinnovate.Itmakesgoodbusinesssensetomeasurethefullimpactofourbusinessdecisionsonthelargersociety,toidentifywayswecanimprove,andtocontributepositivelytoAustralia’sfuturedevelopment–becausewebelievethatwhatisgoodforAustraliaisalsogoodforTelstra.

Influencing public policy Webelieveoneofthegreatstrengthsofdemocraticsocietiesisthattheyprovideahealthyarenaforvigorousdebatebetweenthepublicandprivatesectorsonimportantnationalmatters.That’swhyTelstraparticipatesindebatesonissuesthatimpactourbusiness,aswellasoureconomicandsocialcontribution.

National Broadband NetworkTelstrabelievesthatdeliveringanewhigh-speedbroadbandnetworkacrossAustraliaisoneofthemostsignificantcontributionswecanmaketothecountry’seconomicdevelopment,socialequityandglobalcompetitiveness.

ANationalBroadbandNetwork(NBN)willallowAustralianconsumersandbusinessestousenewapplicationsandservicesbeingdevelopedhereandaroundtheworld.Theseservicescanimproveaccesstohealthcare,education,publicsafety,onlinemediaandgovernmentandbusinessinformationandservices,especiallyforruralandregionalAustralians.

WebeganwithourNextG™wirelessbroadbandnetwork,andhavebeenplanningtobuildanNBNforoverthreeyears.JustasTelstrahasbeenthecompanytodelivertelecommunicationsthroughoutAustraliaforover100years,wearereadytobuildthisnetwork,aslongasitmakesbusinesssensetodoso.

Amassive,high-riskinvestmentisnecessaryfortheNBN,butthecurrentregulatoryregimeunderminesthepotentialforinvestmentbyleavingthedooropentotheregulator,theAustralianCompetitionandConsumerCommission(ACCC),toshiftthegoalpostsafterthenetworkhasbeenbuilt.

AustralianeedsaparadigmshiftinitsregulatoryenvironmentifitistoencouragetheinvestmentrequiredtogettheNBNbuilt.Telstrahasbeenworkingtowardsthis,andatthesametime

pursuingreformstoPartXICoftheTradePracticesActthatarecurrentlyprovidingawiderdisincentivetoinvestment.

AspartoftheNBNdiscussion,Telstraisalsoadvocatingforathoroughexaminationofthevariousregulationsthathaveasocialpolicyimpact,toensuretheobligationsofnetworkprovidersarefullycostedandresponsiblyassigned.

In2007/08,TelstrachallengedthecurrentextentofregulationthroughseveralmajorexemptionapplicationsmadetotheACCC.Theapplicationsaddressedregulatoryconstraintsthatcurrentlyhinder,orputatrisk,afairandcompetitiveoperatingorindustryenvironment.Forexample:

• Telstra’ssubmissiontotheNBNregulatoryreviewchallengedconventionalregulatorypolicyandoutlinedameansthroughwhichamulti-billiondollarinvestmentinnextgenerationaccesscouldproceed;

• weadvancedthecasetoputfundingoftheUniversalServiceObligation(USO)onamoresustainablefooting.Telstra’ssubmissiontotheUSOreviewproposednewmodelstomoreaccuratelyestimatethecostofrural,residential,businessandpayphoneservicestobetterargueforenhancedfundingforruralandremoteservices;and

• TelstrarolledoutADSL2+broadbandtechnologytoafurther907exchangesthatserveatotalof2.4millionpremisesaftertheFederalGovernmentsupportedthepositionthattherewasnocompellingcasefordeclaringaccesstoADSL2+services.

BroadbandAustraliaCampaignTelstra’scommitmenttoitsshareholdersandthewidercommunityhasunderpinnedapassionateandtargetedcampaigntoeducate,mobiliseandinfluence,throughdemocraticprocesses,thedecisionsthattheFederalGovernmentmakesaboutpublicpolicy,andtoshifttheregulatoryburdenonTelstra.

PriortoourBroadbandAustraliaCampaign,verylittleinformationabouttheimpactofregulationsonTelstraandthetelecommunicationsindustryhadbeenprovidedtoconsumersandshareholders,despitethesignificantimplicationsoftheseissuesforthenation.

Byenlargingthearenaofdiscoursetoinvolveshareholders,opinionleadersandthegeneralpublic,Telstrashiftedthediscussionsfrombehindcloseddoorsandthespecialistlanguageofregulators,lawyersandeconomists.

EstablishedinFebruary2007,ourBroadbandAustraliaCampaigncontinuedtocapturethesupportofstaff,Telstrashareholdersandmembersofthepublicwhoralliedbehindourcallforanationalcommitmenttobuildinganewhigh-speed,nationalbroadbandnetwork.

Morethan11,000peoplesignedupasTelstraActiveSupportersviaourwebsite,www.nowwearetalking.com.au.ThesitefeaturedthelatestWeb2.0onlineactivismtoolsthatgavesupportersandthousandsofotherAustraliansinformationandthemeanstoallowtheirvoicetobeheardinthedebateonbroadbandissues.

Achievementsin2007/08included:

• morethan18,000peopleputthemselves‘onthemap’callingforhigh-speedbroadband;

• morethan7,000peopleusednowwearetalkingtosendemailstolocalMPsand/ortheMinisterforCommunications;and

• almost4,000peoplesentemailstotheChairmanoftheACCC.

Weachievedouraimtoelevatehigh-speedbroadbandtoafirst-tierpublicpolicyissueinAustraliaandasacentralissueintheNovember2007Federalelection.TheAustralianLaborParty’scommitmenttodeliverjustsuchanetworkwasakeypolicyposition.

ThenewFederalLaborGovernmentre-namedtheCommunicationsMinister’sportfoliototheMinisterforBroadband,CommunicationsandtheDigitalEconomy,andcommencedatenderprocessforafibre-to-the-nodenetworktodeliverhigh-speedbroadbandto98percentofAustralians.

In2007/08,TelstraActiveSupportersalsovoicedtheirprotesttotheFederalLiberalGovernmentawarding$958millionoftaxpayer’sfundstotheSingTelOptusandEldersjointventureOPEL.ThedecisionwassubsequentlyoverturnedbythenewFederalLaborGovernmentinApril2008.

1. Society matters

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1. Society matters

nowwearetalkingSinceDecember2005,Telstra’snowwearetalkingwebsite,www.nowwearetalking.com.au,hasprovidedaforumforpubliceducationanddialogueabouttheimpactoftelecommunicationsonsociety.TheinitiativeisrepresentativeofhowthenewTelstracommunicateswithitsstakeholdersdirectlyandmorefrequentlyacrossabroaderrangeofissues.

ThisyearthewebsitehasundergonearedevelopmentandhaslaunchednowwearetalkingTV,withanincreaseofvideoonthewebsite.nowwearetalkinghascontinueditsreputationasoneofcorporateAustralia’smostinnovativeonlineforums.Duringthe2007Federalelection,nowwearetalkingdedicatedaspecialElection2007areathatwasaone-stop-shopforinformationontelecommunicationspolicyduringtheelection.Thesitewasfreefromeditorialcommentsandwasavailableforallpoliticalpartiestopublishtheirpolicies.ThewebsitealsostreamedalivedebatebetweenthethenMinisterofCommunicationsandShadowMinisterofCommunicationsontelecommunicationspolicy.

VisitorstothewebsiteincludeTelstrastaff,customers,shareholders,politicians,competitorsandmedia,alleagertosharetheirviewsandopinionsonissuesaffectingTelstra,thewidertelecommunicationsindustry,andthenation.nowwearetalkingcarriesnewsandviewsfromallperspectives–includingthosewhodoanddon’tagreewithTelstra.Overamillionpeopleayearvisitthewebsiteandweaimtoincreasethattoover1.5millionoverthenext12months.

nowwearetalkingisaimedatencouragingpeopletobecomemoreinterestedin,andtalkmoreabout,thedigitalrevolution,andhownewdigitaltechnologiescanexpandchoicesforpeople(ofallagesandinterests),enterprises(bothlargeandsmall),andcommunities–nomatterwheretheyarelocatedinAustralia.Thewebsiteraisesawarenessabouthowsomepublicpoliciesandadministrativepracticespreventconsumersandthenationasawholefromenjoyingthefullbenefitsoflivinginthedigitalage.

In2008/09nowwearetalkingwillhavespecialsectionsdedicatedtotheenvironmentandtheNBN.

Climate changeClimatechangehasbeenthedefiningsocialissueofrecentyearsandTelstrahasbeenproudtotakealeadershippositionintheemergingdebate.SincetheelectionoftheFederalLaborGovernmentinNovember2007,therehasbeenanotableaccelerationinpublicpolicydevelopmentandthishascoincidedwithinternationaltrends.TheUnitedNationsconferenceonclimatechangeinBaliduringDecember2007wasmarkednotjustbyAustraliaratifyingtheKyotoProtocolbutalsobyaroadmaptowardsanewglobalclimatetreatytocomeintoforcefrom2012.

Towardsahigh-bandwidthlow-carbonfutureInthecontextofintensedebateaboutthedesignandpotentialeconomicimpactsofanemissionstradingscheme,numerousstate-basedandvoluntaryschemestopromoterenewableenergy,carbonoffsets,andenergyefficiency,Telstrawentbacktothebasics–conservationofresources.LaunchedinOctober2007,ourlandmarkpublicationTowards a High-Bandwidth, Low-Carbon Future: Telecommunications-based Opportunities to Reduce Greenhouse Gas Emissions,commissionedfromindependentexpertsClimateRisk,hastakenourresourceconservationmessagetoanewfrontier.

Thereportbrokegroundinseveralways.First,itfocusedattentiononreducingenergyconsumptionastheprimarymeanstoachievemeaningfulcarbonabatement.Second,itdescribedseveninnovativewaystousetelecommunicationsnetworkstodeliversavingsthroughouttheeconomy.Third,itwentasfarastoquantifythesavingspotentialofthesecarbonopportunities–almostfivepercentreductioninAustralia’stotalannualgreenhousegasemissionsby2015.Finally,thereportwassubjectedtopeerreview,togiveindependentassuranceoftherobustnessofitsfindings.

Theresponsetothereporthasbeenremarkable.Thereporthasbeenwidelyquotednationallyandinternationallyasdemonstratingapracticalandoutward-lookingapproachtothechallengesposedbyclimatechange.

RoleoftelecommunicationsTelstra’sCEOSolTrujillochampionsthecasefortelecommunicationstoaddressclimatechangeatlocalandmajorinternationalforums.SolTrujillowastheonlyAustralianCEOinvitedtositona16-memberWorldEconomicForumsteeringcommitteeonclimatechange.Thesteeringcommittee’sstatement–signedby100CEOsfromsomeoftheworld’sbiggestcompanies–urgestheG8leaderstotakeimmediateactiontotackleclimatechange,andsaysthatbusinesshastheskills,expertiseanddrivetoleadthecharge.

TheFederalGovernment’sproposedrolloutofaNationalBroadbandNetworkto98percentofAustralianswillstrengthenoureffortsfortelecommunicationstoaddressclimatechange.ThisinvestmentwillenableAustralianstoaccesstelecommunications-basedservicesthatcanhelpthemreducetheircarbonemissions.Initiativessuchasremotediagnosisofheathissues,telecommutinginsteadofnon-productivehoursspentintrafficgoingtoandfromwork,andvideoconferencinginsteadoftraveltomeetingsarejustsomeoftheimmediatelyavailablewaystelecommunicationscanbeusedtoreduceourimpactontheenvironment.

TelstrahasalreadytakentheleadinAustraliabyshowingthatbetteruseoftelecommunicationscanreducegreenhousegasemissions.WeareworkingwiththirdpartiesacrossAustraliatodevelopinnovativesolutionsthatwillreducetheiroperationalcosts,improveefficiencyandreducetheirenvironmentalfootprints.

RegulationWithcontinuingexpansionofenvironmentalregulationatState,TerritoryandFederalgovernmentlevels,ourcomplianceandreportingobligationsareincreasing.Climatechangeisbringinganewsetofobligationsintothemix,withsomevariationfromjurisdictiontojurisdiction.TelstrahasmadesubmissionstotheFederalGovernmentontheEnergyEfficiencyOpportunitiesAct,NationalGreenhouseandEnergyReportingAct,andtheAustralianCompetitorandConsumerCommissionwhitepaperongreenmarketing.Ourpolicysubmissionshaveemphasisedthedesirabilityofstreamliningregulation.

Telecommunications-based opportunities to reduce greenhouse gas emissionsCase studyTelecommunicationsnetworkscanhelpreduceAustralia’sgreenhousegasemissionsbyalmostfivepercentby2015anddeliverupto$6.6billionayearincostsavingsforAustralianbusinessesandhouseholds,accordingtoareportreleasedbyTelstrainOctober2007.

AsaleadershipinitiativeTelstracommissionedclimatechangeexpertstoquantifythepossiblecarbonanddollarsavingsthatcouldbeachievedbybusinessenterprises,householdsandgovernmentsbyusingtelecommunicationsnetworkstoavoidorreduceratherthanjustoffsettheircarbonemissions.

TheReportfoundtelecommunicationsnetworkscanfacilitateareductioninAustralia’scarbonemissionsby4.9percentoraround27millioncarbontonnesperyearby2015.Thisisequivalenttotheannualemissionscausedbynearlytwo-thirdsofAustralia’spassengercars.

Towards a High-Bandwidth, Low-Carbon Future: Telecommunications-based Opportunities to Reduce Greenhouse Gas Emissionsisastudybyclimatechangeexperts,ClimateRisk.TheReportwaspeerreviewedbyindependentexperts:WWFAustralia’sChiefExecutiveOfficer,GregBourne,andleadingAustralianenergyandenvironmentalauthority,DrHughSaddler.

TheReportidentifiessevenmajoropportunitiesforAustralianconsumersandbusinessesthat,ifimplementedby2015,couldhelpreduceAustralia’sgreenhousegasemissionsbyaround27millioncarbontonnesperyear.Individually,eachopportunitycoulddeliverperannumcarbonemissionsavingsof:

• 1.8milliontonnes(Mt)byusingbroadbandtoremotelymanagepowerforappliancesnotinuseoron‘stand-by’;

• 2.4Mtbyimprovingbusinessproductivitywith“in-person”high-definitionvideoconferencing;

• 2.9Mtwithbroadbandbased,real-timefreightallocationsystemstofillemptyfreightvehicles;

• 3.0Mtwithpresence-detectingservicesthatturnoffdevicesthatare“on”butnotbeingused;

• 3.1Mtwithteleworkingandworkinginregionalcentresbyreducingcommutercartraffic;

• 3.9Mtbybringingintegratedpersonalisedpublictransporttoyourdoorwithaphonecall;and

• 10.1Mtbyincreasingrenewableenergyusewithnetworkeddemand-sidemanagement.

ClimateRisk’sDirectorofScienceandSystems,DrKarlMallon,saidtheintroductionofcarbontradingwouldrequireAustralianbusinessestore-thinktheirapproachtodoingbusiness.

“TheReport’sopportunitiesshouldbepartofeverybusinessandgovernmentclimatechangestrategybecauseitcandeliverbigemissioncutsquicklyandwithminimaleconomicdisruption,”DrMallonsaid.

“ThisReportprovidesthefirstsignificant,practicalanalysisinAustraliaoftheuseoftelecommunicationstoachieveincreasedenergyconservationandcleanenergyproduction.Ouranalysisfoundthatbyharnessingsmarternetworksanddevicesitispossibletodeliverreducedemissionswhilealsoreducingexpenditureonenergyfortheenduser.

“TheresultsindicateTelstracanplayabigpartinthesolutiontoclimatechange.Thescaleofitsnetworks,servicesandcustomer-baseprovidesauniqueplatformtopartnerwithbusinessesandhouseholdstoamakeasignificantcontributiontoreducingthenationalcarbonfootprint.”

AfullcopyoftheReportcanbefoundatwww.telstra.com.au/abouttelstra/csr/reports.cfm

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1. Society matters

Issue Solution Product/Service Travel/Fuel Reduction Additional Information

Conferencing & Collaboration

Remote & Virtual

VideoConferencing TelePresence ✓ Topoftherange/stateoftheartvideoconferencing.

VideoConferencing TelePresence ✓ Enablesvirtualfacetofacemeetingsandsupportslargernumbersofattendees.

VideoConferencing DesktopVideoConferencing ✓ Desktopsolutionforindividualfacetofacemeetingswithhighqualityimages.

VideoConferencing WebEx ✓ Enablesharingofapplicationsandhands-onvisual/verbalcollaboration.

VirtualContactCentre WebContactCentre ✓ SupportsavirtualcontactcentrethatlinksallformsofcommunicationswhilstabletorunonanyconnectabledesktopPCallowingaphysicallydiversestaffingandreducedtravelandalsoofficespaceimpactsforhomeworkers.

RemoteWorkingSolutions iPassGlobalVirtualNetwork ✓ Providessecuremanagedaccesstocorporatebusinessessupportingemployeesworkingremotelyandenablingreducedtravel.

Telemetry RemoteTelemetry RemoteTelemetry ✓ Remotemonitoringandcontrolofmeteringandspecificapplicationdevicesanywhere(andeverywhere)inthecountryenablingreductionintravel.Additionalenvironmentbenefitsdependingonapplicationsuchaswaterreductionswhenusedforwatermanagement.

Vehicle Routing & Management

FieldWorkforceSolutions XoraTrimbleEnterpriseMobilitySystem(EMS)

✓ Variousapplicationsforfieldforcemanagementtostreamlinefieldworkincludingjoballocationandrouteplanning.

Whereis®Navigator WhereisNavigator ✓ Smarttravelplanningmeansefficientroutingtohelppreventunnecessaryfueluse.

Next Generation Infrastructure

TelstraNextIP™network BigPond,Velocity(FTTP) ✓ TheTelstraNextIP™networkisoneofthelargest,fullyintegratednationalIPnetworksintheworld.

NextG™network FlexiblePersonalisedTransportSolutions ✓ LeadingedgewirelessnetworkthatunderpinsnotonlyTelstra’sbutanextensiverangeofthirdpartyproductsandservices.

Telstra’sproductsandservices–fuelreductionsolutions

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Internet safety and securityWirelesscommunicationischangingthewaywework,liveandrelatetoeachotherinthe21stcentury.In2007,eachAustralianhouseholdhad,onaverage,morethanthreemobilephones–upfromoneperhouseholdin1995;andin2007,nineintenfamilieshadaninternetconnectionwith75percentbeingbroadband–upfromsevenpercentin1995.Communicationstoolslikethesearebringingfamilyandfriendscloserbyallowingthemtostayconnectedwhenphysicallyseparated.

However,withaccesstohigherbandwidthinternetconnectionsandnewtechnologies,thewaypeoplebehaveonlinehaschanged.Therateofgrowthintheuseofsocialnetworkingservicesanduser-generatedcontenthasincreasedmarkedlyinAustraliaandinternationally.Therehasbeenashiftfromtheconsumptionofcontenttointeractionwithcontent,andinformationhasneverbeenmoreintegratedoraccessiblein‘realtime’.

Whilethesechangeshaveincreasedourabilitytoconnectwitheachother,drivenadvancesinproductivityandenhancedinnovation,theyhaveacceleratedashiftintheriskstointernetusers.Theseonlineriskscanbecategorisedintothreekeyareas2:

1. content–theriskofexposuretointernetcontentthatisillegalorconsideredtobeinappropriateforchildren.

2. communication–risksarisefrominterpersonalcommunicationsontheinternet,suchascontactwithchildrenbysexualpredatorsandcyberbullying.

3. e-securityrisks–associatedwithavarietyofinternetactivitiesincludingthereleaseofpersonalinformationtopublicforumsandconnectingahomecomputertotheinternetwithoutprotection,whichmayresultinviruses,onlinefraud,spamandidentitytheft.Onanationalscale,e-securityrisksmayincludecyberattackonAustralia’scriticalinfrastructure.

In2007/08TelstraestablishedaninternalWorkingGrouponInternetTrust&Security.Wealsoworkwithindustry,government,communityorganisationsandinternetuserstoaddresstherangeofevolvingonlinerisksandtodevelopmeasuresthatpromoteonlinesafety.AtTelstrawetakeourresponsibilityasatrustedinternetservicesproviderandintegratedtelecommunicationscompanyseriously.

CybersafetyforkidsIn2007/08theTelstraFoundationmadeathreeyearcommitmenttoputtinga‘spotlight’oncybersafety.Anew$3millioncommunitygrantsprogramwasestablishedtohelpdevelopprotectivemeasurestokeepAustralianchildrensafewhileusingtheinternetandmobilephones.Throughthespotlightoncybersafetyprogram,theTelstraFoundationsupportsprogramsthathelpchildrenandyoungpeopledeveloptheskillstheyneedtoenjoytheuseofinformationandcommunicationtechnologiesinsafe,supportedenvironments,andprogramsthateducateparentstobecomemorecompetentinaddressingcybersafetyissues.

Nationale-SecurityAwarenessWeekInJune2008,TelstrasupportedNationale-SecurityAwarenessWeek,aFederalGovernmentinitiativethataimstohelpAustraliansunderstande-securityrisksandeducatecomputerusersaboutthestepstheycantaketoprotectthemselves,familiesandbusinessesonline.Telstra’sCorporateSecurity&InvestigationsledourinvolvementtogetherwithrepresentativesfromSensisandTradingPost.

AspartoftheweekinJune2008,Telstra’sconsumermarketingteamandBigPondheldaseriesoffreeseminarsatTelstra’sT[life]™storeinSydney.Theseminarsdemonstratedhoweveryparentcanhelpbuildasafeonlineenvironmentfortheirchildren.Oneoftheworld’sleadingexpertsine-learningandanadvocateforchildcybersafety,DrMartynWild,sharedsomesimplestepsthatparentscantaketomaketheinternetasafeplacefortheirfamily.Abookletforparents,Helpkeepyourkidssafeonline,wasproducedaspartofthisinitiative.

Thebooklet,alongwithsomesimpletipsoncybersafety,canalsobefoundbyvisitingtheBigPondwebsiteathttp://my.bigpond.com/help/security

CyberSafetyConsultativeWorkingGroupTelstra’sCorporateSecurity&InvestigationsUnitrepresentsthecompanyontheCyberSafetyConsultativeWorkingGroup.AkeyinitiativeoftheFederalGovernment’scybersafetyplan,theworkinggrouphasrepresentationfromcommunitygroups,internetserviceproviders,industryassociations,businessandgovernment.ItisexpectedtoprovideadvicetotheGovernmentonprioritiesandmeasuresrequiredbylegislatorsandindustrytoensureworld’sbestpracticesafeguardsforchildrenonline.

AustralasianConsumerFraudTaskforceTheAustralasianConsumerFraudTaskforce,madeupofanumberofstateandfederalgovernmentbodiesfromAustraliaandNewZealand,launchedaSCAMwatchFraudFortnightawarenesscampaigndrivenbytheAustralianCompetitionandConsumerCommission.Thecampaignwasdesignedtoeducateconsumersonhowtheycanbetterprotectthemselvesfromscams.

AsanindustrypartnertotheTaskforce,wehelppromotethecampaigneachyear.Thisyear,byusingTelstra’svariedcommunicationchannels,theTaskforce’smessagesweredeliveredtoover2.7millionBigPondcustomers,550,000TradingPostusersand40,000employees.

VirtualGlobalTaskforceTheVirtualGlobalTaskforce(VGT)iscomprisedofgloballawenforcementagenciesworkingtogethertofightonlinechildabuse.Itsobjectivesaretomaketheinternetasaferplace,toidentify,locateandhelpchildrenatrisk,andtoholdperpetratorsappropriatelyaccountable.

1. Society matters

2Developments in Internet Filtering Technologies and other Measures for Promoting Online Safety,p.12,AustralianCommunicationsandMediaAuthority,2008

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BigPondisanoriginalcorporateindustrypartneroftheVGTsinceitsinceptionthreeyearsagoandwasthefirstAustralianinternetserviceprovidertoacknowledgeitsvalue.AsanindustrypartneroftheVGT,Telstrademonstratesitscommitmenttocommunitysafetyandcrimereduction,andhelpstoreducethethreattochildrenonline.TelstraattendedthethirdInternationalVGTconferenceinCanadainFebruary2008,whichfocusedonbuildingawarenessandunderstandingofthechallengesfacedwhenfightingaborderless,crossjurisdictionalcrime.Theconferencerecognisedthatnosingleagency,organisationorcompanyalonecanwinthefightofprotectingourmostvitalresource–ourchildren.

TechnologyandWellbeingRoundtableTheTelstraFoundation,incollaborationwithInspireFoundation,establishedaTechnologyandWellbeingRoundtable,aforumthatbringstogetherasmallgroupofindustryleadersfromallsectorsofthecommunity,toexploreopportunitiestoworkcollaborativelyandreducetherisksassociatedwithtechnology.Establishedin2008,thegroupaimstodevelopinnovativeinitiativesthatharnessthepoweroftheinternetandrelatedtechnologytoimprovewellbeing.SomeoftheroundtableparticipantsaretheNSWCommissionforChildrenandYoungPeople,theAlannahandMadelineFoundation,NAPCAN,MicrosoftandMySpace.

CyberStormIITelstracontinuedtoworkcloselywithgovernmentandindustrytoensurethecountryisreadyforandresilienttopossibleattacksonitsnetworkandconstantlyinvestsinnewtechnologytoprotectitscustomers.Today’ssecuritychallengesreinforcethebenefitofTelstra’sparticipationinaninternationalsimulatedcyberexercisecalledCyberStormII,whichtookplaceinMarch2008.

CyberStormIIwaspartoftheUnitedStates’DepartmentofHomelandSecurity’songoingefforttoreducecyberattacksandenhancegovernmentandprivatesectorabilitiestocommunicateandcooperateinresponsetoacyberincident.

Australia,alongwithCanada,theUnitedStates,NewZealandandtheUnitedKingdom,participatedintheexercise.Over50Australianorganisations,includingcriticalinfrastructuresectors,tookpartintheexercisedesignedtotesthowwellcriticalcross-sectorandinter-governmentalcybersecurityprocessesoperateandhowstakeholdersrespond.Asakeymediacommunicationscompany,Telstrawasintegraltotheexercise.

Telstra’sinvolvementinthiscollaborativeindustryandgovernmentexerciseprovidedtheopportunitytosimulateresponsestoalargescalecyberattack,applykeylearningstocurrentpracticesanddevelopimportantnetworkswithlawenforcement,governmentsandpeerorganisations.

CyberStormIIreinforcedtheneedforTelstra’senterpriseandgovernmentcustomerstoproactivelyprotectthemselvesagainstcybercrime.Telstraofferedinformationandbriefingsonasophisticatednewsecuritysystem,DistributedDenialofServiceProtection.Thisprotectionserviceinterceptsanattackintheonlinenetworkandredirectstheoffendingtraffictopreventthecustomer’sinternetgatewayfromshuttingdown.Thenetwork-based,managedsecuritysolutionisaneasyandscalablewaytoprotectcustomernetworksfromDistributedDenialofServiceandotheronlinesecuritybreaches.

Electromagnetic energyTelstraacknowledgesthereissomecommunityconcernthatexposuretolowlevelsofelectromagneticenergy(EME)fromourtelecommunicationsbasestationsandmobiletelephonehandsetscouldleadtoadversehealtheffects.

TelecommunicationsfacilitiesemitradiofrequencyEMEas“radiowaves”orradiosignals.OtherradiowavesignalstransmittedbycommunicationsfacilitiesincludeTVsignals,AMandFMradiosignals,taxiservicesignals,pagingnetworksignals,emergencyservicecommunications,andpolicetwo-wayradio.

TelstrareliesontheexpertadviceofnationalandinternationalhealthauthoritiessuchastheAustralianRadiationProtectionandNuclearSafetyAgency–anagencyoftheCommonwealthDepartmentofHealthandAgeing,andtheWorldHealthOrganisation(WHO)foroverallassessmentsofhealthandsafetyimpacts.

TheWHOreportsthatfromalltheevidenceaccumulatedsofar,“noadverseshortorlongtermhealtheffectshavebeenshowntooccurfromtheradiofrequencysignalsproducedbybasestations.”

Onmobilephones,theWHOreportsthat“theoverallevidenceavailabletodatedoesnotsuggestthattheuseofmobilephoneshasanydetrimentaleffectonhumanhealth.”

Moreinformationisavailableatwww.who.int/peh-emf/about/WhatisEMF/en/index3.html

During2007/08,Telstracompleted1,131mobileinfrastructureprojectswhichincluded129newdevelopmentapplicationsand425AustralianCommunicationIndustryForumconsultationproposals.TheAustralianCommunicationsandMediaAuthority(ACMA)confirmedthattheyreceivedfivecomplaintsregardingTelstraproposalsthisfinancialyear.

Eachyear,TelstrapublishesinformationontheRadioFrequencyNationalSiteArchiveaspartofourtransparentapproachtoEMEandtelecommunication.Thisyearthisincluded:

• EnvironmentalEMEReports:7,057updatesto4,130distinctsites;

• EMEComplianceCertificates:1,426updatesto1,260distinctsites;and

• RadioCommunicationsSiteManagementBooks:1,719updatesto1,451distinctsites.

1. Society matters

In2007/08,wepresentedatsixleadinginternationalEMEconferencesandworkshops,includingtheBioelectromagneticsSocietyAnnualMeetinginSanDiego,andprovidedsponsorshipfortheAustralianCentreforRadiofrequencyBioeffectsResearchScienceWeek2007.TheaimoftheScienceWeekistoimprovethepublic’sunderstandingofradiocommunicationstechnology.

EMEresearchTelstraemploysthreefull-timeresearchprofessionalsintheChiefTechnologyOfficetooverseeandsupportourengagementinexternalEMEresearch.ThisresearchisconductedprimarilyincollaborationwiththeAustralianCentreforRadiofrequencyBioeffectsResearch.

In2007/08,researchprojectsundertakenwiththeCentreincludedhuman,animalandisolatedcellculturestudiesonpotentialhealtheffects;dosimetrystudiesformorerobustexposurestandardsdevelopment;andextensivereviewingofthescientificliteraturetoprovidethemostup-to-dateknowledgeoftheglobalresearcheffortandthelatestconclusionsonpotentialhealthimpactsfromexposuretoEME.

Alsoin2007/08,incollaborationwithSwinburneUniversityofTechnology,Telstraopenedanew$600,000researchfacilityatSwinburne’sHawthorncampusinMelbourne,toundertakespecialisedradiofrequencydosimetryresearchandtosupporttheresearcheffortsoftheothercollaboratorsoftheAustralianCentreforRadiofrequencyBioeffectsResearch.Telstracontributed$300,000andlabequipmenttothenewfacility.

SuperClubsPLUS AustraliaCase studyAprotectedandsafeonlinelearningcommunityforyoungAustraliansisnowarealitythankstotheeffortsofIntuitiveMediaAustralia,LaTrobeUniversityandtheTelstraFoundation.

Theactiveeducationprogram,SuperClubsPLUSAustralia,equipschildrenwiththeskills,confidenceandaptitudetoeffectivelyandsafelyengageontheinternet.

Providinganonlinevoiceforsixto12yearolds,SuperClubsPLUSAustraliaisalocalisedversionofaninitiativeofIntuitiveMediaUK.ItincludesAustralianmediatorsprotectingandencouragingchildrenin‘realtime’,andlocalcontent,partnersandcurriculummappingacrossalleducationjurisdictions.

SuperClubsPLUSallowsyoungpeopletosafelyexploretheiridentity,andreachouttosignificantadults,suchaschildren’sauthors,guestpoliticians,andjournalists,aswellaseachother,through‘SuperHot-Seats’.‘SuperClubbers’cantalktolocalandglobalaudiences,butareprotectedbyasophisticatedmixofsoftwaretools,intelligentsystemsandreal-timemediators.ItisasaferalternativetotheonlinecommunitiesfoundinMySpace,YouTubeandBebo.

UsingSuperClubsPLUShelpsyoungpeopledevelopanadvancedunderstandingofonlinetoolsandtechnologies,andanopportunitytousetheminpurposefulactivities.

Inaddition,SuperClubsPLUSAustraliaprovidesanonlinespaceforchildrenandteacherstolearninadifferentenvironment.Informationandcommunicationtechnologieslearningsfromeachofthestates’educationcurricularforthisagegroupwillbemappedtoprogramsinSuperClubsPLUS.

Withover6,000kidssignedupinjustthefirsttwomonthsofSuperClubsPLUSgoinglive,theaimistohave40,000childrenregisteredinthefirsttwoyearsoftheprogram.

SpringGullyPrimarySchoolteacher,NarissaLeung,believesthatSuperClubsPLUSAustraliateachesstudentsmorethanjustcomputerskills.

“Itprovidesstudentswithamoralcompassforsafeinternetuseandanauthenticpurposeforbothreadingandwriting,”MsLeungsaid.

TheTelstraFoundation,throughtheCommunityDevelopmentFund’sCyberSafetyprogram,issupportingSuperClubsPLUSAustraliawithagrantof$1millionovertwoyears.

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CommunityengagementKeytoTelstra’ssiteselectionprocessistheneedtostrikeabalancebetweenprovidingreliableservicesandminimisingimpactonthecommunityandthelocalenvironment.Telstraendeavourstolocatefacilitiesinindustrialandcommercialareaswhereverpossibleinordertominimisedisturbancestolocalcommunities.

AdedicatedteamatTelstraactivelyreviewsnewsiteproposalsanddevelopssuitablecommunityconsultationplans.Thelevelofconsultationvariesdependingonthetypeoffacilityproposed(newsiteorupgradeofanexistingsite),localgovernmentpolicyandadvice,andimportantlythelocalareaandcommunity.

Telstrainvitesnearbycommunitiesandlocalgovernmenttoactivelyparticipateintheconsultationprocess,andprovidesarangeofavenuesforengagementincludingwrittennotificationtoresidents,advertisementsinlocalpapers,noticesattheproposedsite,local“drop-in”sessionsataneighbourhoodhouse,specialcouncilbriefings,telephonehotlines,housetohousevisitsandone-on-oneinformationsessions.

TelstraprovidescomprehensiveinformationaboutEMEandhealth,includingresearchandfactsheets,atwww.telstra.com.au/ememanagement

Socio-economic contributionAsthetelecommunicationsnervecentreofAustralia,Telstraprovidesthenationwithafoundationforeconomicgrowth,productivityimprovement,sustainableprosperityandglobalcompetitiveadvantage.Asabusinessenterprise,wehavearesponsibilitytoourshareholdersandtothenationtocontinuallyimprovethefinancialperformanceofourcompanyanditsbusinesses.Bydoingthisinaresponsibleway,wefosterprosperityintheindustriesandcommunitiesinwhichweparticipate.

Economic impactIndesigning,developingandimplementingcommunicationssolutionsforourcustomers,Telstrahasasignificantimpactontheeconomythroughemployment,investmentandoursupplychain.Duringthe2007/08financialyear,Telstra’sbusinessactivities:

• supported46,649jobs(totalworkforce);

• paidout$4.2billioninsalariesandwages;

• paidout$3.4billionindividendstoshareholders;

• paid$1.7billioninCommonwealth,stateandlocaltaxes;

• purchasedmorethan$11billioningoodsandservicesfromaround8,000suppliers;and

• invested$4.9billiontocontinuethebuildoutoftheNextG™wirelessbroadbandnetwork;thecontinueddeploymentoftheTelstraNextIP™network;creationofnewandadvancedbusinesssupportandoperatingsupportsystems;andotherinvestmentstotransformthedeliveryoftelecommunicationsservicesinAustralia.

FinancialsummaryYearended30June2008*

2007/08 2003 $M

2004 $M

2005 $M

2007 % change

Salesrevenue 24,657 23,673 984 4.2

EBIT 6,226 5,779 447 7.7

Profitaftertaxandminorityinterests

3,692 3,253 439 13.5

Ordinarydividends(centspershare)

28 28 - -

*IncludesSensis

IndustryawardsInoneofthebiggestend-to-endtransformationseverundertakenbyaglobaltelecommunicationscarrier,Telstraisnowpastthethreeyearmarkinitsfiveyeartransformation.Wearetransformingfroma20thcenturyphonecompanyintoaworldclassmedia-communicationscompany,implementingnextgenerationnetworks,transformingourITsystemsandintroducingmarket-basedmanagementtoimproveourcustomers’experience.Thetransformation,whichissupportedbyglobalstrategicpartnerssuchasAccenture,IBM,Ericsson,andAlcatel-Lucent,isproducingworld-leadingresults.In2007/08,Telstra’sachievementshavebeenrecognisedbyanumberofkeyindustryawards,including:

• 2008TelecomAsiaAwards–‘BestAsianTelecomCarrier’and‘BestMobileCarrier’;

• 2007AustralianTelecomAwards–‘TelecommunicationsCompanyoftheYear’,‘CEOoftheYear’,‘BestInternetServiceProvider’,and‘MobileCarrieroftheYear’;

• GlobalTelecomsBusinessMagazine’s2007‘InnovationAward’forITTransformation;

• AustralianCommunicationsAllianceAwards–‘InnovationMobilityAward’fortheTelstraNextG™network;

• NationalMobileMediaAwards–‘BestMobileEntertainment’;and‘BestofShow’forWotnext;

• InternationalEngineeringConsortium,BroadbandWorldForum–InfoVisionAwardforBigPondWirelessBroadband;and

• EngineersAustraliaExcellenceAward,SydneyChapterofEngineersAustralia–AwardforControlSystems,NetworkInfrastructureandTelecommunications–TelstraNextG™network.

ThecompletelistofTelstrahonourscanbefoundatwww.telstra.com.au/abouttelstra/corp/awards.cfm

1. Society matters

“Inthepast,theMobileUnithasbeenunabletoevenconnecttoatelephoneline.

“This,coupledwiththemanyandvariedlocationstheMobileUnitvisits,andthechallengeofthesizeandcomplexityofthex-rayimages–about10megabytespersinglex-ray–hasrequiredcreativesolutions.”

BreastScreenTasmaniaisoneoftheincreasingnumberoforganisationsusingtheNextG™networktoincreaseefficienciesanddriveimprovedproductivity.

Productivity and innovationTelstra’svisionisforaNationalBroadbandNetworkforallAustralians,toenableaturbo-chargingofhealth,education,environmentalconservationanddevelopment,commerce,innovationandsocialinclusion.WearealreadydeliveringAustralia’slargestandfastestnationalmobilebroadbandnetwork.

OurnetworksexplainedTheNextG™networkisAustralia’slargestandfastestnationalmobilebroadbandnetwork.Telstra’sNextG™networkoffersthebestcombinedbreadthanddepthofthirdgenerationmobilecoverageinAustralia,coveringmorethantwomillionsquarekilometres–morethanthreetimesthesizeofFrance.TheNextG™(850MHz)networkprovides3Gservicesandwirelessbroadbandaccessto99percentoftheAustralianpopulation,spanningcitytocountryincludingmanyremotecoastalandruralcommunities,andistheworld’sfirstnationalnetworktoofferupto200kilometrecellrange.SomeadvantagesoftheNextG™networkinclude:

• moremobilephoneservices–inadditiontothestandardvoicecallsandtextmessaging,theNextG™networkallowsitsuserstomakeandreceivevideocalls,andenjoybroadbandaccesstotheinternet;

• laptopandPDAaccess–theNextG™networkcanalsobeaccessedusinglaptopsandPDAsviaPCcards;

• fasterdataspeeds–theNextG™networkisuptofivetimesfasterthanother3GSMnetworks,withtypicaluserspeedsaveraging550Kbpsto3Mbps;and

• internationalroaming–theNextG™networkhasoneoftheworld’sbestinternationalroamingfootprints,allowingcustomerstomakevoicecallsinmorethan172countriesandtoaccess3Gservicessuchasvideocallingandhighspeeddatain41countries.

TelstraCountryWideExecutiveDirectorforVic/Tas,GrantWiltshire,TasmanianMinisterforHealth,LaraGiddingsandBreastScreenTasmania’sJennyHuntleydemonstratethedigitalmammographyimagerybeingsenttoHobartinreal-timefordiagnosis.

Breast Screen Tasmania Virtual CareCase studyLaunchedinApril2008,anewtelehealthinitiativepoweredbyTelstra’sNextG™networkisrevolutionisingthewayscreeningmammogramsareprocessedforwomenlivinginruralandregionalTasmania.Significantadvancementsinhealthcareoftencomefromsimplesolutions,andthisonecouldnotbemorestraightforward.

“Thebeautyofthisapplicationisitssimplicity,”saidTelstraCountryWide®ExecutiveDirectorforTasmaniaandVictoria,GrantWiltshire.

“AcombinationofwirelessbroadbandanddigitalmammographyequipmentmeansthatimagespreviouslycourieredinhardformcanbeemailedtotheradiologyreadingfacilityinHobart.”

LaraGiddings,MinisterforHealthandHumanServices,saidthattheinitiativehadreducedthetimetakenforindividualmammogramfilestobetransferredfromthemobilescreeningunittotheHobartreadingfacilityfromasmuchasfivedays,tojustfourminutes.

“Untilnow,lackofmobilebroadbandcommunicationshasmeanttime-consumingmanualprocessesfordeliveringclientfilesandmammogramstoandfromtheMobileUnit,”Larasaid.

“FilesandappointmentscheduleshavebeenpackedinsuitcasesanddeliveredbycouriertotheMobileUnitwhereverithasbeenlocatedaroundTasmania–aprocesstakinguptofivedaysdependingonthelocation.

“ReturningthefilesandscreeningmammogramstoHobartforreadingandarchivinghasbeensimilarlyinefficient.

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Inaddition,TelstrahasdeliveredtheTelstraNextIP™networkwhich,coupledwiththeNextG™network,isoneofthelargestfullyintegratednation-wideIPnetworksintheworld.TheTelstraNextIP™networkissecure,morescaleable,morereliableandsimplertoaccessthananyothernetworkinAustralia.

OurADSLbroadbandnetworkcovers92percentofthepopulationandourADSL2+servicesareenabledinmorethan1,400exchangesallowingcustomerstoaccessspeedsupto20Mbps.

ChangingthewayweliveandworkThesenetworksarealreadyhavingaprofoundsocialandeconomicimpact–changingthewaypeoplelivetheirlives,changingbusinesses,andincreasingAustralia’sabilitytocompeteglobally.Theyunderpinsignificantchangesfrominformationthatiscompartmentalised,fragmentedbyproviderandhardtoaccess,toinformationthatisintegrated,user-generatedandaccessibleinreal-time.

Onapersonallevel,peopleareusingTelstra’sNextG™networktomakelivevideocalls,especiallyforspecialoccasionssuchasChristmas,birthdays,weddingsandchristenings,strengtheningkinshiptiesandallowingpeoplewhocan’ttraveltostayintouchwiththoseclosetothem.

Onabroaderlevel,ournetworksareusedtoimproveemergencyservices,addresscriticalresourceshortagesinhealthandeducation,andtoimproveefficiencyandproductivityinindustry.

HealthcareWithanageingpopulationandshortfallsofdoctorsandnursesinruralandregionalareas,Australia’shealthsystemisunderpressure.Telecommunicationsnetworkscanunderpinaseriesofpositivechangesinthepatient,medicalprofessionalandhealthadministrationexperience.

Usingournetworks,itisnowpossibleforanambulancetoarrivemorequicklybyusingourlocationtechnologytopinpointthesceneandthenearestambulance;apatient’srecordstobemadeavailableinstantaneouslybythespeed,reliabilityandrobustnessofourTelstraNextIP™network;andthebestprofessionalstobealertedimmediatelyfordiagnosisandrecommendationbyusingourwirelessbroadbandNextG™networktorecordandtransmitthepatient’sconditionviavideo.

CommunitynursesareusingNextG™toremotelyaccessclientrecordsandupdatefiles,eliminatingtheneedtogobacktobase.Theyalsotakeandsendpicturesandvideosofwoundstoreceivedressingadviceoverthephone,savingtimeandresources,anddeliveringmoreimmediateandappropriatecare.

Healthprofessionals,suchasdentists,speechtherapists,obstetricians,cardiologists,pathologists,paediatriciansandphysiciansareusingtheNextG™networktoviewelectronicpatientrecords,makeprescriptions,accesspharmaceuticaldataandconductmobilevideoconsultations.

Thissavestraveltime,reducesthedelayfordiagnosisand,mostimportantly,givespatientstimelyadviceaboutimprovingtheirhealthandwellbeinginlocationswherespecialistattentionpreviouslymaynothavebeenavailable.

Virtualreal-timecriticalcarebridgesdistanceandgivesaccesstospecialistsassistinginthestabilisationofthepatient,reducingtheneedtotransferpatientsfromregionaltobig-cityhospitals.

BusinessADecember2007studyof26businessesin15industriesusingTelstra’sNextG™wirelessbroadbandnetworkfoundonaveragea9.3percentincreaseinproductivityafterusingNextG™foranaverageofsevenandahalfmonths.

Productivitygainsamongusersinterviewedvariedfrom1.1percentto27.3percent.

31percentofthosesurveyedwereinruralorremoteareas.It’sintheseareaswherethehighestproductivitygainswereseen.

Theproductivitydriversincludedreducedtravelandexpenses;betteruseoftimewhileoffsiteortravelling;accesstomoreinformationremotely;andreducedstafftimesupportinginformationrequestsfromoffsiteworkers.

Businessesacrossallsectorsareusingournetworkstosaveontraveltimeandfuelexpensestoimproveproductivity.Forexample,cattlefarmersareusingNextG™toremotelymonitorwaterlevels,gatesandfences,andremotelycontrolwaterpumps,notonlysavingtimeandfuel,butreducingmaintenanceandimprovinglivestocklongevity.

ThestudywaspreparedforTelstrabyEnotechPtyLtd.

1. Society matters

Ournetworksarealreadyhavingaprofoundsocialandeconomicimpact

“IcannowusealaptoptodoajobonthetopofUluruorinWadeye,andit’snotonlygeneraladministrativeworkthatwecannowdo”,Charlessaid.

“Wecanalsoaccessallourrecordssothatwecancheckthedetailsweneedtosayyestoaloanorabusinessdealrightthereandthen.

“Nowthatstaffmembersdon’thavetotraveltowheretheypreviouslyneededtoforinternetaccess,andweareabletoaccessournetworkinmanyplacesacrossAustralia,IbelievethatmovingtotheNextG™networkhasimprovedourefficiencybyupto30percent.”

EducationAccesstohigh-speedbroadbandissettotransformthewaywelearninaneweraofanywhere,anytimelearningondigitaldevicesandinvirtualclassrooms.Intheeraofhigh-speedbroadband,learningwillbeaccessibleacrossanydigitaldevice,whichmeanslearningcontentwillbeavailableonPDAsorsmartphoneswhenit’smostneededormostconvenient.

Withfastnetworkspeeds,studentshavefasterandeasieraccesstocontentintheirpreferredformats–whetherthatisvideo,simulatororgaming.Peoplewillbeabletoupload,co-createandcommentonlearningcontentaseasilyandquicklyastheycanaccessit,andsharedlearningwillalsobeenhanced.

EducatorsarecurrentlyusingNextG™TelstraTurboCardsinlaptopstostreamlivevideoofenvironmentalprojectstoschoolsaroundthecountry,givingschoolstudentsaricherlearningprogram.Importantly,studentscanbeconnectedwithlivelearningnomattertheirlocation.

CharlesRoberts,IndigenousBusinessAustralia.

Indigenous business organisation more efficient Case studyWithmorethan200staffworkinginremotelocationsaroundAustralia,IndigenousBusinessAustralia(IBA)reliesonTelstra’sNextG™networktokeepincontact.

IBAisaFederalGovernmentorganisationbasedinCanberrawhichnegotiateshomeandbusinessfinancingwithIndigenouscommunities.

HavingswitchedtotheTelstraNextG™network,IBAstaffcannowmakemobilephonecallsfromplacesasremoteasWadeye,westofDarwin,andlogontotheircentraldatabase.

AccordingtoIBA’sInformationTechnologyandTelecomsManager,CharlesRoberts,thenewarrangementshavemadetheorganisationbetween25and30percentmoreefficient.

IBArepresentativesconductmuchoftheirworkinremoteIndigenouscommunitieswheretheymeetwithindividualsandorganisationstosetupfundingforhomeorbusinessloans.

WorkingmainlyinQueensland,theNorthernTerritoryandWesternAustralia,staffmemberstraditionallyhadtocopewithslowandunreliablephoneandinternetaccessinbiggertowns,andnointernetaccessatallinremoteareas.

PriortoswitchingtotheNextG™network,manystaffmembershadtorelyonsatellitephonestosetupappointmentsorcheckinwithcolleaguesatotherlocations.

ComputeraccesstoIBA’sdatabasewaslimited,andstaffhadtotravelhundredsofkilometrestoandfromareastogetaccess.

TheIBAnowhas115NextG™mobilehandsetsand71NextG™TurboCardsprovidingstaffwithaccesstoofficeserversandsystems,email,andfastbroadbandwhileoutoftheoffice.

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Influencing corporate responsibility outcomesAcompanyaslargeasTelstrahastheopportunitytoinfluencethecorporateresponsibilitybehavioursandoutcomesofthosestakeholderswithwhomweengage.

SuppliersIn2007/08,Telstrapurchasedapproximately$11billioningoodsandservicesfromaround8,000suppliers.ThenumberofsuppliersinvolvedandthesizeofspendputsTelstrainastrongpositiontoinfluencetheenvironmentalandsocialstandardsofoursuppliers.Werecognisethatoursuppliershavethepotentialtomakesignificant,positivecontributionstothecommunitiesinwhichtheyoperateandtodirectlyimpactTelstra’sowncorporateresponsibilityperformance.

OursupplychainTelstrahasmorethan800major(over$75kspend)activecontractsinplacewithadiverserangeofsuppliersforarangeofproductsandservices.Themaincategoriesofspendinclude:networkequipment,includingexchanges,pits,pipesandconstructionservices;customerequipment,suchasmobilehandsetsandtelephones;strategicmarketingincludingadvertising,media,sponsorship,brandandmarketingservices;officeproducts;motorvehiclesandmechanicalaids;IThardwareandsoftware;directorypaper;andlabour,includingagency,ITandconsultancy.

SupplychaintransformationAspartofTelstra’stransformation,oursupplychainisbeingreformed.We’removingfromacostlyscenariooftoomanysuppliers,systemsandstandardstoasinglewaytoprocure,asinglewaytoconnectwithsuppliers,andasinglecompany-wideviewofourvendoractivity.Thebenefitsinclude:costeffectiveness;greatervisibilityoftheend-to-endsupplychain;processimprovementsthroughtheautomation,

standardisationandtheintegrationofourprocessesresultingingreaterefficiencyandsimplification.GreatervendorvisibilityalsomeansTelstraisabletobettermonitorandenforcenetworkcomplianceandtocontinuetoensureahighstandardofconductfromoursuppliers.

Telstrahassignedaseven-yearcontractwithIBMtoprovideanumberofsupplychainservicesincludingcontractmanagementandreportingsystems,andtooperateanintegratedsupplychainforinternalspendonproductsandservices.IBMiscommittedtoupholdinghighstandardsofethical,socialandenvironmentalconductinitssupplychainandhasimplementedaglobalSupplyChainSocialResponsibilityprogramworldwideacrosstheirnetworkofsuppliers.IBMwillcontinuetoworkwithTelstratoidentifypossibleprocessimprovementsinthesupplychain.

SupplierevaluationprocessTelstra’sBusinessPrinciplesprovideaframeworktoensurethatweoperateethicallyandwithintegrityinpurchasinggoodsandservicesandconductingbusinesswithourvendors.SocialandenvironmentalconsiderationsinoursupplierselectionandevaluationprocessesareguidedbyourPurchasingEthicsGuidelinesandEnvironmentalPurchasingGuidelines.

PurchasingEthicsGuidelinesaimtoensurethatinundertakingourpurchasingactivitiesweassesstherelevantimpactswemakeonsocietyandthatwetakeintoaccountourhealthandsafetyresponsibilities,andtheeconomic,environmentalandcommunityimpacts.

TheEnvironmentalPurchasingGuidelinesaimtoensureconsiderationofenvironmentalissuesinthepurchasingofallproductsandservicesbyTelstra.

Thefundamentalelementsofthesepolicies,alongwithourHealth,Safety&Environment(HS&E)framework,havebeenincorporatedintothecompany’sStrategicSourcingandVendorManagementprocesses.

StrategicsourcingOursupplierselectionprocessincludesariskassessmentdesignedtoidentifyenvironmentalandoccupationalhealthandsafetyrisksinparticularandbroadersocialrisksmoregenerally.Dependingontheriskevaluationwemayrequirethatoursuppliershave:

• formalmanagementsystemsandplansthatmanageanyHS&Easpectsandimpactsassociatedwiththeirbusinessandanyproductsorservicessupplied;

• ahistoryofHS&Ecomplianceandgoodperformance;

• evidenceofhowtheymanagetheHS&Eperformanceoftheirsubcontractors;and

• sociallyresponsiblecontractualobligationsspecifictotheproductsorservicestheyaresupplying.

Asaresultofourcrossbusinessriskassessment-basedsourcingprocess,highriskproducts,servicesandvendorsareidentified(eg,clothingmanufacturers,labourservices)andmaybesubjecttogreaterscrutinyincludingvisitingmanufacturingpremisesandseekingevidenceofcompanypolicies.

Forexample,beforeprocuringworkservicesfromanindustrypartner,weinspectthevendor’spremisesandperformarigorousriskassessmentagainstkeyTelstrapoliciesandemploymentconditionsincluding:workenvironment;leaveandbreaks;HS&E;equalemploymentopportunity;bullyingandwhistleblowing;privacy;unions;employeeassistanceprograms;rewardandrecognition,andremuneration.

VendormanagementVendormanagershaveongoingrelationshipswithkeysuppliers.Theymonitorandaddressdelivery,quality,andHS&Eissues.ThecontractwithavendorrequirescompliancewithTelstra’sHS&Estandards,andapartfromtheinformationcapturedduringthesourcingprocess,contractswithspecifichighrisksupplierscontainconditionscoveringongoingreportingobligations.

1. Society matters

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PropertyvendorsarealsocontractedtoidentifyenvironmentalimprovementopportunitiesaswellastosupportandcollectdatatoassistuswithmeetingtheobjectivesoftheGreenhouseChallengeandNationalPackagingCovenant.

AwardsTelstrahelpstobuildsocialinclusionandencouragesenvironmentalstewardshipbysupportingandrecognisingthoseindividualsandorganisationsthataremakingadifference.

WehavesponsoredtheNationalAboriginal&TorresStraitIslanderArtAwardsince1992,recognisingtheachievementsofIndigenousartists.TheAwardisanimportantshowcaseforbothestablishedandemergingartistsandhascometoberegardedasthepremiernationaleventintheAustralianIndigenousartcalendar.

The2007winnerwasDennisNona,whoseartwork,Ubirikubiri,wonthecoveted$40,000prize.WidelyacknowledgedasoneofthemostimportantTorresStraitIslanderartistsofhisgeneration,Nona’sworkwaschosenfromover300entriessubmittedintheaward.

TelstrahasbeenamajorsponsoroftheBanksiaEnvironmentalAwardssince1993andin2007/08wecelebrated14yearsofpartnership.TheAwardsacknowledgeexcellence,dedicationandleadershipinareasthatcontributetotheenvironmentandasustainablefuture.ThroughtheawardsprogramtheBanksiaEnvironmentalFoundationaimstoraisetheprofileofthecurrentenvironmentalissuesfacingAustraliaandrecognisethosewhoseinitiativesareanencouragementandanexampleforotherstofollow.In2007,TelstrasponsoredtheinauguralenvironmentalPeople’sChoiceAward,whichwaswonbyTheFallsFestival–TheGreenestFestivalinAustralia.

TheTelstraBusinessWomen’sAwardshavebecomeanintegralpartoftheAustralianbusinesscalendar.Theawardsareashowcaseofsuccessfulwomenandprovideapowerfulplatformtohelpredresstheongoingunder-representationofwomeninmanagementranks.Telstrahasproudlysponsoredtheseawardssince1995,celebratingtheachievementsofadiversegroupoftopAustralianbusinesswomenandpromotingthevaluablecontributionwomenmaketothebusinesssectorandthewidercommunity.

The2007TelstraAustralianBusinessWomanoftheYearwasLeannePreston.Herinnovativecompany,WildChild,isnowaninternationallysuccessfulbusiness.

In2008TelstrasponsoredtheTelstraEnvironmentAwards,throughwhichNetworkTenrecognisesandrewardstheindividualsandcommunitiesthatareworkingatalocalleveltoprotecttheenvironment,reducegreenhouseemissionsandensureasustainablefuture.Theawardsareopentoschools,individuals,communitygroupsandsmallbusinessesacrossAustralia.Therearemonthlyprizesof$2,000ineachstateandanannualprizeof$5,000forthemostsignificantcommunityenvironmentprojectineachstate.

Planned actions for 2008/09• Improvetherelevance,transparencyandaccessibility

ofTelstra’scorporateresponsibilityinformationonTelstra’swebsite.

• ConductareviewofTelstra’shumanrightspositionandpracticestoassessperformanceagainstinternationalstandards.

• IntroducefeaturesectionsonnowwearetalkingtoprovideaplatformforpublicdiscussionanddebateabouttheenvironmentandtheNationalBroadbandNetwork.

• Reducepaperconsumptionbycontinuingtotransformoursupplychainoperationstoeffective,electronicbusiness,includingonlinedraftingandexecutionofcontractdocumentation.

1. Society matters

HollyKramer,GMDTelstraProductManagementandTelstraBusinessWomen’sAwardsambassador,MargotSpalding,2006TelstraAustralianBusinessWomanoftheYear,LeannePreston,winner2007TelstraAustralianBusinessWomanoftheYearAwardwithSolTrujillo,TelstraCEO.

2Communities

matter

Telstra is actively involved in the communities in which we operate.Geoff Booth, Group Managing Director, Telstra Country Wide

AsAustralia’sleadingtelecommunicationsproviderandoneofitslargestcompanies,weknowthepositiveimpactourbusinesscanhaveoncommunitylifeandwellbeing.Withcustomers,employeesandoperationsrightacrossAustralia,TelstratakesanactiveinterestintheissuesfacingallAustralians,fromthecapitalcitiestotheremotestpartsofourcountry.

AstheheadofTelstraCountryWide®,andaDirectoroftheTelstraFoundation,Ihaveakeenanddirectinterestinourcommunityactivities.TelstracontinuallystrivestoimprovethedeliveryoftelecommunicationstohelpbringAustraliansclosertogetherbybreakingdownthetyrannyofdistancecreatedbyoursmallpopulationandlargelandmass.Inaddition,wearealwayslookingforwaystomakeapositivecontributiontoAustralia’ssocialandcommunitywellbeing,whetherit’sthroughourstrategicphilanthropy,communitybusinesspartnerships,localsponsorships,disasterrelieforcommunityengagementinproductandservicedevelopment.

Allbusinesses,especiallylargeenterprisessuchasTelstra,haveanimportantroletoplayinstrengtheningcivilsocietyandsupportingcivicleadership.Wedothisbycontributingourresources–people,money,technology,products,servicesandinformation–tosupportthecommunitiesinwhichweworkandlive,theircivicleaders,andsocietyasawhole.WehavethegreatestimpactbydoingthisinareaswhereTelstrahastheexpertiseandresourcestomakeadifference.

WhenAustraliaishitbydevastatingnaturaldisasters,Telstra’scommunicationstechniciansareamongthefirstonthescenetoassistemergencyandessentialserviceorganisationswiththeircontingencycommunicationneedsandtorestore

telecommunicationsservicestoourcustomers.Ourphilanthropicandcommunitybusinesspartnershipendeavoursuseinformationandcommunicationtechnologiestoenhancesocialinclusionandimprovethehealthandeducationoutcomesforindividuals,familiesandcommunitiesacrossAustralia.Wesharetheknowledgeandexpertiseofouremployeestohelpbuildtheskillsandcapacityoflocalenterprisesandcommunities.

Wearealsocommittedtoaddressingtheneedsofthosemostdisadvantagedinsociety.TheprogramsoftheTelstraFoundation’sCommunityDevelopmentFundaimtoassistchildrenandyoungpeoplewhoaresociallyorgeographicallyisolated,andincludeastrongfocusonimprovingthehealthandeducationoutcomesofAustralia’sIndigenouschildren.

In2008,TelstraparticipatedintheLondonBenchmarkingGroup’sprocessforthesecondyear.LondonBenchmarkingGroupAustralia/NewZealandisabusinessmembershiporganisationthatprovidesaframeworkformemberstomeasureandbenchmarktheircorporatecommunitycontribution.Asanindicationofthelevelofourcommitmentandthebreadthofouractivities,Telstra’s2007/08contributionwasvaluedat$29.2million.

Telstrapromotesitscommunitysupportprogramstoitsemployeesasithelpsdemonstratethatwetakeoursocialresponsibilityseriously,andhelpsengenderprideandloyaltyintheorganisation.TobeinvolvedinandunderstandthecommunitiesinwhichweoperateisgoodforciviclifeandthefutureprosperityofAustralia,whichisultimatelygoodforTelstra.

Disaster reliefEachyearAustraliaishitbydevastatingbushfires,floods,cyclonesandothernaturaldisasters,destroyingthehomesandimpactingthelivelihoodsofmanyAustralians.Whendisasterstrikes,Telstra’sfirstpriorityistoassisttheemergencyandessentialserviceorganisationswiththeirtelecommunicationrequirements.Typically,ourcommunicationstechniciansareamongthefirsttoenterdisasteraffectedareastorestoretelecommunicationsservicestoourcustomersasquicklyaspossible.Telstraalsooffersreliefpackagestoaffectedcustomers.VolunteerandFirstResponseLeaveisavailabletoouremployees,whichenablesthemtovolunteertoprovidecriticalservicesfortheprotectionoflifeandproperty.

TelstraisproudofitslonghistoryofrespondingtocommunitiesaffectedbynaturaldisastersinAustralia,andtonaturalandcivildisastersthatoccuroverseas.Telstra’sDisasterReliefPolicyensuresthetimelyandeffectivedeliveryofsupporttoaffectedcustomersandcommunities.

Overthe2007/08yearTelstraprovidedrelieftocustomersandcommunitiesaffectedbythefollowingnaturaldisasters:

• bushfiresinWillungainSouthAustralia,andinParkervilleandStonevilleinWesternAustralia;

• floodsinthecentralandnorthcoastofNewSouthWales;

• floodsinEmerald,Rockhampton,Mackay,Charleville,GoldCoast,Beenleigh,Jimboomba,Beaudesert,Rathdowney,Boonah,Clifton,Allora,WarwickandKillarneyinQueensland;

• cycloneNargisinMyanmar(Burma);and

• theearthquakeintheSichuanProvinceinChina.

Lending a Helping Hand Case studyWiththeupgradeofnab’sdesktopcomputerfleet,TelstraEnterpriseandGovernment’snabAccountTeaminpartnershipwithnabusedthedecommissionedtechnologytoaddressanimportantneed.

Inamovethathasbothenvironmentalandsocialbenefits,thepartnershipdevelopedtheHelpingHandprojecttomanagethedisposalofthetechnologytosupportdisadvantagedcommunities.

Sincetheproject’sinceptionin2007,over3,400desktopsandalmost300laptopshavebeendonated,aswellasotherequipmentsuchasprinters,routersandswitches.DonationshavegonetolocalorganisationssuchasYooralla,theReachFoundationandtheOpeningtheDoorsFoundation.ThroughtheReachFoundationtheprojectundertakesinternationaldonations,withdevicesgoingtoorphanagesandschoolsinMali,Vietnam,EastTimor,Cambodia,Fiji,PapuaNewGuineaandIndia.

Oneoftheproject’slargestdonationsistotheWiredCommunity@CollingwoodprojectinVictoria,runinconjunctionwithInfoxchangeAustralia.ThisprojectwilldeliverbroadbandandcomputeraccesstoresidentsoftheCollingwoodcommissionflatsandcloseto1,000HelpingHanddesktoppersonalcomputershavebeendonated.

TheHelpingHandprojectaimstodonatearound4,000desktopsand250laptopstocommunitiesandorganisationsin2008/09.AsapartoftheircontributiontoWiredCommunity@CollingwoodTelstravolunteers,inconjunctionwithnab,willtraintheresidentssothattheyhavetheskillsandknowledgeneededtomaximisetheuseoftheircomputer.

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Relief packagesTelstra’sreliefpackagesaredeterminedbythenatureandscaleofthespecificevent,areavailableforthetimeittakesTelstratorestoreservicestotheaffectedcustomersorforaspecifiedperiod,andcanincludesupportacrossacombinationof:

• freecalldiversionfromanaffectedhomephoneservicetoafixedormobileserviceofthecustomer’schoice,regardlessofthecarrier;

• translationofcallcostsfrommobilephoneratestofixedphoneratesforcustomerswhosefixedhomephonesareaffected;

• adedicatedemergencyassistancehotlinetoassistcustomersaffectedbythedisasterwiththeirtelecommunicationsserviceneeds;

• cancellationofafixedphoneand/orBigPondinternetservicewithafreereconnectionwithin12monthsforcustomerswhosehomeshavebeenaffectedbythedisaster;and

• aone-off$50credittoeligibleTelstramobileservicescustomerswhosehomeswereaffectedbythedisasterandwhodidnothaveafixedphone.

Ourassistancecontinuesforupto12monthsforthosewholosetheirhomestothesedisasters.

International responseThesupportweprovidewhendisastersoccurinternationallyisdependantonthelocationandnatureoftheevent.Inmanyinstances,itisnotpossibletousetelecommunicationsafteradisaster,andoftenitisessentialthatservicesbeleftfreeforemergencyresponserequirements.Telstraalsoconsiderseachsituationintermsofwhetherwehaveanoperatingpresenceintheaffectedareaorwhetherwehaveasignificantcustomeroremployeebasewithanassociationwiththearea,orboth.OurassistanceusuallyfocusesontheprovisionoffreecallsforcustomershereinAustraliatomakecontactwithandconfirmthesafetyoffamilyandfriendsintheaffectedareas.

Community business partnershipsThroughourcommunitybusinesspartnershipsTelstraprovidesmuchneededproducts,services,skillsandexpertisetosupporttheworkofnot-for-profit,charityandcommunityorganisations.

Weseektodeveloppartnershipsthatreducetheimpactsofsocialandgeographicisolationorincreasesocialinclusion,withafocusonhealth,employmentandeducation.Communitybusinesspartnershipsdeliverbenefitsnotonlytothepartneredorganisationanditsclients,butalsotoouroverallreputationandlong-termbusinesssuccess.

In2007/08Telstrasupportedthefollowingongoingcommunitybusinesspartnerships:

• onTrac@PeterMac–SupportedbyTelstrasince2004,thisprogramdeliversclinicalservicesandresearchesbest-practicecareforadolescentsandyoungadultswithcancer.TelstraprovidesvideoandvoiceconferencingsolutionsandNextG™wirelessturbocardstoenabledeliveryofsupportandservices.ThisyearthereachoftheprogramwasextendedtoregionalpatientsviaatrialfocusedontheLoddonMalleeareaofVictoria.

• Cavill+CoHeartSmart®NPOToolkit–TelstrahassupportedCavill+Cotodevelopadistanceeducationtoolthatbuildsthecapacityofnot-for-profitorganisationstoformpartnershipswiththecorporatesector.Telstraprovidesvideoconferencingtoenabletheparticipationofnot-for-profitorganisationsthatwouldotherwisebeexcludedbytheirinabilitytotraveltoSydneyorMelbourneforthetutorials.

• CarnegieMellonUniversityscholarships–Telstrarecognisestheimportanceofinvestinginthefutureknowledgebaseofourindustry.OnesuchinvestmentsawTelstrafund15InformationTechnologypost-graduatescholarshipstotheCarnegieMellonUniversity,HeinzSchoolAustraliainAdelaide,representingatotalinvestmentof$1.35millionoverfiveyearscommencingin2008.

Telstra’ssupportofprogramssuchasthisreflectsitscommitmenttoAustralia’sfutureinformationtechnologyskillsandcapabilityandprovidesanexcitingopportunityforpostgraduateITstudentsinAustralia.

• MobileTrackingYoungPeople’sExperiencesProgram–TelstrahasworkedwiththeCentreforAdolescentHealth,MurdochChildrensResearchInstitute,forthreeyearstohelpdevelopandapplyatoolthatusesmobiletechnologytoimprovediagnosisandtreatdepressioninyoungpeople.ThroughoursupplierZTEweprovidemobilephones.Telstrahasalsosetuppre-paidaccountsanddelivertheSMSontheTelstramobilenetworkatnocosttothepatients,toensureno-oneisexcludedfromparticipatinginthetrial.In2008theprogramwasextendedtoincludepatientsandgeneralpractitioners(GPs)fromtheBendigoregion.

Telstra FoundationTheTelstraFoundationdeliversTelstra’scorporatephilanthropyprogramandisthecornerstoneofourcommunityinvestmentstrategy.TheTelstraFoundationidentifiesandprovidesfundingtoprojectsthatreflectitspriorities–backingsocialinnovation,usinginformationandcommunicationtechnologies,buildingthecapacityofcommunityorganisationsandhavingameasurableimpact.Thefocusisonthefuture,whichiswhytheTelstraFoundationsupportsarangeofprojectsthatseektomakeapositiveandlastingdifferencetothelivesofchildrenandyoungpeople.

Operatingtwograntsprograms,theTelstraFoundationCommunityDevelopmentFundandTelstra’sKidsFund,theTelstraFoundationhasfinanciallysupportedover4,400projectstothevalueof$25.6millionsinceitsinceptionin2002.

TheCommunityDevelopmentFundsupportscommunityorganisationstodeliverprojectswithonepurposeinmind–toconnectchildrenandyoungpeopletotheircommunities.Toachievethis,theCommunityDevelopmentFundhasthreefocusareas:

2. Communities matter

• SocialInnovationGrantsunderpintheTelstraFoundation’sfocusontechnologyandsocialconnection;

• IndigenousCommunityDevelopmentsupportsprojectsthatimprovetheeducationalandhealthoutcomesofIndigenouschildrenandyoungpeople;and

• SpotlightonCyberSafetyfocusesonprojectsthathelpkeepchildrensafeonline.

Telstra’sKidsFundisanemployeedirectedgivingprogramthatprovidesgrantsof$1,200tolocalcommunityorganisationsthatinvolvetheparticipationofachildoryoungpersondirectlyrelatedtopermanentTelstraemployees.Telstra’sKidsFundsupportsabroadrangeofinitiativesandprojectsacrosseducation,sportsandrecreation,artsandculture,andtheenvironment.

TheTelstraFoundationaimstoprovideanintegratedrelationshipwithfundedorganisations,drawingonthecorecompetenciesofTelstratoofferadditionalsupportincludingtechnicalexpertise,leadershipandmanagementskillsandkeyresources.

In2007/08,over$3.9millioninfundingwasprovidedthroughtheTelstraFoundationtomorethan667projectstohelpconnectchildrenandyoungpeopletotheircommunities.

Thisincluded:

• $1,000,500inSocialInnovationgrantstosupportsevennewprojects;

• $784,221inCyberSafetygrantstosupportfournewprojects;

• $930,000ingrantstosupport12ongoingIndigenousCommunityDevelopmentprojects;

• $485,500ingrantsto11ongoingcommunitydevelopmentprojects;and

• 631TelstraKidsFundgrantstotalling$749,328madetosupporttheactivitiesofsportingclubs,communitygroupsandschoolsacrossAustralia.

“ThisprojectaimstogivethesestudentsaboostusingacomputerprogramthathashadprovensuccesswithdisadvantagedchildreninCanada.WehopethatwithrigoroustestingandresearchwecanhavethesameoutcomeshereinAustralia.”

OriginallydesignedbyConcordiaUniversityinCanada,Abracadabra!isaproveninteractiveweb-basedsoftwareprogramthatengageschildrenandimprovesbaseliteracyskills–includinglisteningandreadingcomprehension,letter-soundknowledgeandphonologicalblending.

TheresearchteamispilotingthesoftwareduringthefirsttwoyearsandwillmakethenecessaryadjustmentstoensureitissuitableforearlylearnersintheNT,includingIndigenousstudents.Theteamwillimplement,evaluate,refine,test,andconductsmall-scaleexperimentsinanumberofschools,graduallyscalingtheprojectupoverthreeyearsastheprogramdemonstratesitseffectiveness.

“ThegeneroussupportoftheTelstraFoundationhasbeenpivotalingettingthisprojectofftheground,”Tesssaid.

Abracadabra! The Telstra Foundation is helping NT kids readCase studyThankstotheTelstraFoundation,IndigenouschildrenintheNorthernTerritoryarebenefittingfromabitofmagic–Abracadabra!InNovember2007theTelstraFoundationannouncedits$750,000supportofauniquereading,writingandlearninginteractivesoftwaretoolthatwillhelpIndigenousprimaryschoolchildrenimprovetheirliteracyskills.

SpeakingattheannouncementinDarwin,GeoffBooth,TelstraFoundationDirectorandTelstraCountryWideGroupManagingDirector,saidthattheTelstraFoundationwascommittedtoconnectingchildrenandyoungpeopletotheircommunities,andliteracyskillswereakeypartofachievingthisaim.

“Thisgrant,whichisoneofthelargestgivenbytheTelstraFoundation,demonstratesourcommitmenttohaveasignificantimpactonsociallyandgeographicallyisolatedchildren.Theuseofthisinnovativesoftwarehasbeenproventoassistchildreninsimilarsituations,andwe’reabsolutelythrilledtobepartofsuchimportantwork,”Geoffsaid.

Projectleader,AssociateProfessorTessLeafromtheSchoolforSocialandPolicyResearchatCharlesDarwinUniversity,saidthatdespitespecificattemptstoimproveliteracyskillsinfourtoeight-year-oldIndigenouschildreninrecentyears,statisticsindicatedtherewasstillasignificantproportionthatwerefailingtolearnbasicreadingskills.

“EducationoutcomesforAboriginalpeopleinnorthernAustraliaareconsistentlybelowminimumliteracyandnumeracybenchmarklevelsacrossalllevelsofschooling,”Tesssaid.

ChildrenfromtheLudmillaPrimarySchoolinDarwinenjoytheAbracadabra!Program.

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In2007/08,theTelstraFoundationCommunityLeadershipProgramwasdevelopedandpiloted.ThisnewinitiativeisacapacitybuildingprogramthatlinksTelstraexecutiveswithleadersfromcommunityorganisations.TheTelstraFoundationisworkinginpartnershipwithSocialVenturesAustraliatodeliverthisprogram.

FormoreinformationontheTelstraFoundation’sprogramsvisitwww.telstrafoundation.com.au

SponsorshipTelstraisoneofthelargestcorporatesponsorsinAustraliaandourdiverserangeofsponsorshipstouchAustraliansfromallbackgroundsandcommunitiesrightacrossthecountry.TelstraisproudofthepartitplaysinsupportingAustralia’srichculturalheritageanddevelopment.

In2007/08,Telstraprovidedsponsorshipofthefollowingeventsandprograms:

WWF – AustraliaInNovember2007,TelstraannouncedanewpartnershipwithWWFAustralia.TheWWFBuildingNature’sSafetyNetprogramaimstodrivetheincreasedacquisitionofprotectedareastoestablishsafehavensforAustralia’swildlifeandhelpthemcombattheimpactsofhabitatlossandclimatechange.AseriesofTelstra-fundedcommunityserviceannouncementsweredevelopedfortelevision,radioandprintmediatohighlighttheplightofmanyofournativeanimals,withsomeofthehighestendangermentandextinctionratesintheworld.TheadvertisementsfeaturedtwodistinctivethreatenedAustraliananimals–thewombatandmarineturtles.

Telstra Assistance FundWithamissiontohelppeopleachievesuccessintheirchosensport,theTelstraAssistanceFundprovidesassistanceatthemostfundamentallevelbyprovidingmuchneededequipmenttosportandcommunityclubsacrossAustralia.Overthepastfiveyears,theTelstraAssistanceFundhascontributedover$5millionworthofsportingequipment,fromfootballsandswimmingaidestorescuetubesandboards,tomorethan4,000sportsandcommunityclubs.InJune2008theTelstraAssistanceFundprovidedanother$1.25millionworthofequipmenttoAFL,rugbyleague,soccer,swimmingandsurflifesavingclubsacrossAustraliafromarecordnumberof3,191applications.

Telstra Road to TamworthConceivedin2003,theTelstraRoadtoTamworthcompetitionisanationwidetalentquestofferinga$140,000prizepackageforthewinnerandthechanceofalifetimeforaspiringmusicians.FinalistshavetheopportunitytoperforminTamworthwiththeoverallwinnergoingtothehomeofcountrymusicinNashville,Tennesseetorecordtheirdebutsingleandlaunchtheircountrymusiccareer.Thecompetition’sbestaspiringsongwriteralsoheadstoNashvillethroughtheSongwritersEncouragementAward.The2008competitioninvolvedaseriesof20heatsstagedacrossregionalAustralia.Heatwinnersreceived$1,000toassistwiththeirtraveltoTamworthforthecompetition’sgrandfinal,stagedduringtheTamworthCountryMusicFestivalinJanuary2008.Thisyear’swinnerswereJasmineRae(TelstraRoadtoTamworthAward)andMarkWells(TelstraRoadtoTamworthSongwritersAward).

The Australian Ballet Telstra’spartnershipwiththeAustralianBallethasbeenrunningfor24years.Itisoneofthelongestrunningartssponsorshipsinthecountry.ThesponsorshipincludestheannualTelstraBalletDancerAward,whichrecognisestheexceptionaltalentofyoungperformerswiththeAustralianBallet,notonlyfortheircreativeaccomplishments,butfortheirleadershipskillsandcommunityendeavours.The2007winneroftheawardwasQueenslandsoloist,25yearoldDanielGaudiello.In2007/08,TelstraalsomadeballetmoreaccessibletomorepeopleviaitssponsorshipoffreeoutdoorperformancesinMelbourneandBrisbanewhichattractedover7,000peopleateachevent.

Telstra Developing Athletes Grant Scheme TheTelstraDevelopingAthletesGrantSchemeallocates$50,000fundingtoyoungathletesidentifiedbytheAustralianParalympicCommittee’sTalentSearchProgramashavingthepotentialtorepresentAustraliaatthe2008BeijingParalympicGames,theVancouver2010ParalympicWinterGamesortheLondon2012ParalympicGames.Thisyear,100grantswereprovidedtoAustralia’smostpromisingathletes.

2. Communities matter

ZanesHolmes(ironman),JasonStevens(formerrugbyleagueplayer),JohnAloisi(Socceroo),BrookeHanson(formerOlympicswimmer)andBenDixon(formerAFLstar)withtheirjuniorcounterpartsatthe2008TelstraAssistanceFundlaunch.

Makingapositiveandlastingdifferencetothelivesofchildrenandyoungpeople

Telstra Beach to Bush Surf Safety Program ThroughoursponsorshipofSurfLifeSavingAustralia,theTelstraBeachtoBushprogramtravelstoregionalcommunitiesinAustraliateachingschoolchildrensurfandlocalwaterwaysafetylessons.In2007/08theprogramresultedinover45,000childrenparticipatingintheprogramfromover330regionalschools,andaimedtocombatsurflifesavingstatisticsthatrevealedthatthosewholivemorethan50kilometresfromthebeachareoverrepresentedindrownings.

FormoreinformationonTelstra’scommunitysponsorshipprogramvisitwww.beinvolved.telstra.com

VolunteeringAtTelstrawebelievethatoneofourmostimportantcorporateresponsibilitiesistovoluntarilycontributeresources,people,technology,infrastructure,productsandservicestosupportthecommunitiesinwhichweoperate.Volunteeringhasbeencreditedtogivingourpeopleadditionalandtransferableskills,increasingourcompany’sstandinginthecommunity,andimprovingworkforcemoraleresultinginimprovedrecruitmentandretention.Italsoprovidesthecommunitywithmotivatedandskilledvolunteersthatcanextendthecapabilitiesofnot-for-profitorganisations.

Telstrapromotesandfacilitatesvolunteeringopportunitiesforemployees,andencouragesemployeestovoluntarilyparticipateinactivitiesthatsupporttheorganisations,charitiesorcommunitygroupswithwhichtheyareconnected.

InstrumentalinhelpingtheMorsecodiansshareBacktoMorseCodeWeekwereSueLamshed,Telstra’sCorporateAffairsManagerandBelindaHarris,CustomerServiceSpecialist,inSouthAustralia,andJanedeGault,Telstra’sCorporateAffairsManagerintheNorthernTerritory.Suesaidthattheteamsawtheimportanceofcelebratingourtelecommunicationspastandremindingpeopleofhowfarwehavecome.

“WehadalotoffunpullingtogetherthehistoricmaterialthatcelebratesandshowswhatAustraliansinthe19thcenturyusedtocommunicateoverlongerdistances.Itisamazinghowmuchprogresshasbeenmadesincethe1870s,”Suesaid.

Telstra’sCommunityInvestmentareafinanciallysupportedBacktoMorseCodeWeekthisyearandvaluableassistancewasprovidedonthegroundfromtheTelstrateamsinAdelaide,AliceSpringsandDarwin.

Step back in timeCase studyAustralia’stelecommunicationshistorycelebratedanothermilestoneinJune2008,withBacktoMorseCodeWeekinSouthAustraliaandtheNorthernTerritory.

TheMorsecodianFraternityofSAandNT,inconjunctionwithTelstraandtheMyerCentre,invitedSouthAustraliansandTerritorianstoexperienceMorseCodethroughaliveexhibitionandmessagesbeingsentoverthefirstelectriccommunicationslinkjoiningAustraliatotherestoftheworld–theOverlandTelegraphLinefromAdelaidetoAliceSpringsandonwardtoDarwin.

SirCharlesTodd,SuperintendentofTelegraphs,influencedtheSouthAustralianGovernment,independentoftheotherstates,tobuildtheOverlandTelegraphLinefromPortAugustatoDarwintoconnectwithanunderseacabletoLondonbackinthe1870s.Whenthehistoriclinewascompletedon21October1872,AdelaidebecamethehubforAustralia’sfirstspeedycommunicationslinkwiththeworld.

TheMorsecodiansentertainedvisitorsattheMyerCentreTelegraphStationinAdelaide,theLyonsCottageTelegraphStation(originallytheBritishAustraliaTelegraphCompanycottage)inDarwin,andtheHistoricOldTelegraphStationinAliceSprings,withtelegramsbeingsentbetweenthedestinations.

LaurenceWallace,Morsecodian-extraordinaireinAdelaide,wasinstrumentalinhelpingcelebrateBacktoMorseCodeWeek.Laurence’svisionwastoshowcasecommunicationsfromthe19thcenturyhistoricOverlandTelegraphtothe21stcenturycommunicationsoftoday–includingNextG™,mobilesandbroadband.

“WiththeassistancefromtheteamatTelstra,wehavebeenabletoshowthosewhovisitedtheBacktoMorseCodeWeekexhibitionintheMyerCentreatAdelaidehowfartelecommunicationshaveadvancedovertwocenturies,”Laurencesaid.

LawrieWallacesendingaMorseCodeTelegram,June08.

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VolunteeractivitiesofTelstra’speoplein2007/08includethefollowing:

‘Yabber’ – Telstra’s people portalTelstrapeopleareaninventive,caringandmotivatedgroupinvolvedineveryaspectofAustralianendeavour.Thisyear,‘Yabber’–Telstra’sintranetpeopleportal–wasintroducedasaplacewhereouremployeescantelltheirownstoriesandcelebratetheirachievements.Yabberprovidesanopportunityforallemployeestosharetheirtriumphs,personalchallengesandpassions,aswellaskeepingstaffupdatedwiththelatestTelstraFoundation,corporateresponsibility,sponsorshipandDiversity@Telstraactivities.Everyweek,thesiteisupdatedwithnewstories,andonceamonththestoriesandnewsarecollatedintoanelectronicnewsletterthatissentdirectlytoTelstrapeopleviaemail.

Legal Services Community ContributionTelstra’sLegalServicesgrouprunsitsowncommunitycontributionprojecttoprovidestaffmemberswithleadershipskillsandopportunitiesto“giveback”tothecommunity.Inadditiontoone-offcharityfundraisingactivities,keyongoingvolunteeringinitiativesinclude:along-runningprogramtutoringmigrantsinEnglishwiththeAdultMigrantEducationCentre;amentoringprogramforhighschoolstudentsfromChifleyCollegeinWesternSydney;andaCyberVolunteeringprogramwherestaffprovideanswerstolegalproblemssentviaemailfromchildrenthroughoutAustraliafortheNationalChildren’sandYouthLawCentre.

World’s Greatest ShaveCurrently,morethan30,000Australiansarelivingwithleukaemia,lymphomaormyelomabutonlyfouroutoftenadultssurvive.ThemoneyraisedfromtheLeukaemiaFoundationWorld’sGreatestShavedirectlysupportspatientsandtheirfamilies.TelstraemployeeshavebeeninvolvedintheWorld’sGreatestShaveforeightyears.Thisyear,32employeesfrombusinessunitsacrossthecompanyregisteredfortheWorld’sGreatestShaveandraised

$34,000fortheLeukaemiaFoundation.MichaelLewisfromTelstraOperationscoordinatesTelstrastaffparticipation,andsaysthatTelstraisoneofthetopfiveLeukaemiaFoundationdonorgroupsinVictoriaandamongstthetop30nationally.

Perspectives on Parkinson’sSeniorCommunicationsAdvisorNerissaMapeswasdiagnosedwithParkinson’sdisease–adegenerativeneurologicalconditionusuallyassociatedwithelderlypeople–atonly28.Facingalifelongbattle,Nerissaestablishedafoundation,PerspectivesonParkinson’s(POP)withaverycleargoalinmind–acureforParkinson’sdiseaseinherlifetime.

AfterappearingontheABC’s7.30ReportinDecember2007NerissawasoverwhelmedbytheencouragementanddonationsfromtheTelstracommunity.NerissakeepsemployeesuptodatewiththelatestPOPnewsthroughYabber.Shehasraisedaround$47,000forresearchundertakenbytheHowardFloreyInstituteandeducation,counsellingandawarenessactivitiescoordinatedbyParkinson’sAustralia.Seewww.pop.org.au formoreinformation.

Port River DolphinsInApril2008,theteamatBigPondinAdelaidedecidedtoplayapartinprotectingthePortRiverdolphins.Everyyearmanyofthedolphinsarekilledandinjuredthroughboatingaccidentsanddeliberateshootings.Withcorporatesupport,theareahasbeendeclaredasanctuaryandisnowregularlypatrolledbygovernmentrangers.TheBigPondteamhaveadoptedtwoofthedolphinsandparticipateinfundraisingeventstohelp

protectthedolphinsandtheirhabitat.CentremanagerNicCaniouandemployeeengagementleadMichaelSparksseethisasagreatopportunityfortheteamtocontributetothecommunity.

World of Work – WOW!In2007/08,theTelstraFoundationhostedseveneventsaspartoftheEducationFoundation’sWorldofWork(WOW)program.WOWbuildsyoungpeople’scapacitytoeffectivelyparticipateintheglobalworldofwork.Withafocusonyoungpeoplefromsociallyandeconomicallydisadvantagedcommunities,WOWtakesgroupsof25Year9and10studentsfromVictorianstatesecondaryschoolsintocompaniesinMelbourne’sCBDtoexplorethequestion“Whatdoesittaketosucceed?”

Overtheyear,thirty-fiveTelstrastaffvolunteeredtheirtimetoparticipateinforumsthatexposedstudentstonewlearningopportunities,introducedthemtoTelstra’sleadingtechnologyandputtheirnetworkingskillstothetest.

RMIT Business Masters ProgramForthethirdyearrunning,Telstrahostedgroupsof25studentsofRMIT’sBusinessMastersProgramfor12weeksoftheirsemesterprogram.ThesessionsprovidedpracticalinsightintothemanagementandimplementationofcorporateresponsibilitybycorporationsacrossAustralia,andspecificallybyTelstra.DrPhilBurgess,GroupManagingDirector,PublicPolicy&CommunicationsandMariaSimpson,ManagerCorporateResponsibilityandCommunityInvestment,assistedwiththereviewandmoderationofstudents’finalresearchprojects.

2. Communities matter

Telstrapeopleareaninventive,caringandmotivatedgroupinvolvedineveryaspectofAustralianendeavour

Telstra Historical Collection Telstra’shistoricalcollectionconsistsofthousandsofartefacts,photographsanddocumentsrepresentingthedevelopmentoftelecommunicationsinAustraliaoverthepast150yearsandthesignificantroleTelstraanditspredecessorsplayedinthis.ThecollectionismanagedbysmallgroupsofdedicatedvolunteerswhoarepassionateaboutthecontributionmadebythePostMasterGeneral’sDepartment,TelecomandTelstratoAustralia’ssocialandeconomicdevelopment.Thevolunteersspendhundredsofhoursoftheirtimeeachyearcollecting,fixing,organising,cataloguinganddisplayingthecollectionforpublicviewing.

ThisyearTelstraChairman,DonaldMcGauchie,visitedtheBankstownandHawthornmuseums,thefirstTelstrachairmantodoso.TelstraorganisedforthecollectiontobeconsolidatedinJanuaryunderthesupervisedcareofthethreemuseumlocationsinClayfield(Qld),Bankstown(NSW)andHawthorn(Vic).LocatedinTelstrapremises,somerefurbishmentofeachmuseumcontinuesbyTelstra’sFundamentalPlanninggroup.TheSydneyMajorMetroteamprovidedtheBankstownvolunteerswithaTelstrabrandedcanopyfortheirtrailertobetterprotectartefactsandmaterialstransportedtovariousdisplaysandactivities.

Planned actions for 2008/09• Developandpilotanemployeematchedgivingprogram

todonatefundstocommunityorganisationsnominatedbyTelstraemployees.

• Provideover$3.5millioningrantsthroughtheTelstraFoundationtohelpcommunityorganisationsconnectchildrenandyoungpeopletotheircommunities.

“We’reinvestingheavilyinworld-classdevelopmentprogramsforourmanagersandleaders.I’mdelightedthatsixparticipantsinTelstra’sExecutiveLeadershipProgramaretakingthisuniqueopportunitytoactasmentors.

“Theprogramwillhelpdeveloptheirstrategicleadershipcapabilitiesbyplacingtheminadifferentandchallengingleadershipenvironment.

“It’salsoawonderfulopportunityforthesixnon-profitorganisationsinvolvedtogainsupportandstrategicadvice,aswellastoformasolidrelationshipwithTelstraandthebroadercorporatecommunity,”Andreasaid.

“WearereallypleasedthattheTelstramentorswhoareinvolvedinthisprogramhavecomefromsuchdifferentareasofTelstratobepartofthisTelstraFoundationprogram.Webelievebycreatingthisprogram,itwillprovidevitalknowledgethatwillbenefittheindividualsinvolved,theirorganisationsandtheentirecommunity,”Georgiasaid.

Connecting hearts, heads and the community Case studySixseniorTelstraexecutiveshavementoredsixnon-profitleadersthankstoaninitiativelaunchedbytheTelstraFoundationinNovember2007.TheCommunityLeadershipProgramprovidessupport,encouragementandasoundingboardtonon-profitleadersastheyhelptheirorganisationsgrow,whilealsoprovidingtheTelstraexecutivesanopportunitytohelpcreatebettercommunities.

Thenewprogram,deliveredinpartnershipwithSocialVenturesAustralia,isbuildingimportantseniorlevelrelationshipsbetweenTelstra’scorporateleadersandtheirnon-profitcounterparts.TherelationshipsareofferingtransformativeandenergisingexperiencesthatgivebothTelstramentorsandnon-profitleadersanewsenseofhowbusinessandcommunityorganisationscanworktogethereffectively.

“ThisisagreatprogramthatallowsTelstraexecutivestoconnectwiththeirheartsandheadstothecommunity,whichisarareexperienceandonethatwillbebeneficialtoboththementorandthecommunityorganisation,”GeorgiaSymmons,NationalManagerTelstraFoundationsaid.

“Thenon-profitorganisationsinvolvedareourSocialInnovationGrantsrecipients.TheTelstraFoundationknowsthatmorethanmoneycountswiththenon-profitsector,andherewe’vebeenabletofacilitatebothfundingforprojectsaswellasaccesstothetalentandexpertiseofourleaderswithinTelstra.”

Telstra’smentorshavebeenpartneredwiththeRoyalChildren’sHospitalFoundation(Qld),StLucy’sSchool(NSW),NovitaChildren’sServices(SA),InspireFoundation(NSW),MurdochUniversity(WA)andCharlesDarwinUniversity(NT).

SpeakingatthefirstmeetingoftheCommunityLeadershipProgram,AndreaGrant,GroupManagingDirectorHumanResources,saidTelstrahasidentifiedleadershipcapabilityasbeingcriticaltothesuccessofourtransformation.

DrTessLeafromCharlesDarwinUniversitywithJulesScarlett,DirectorCorporateSecurityandInvestigation,Telstra–participantsintheCommunityLeadershipProgram.

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3Employees

matter

Telstra is proud to offer a safe and supportive environment, where employees are valued and have the opportunity to reach their full potential. Andrea Grant, Group Managing Director, Human Resources

TelstraisoneofAustralia’slargestemployersofferingarangeofcareeropportunitiesacrossmultipledisciplines.Withadiverseandculturallyrichworkforce,Telstratakesitsresponsibilitiestoitsemployeesseriously.ProvidinggoodjobsatgoodwagesisafundamentalcorporateresponsibilityprincipleatTelstra.

Wearecommittedtoprovidingsafe,equitableandsupportiveworkingconditionsforourpeopleandcreatingacultureofopportunity–onethatgiveseveryemployeeanopportunitytomakeaneffectivecontributionandtopursuetheirambitions.Creatingasafeandengagingworkingenvironment,whereourpeoplearevalued,respectedandwell-rewardedleadstoimprovedproductivity,profitabilityandreputation.Ultimatelythisalsoprovidesgreatervaluetoourcustomersandshareholders.

Addressingissuessuchasemployeeengagement,diversityandwork-lifeflexibilityisincreasinglyimportant.AustralianBureauofStatisticslabourforceprojectionsindicatethat80percentoffutureworkforcegrowthinthenextdecadewillbeinthegroupover45yearsofage,andintheyear2020thenumberofpeopleleavingtheworkforcewillexceedthatenteringtheworkforce.Telstraisworkingtocreateanenvironmentwherewecanmeettheneedsofemployeesofallagesandattractandretainthebestpeople.TheworkofourDiversityTeamtoaddresswork-lifeflexibility,genderandagebalanceiscrucial.

Rapidadvancesinthedevelopmentofcommunicationstechnologiesandthecompetitivenatureofourbusinesscreateachallengeforustocontinuetofindtherightpeople.

InvestinginlearninganddevelopmentprovidesameansofbuildingTelstra’sworkforcetoensurethatwehavethecapabilitiestodeliverthenextgenerationoftechnologies.Thecontinuousdevelopmentofknowledge,skillsandinnovationandtheapplicationoftheseintheworkplacearecriticaltoTelstra’sfuturesuccess.In2007/08,weinvestedover$75millioninlearninganddevelopmentforouremployees.

Worldclassleadershipisalsocritical.Ourleadersmustbeabletoleadinacompetitiveglobalenvironment,inanindustrycharacterisedbyrapidchangeandcomplexlegalandregulatoryrequirements.Theymustbecustomerfocusedandsensitivetosocialandcommunityresponsibilitiesandexpectations.Telstrainvestsinanumberofenterprise-wideprogramstobuildleadershipcapability,includingFrontlineLeadershipandExecutiveLeadershipprograms.

InMay2008,wesawthehalf-waypointinTelstra’sfive-yeartransformation.Ourpeoplearefundamentaltothistransformationandaswecontinuethejourneyit’simportantthatemployeeshave‘enoughfuelinthetank’todealwiththeopportunitiesandchallengesthatcometheirway.Telstraoffersyear-roundsupporttoemployeesthrougharangeofmentalhealthandresilienceprograms.WetakeaproactiveandholisticapproachtosupportthehealthandwellbeingofouremployeesandareproudtohavebeenrecognisedthisyearforourleadershipinmentalhealthissuesintheworkplacebytheMentalHealthCouncilofAustralia.

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Asacompany,themostimportantthingwecandoforouremployeesandtheirfamiliesistoprovidesecuritybybuildingonoursuccessesandensuringTelstra’slong-termfuture.Wearedeterminedtocreateanorganisationthatisagreatplacetowork,thatrewardsperformanceandofferstermsandconditionsthatattractandretainthebestpeople.

Building a world class talent baseEmploymentAsat30June2008,Telstraemployed46,649fulltimeequivalentemployees,agencyandcontractorstaffincludingstaffemployeddirectlybyTelstraCorporation,ourdomesticcontrolledentitiesandouroffshorecontrolledentities.Thisequatestoadecreaseof2.5percentor1,191fulltimeequivalentemployeesduring2007/08.ThedecreaseismainlyattributabletoTelstra’sTransformationstrategy.

Thereare31,102Telstra-paidstaff,whichexcludescasualstaff,allcontrolledentity-paidstaff,agencyandcontractorstaff.TheTelstra-paidstaffdefinitionisusedinourreportingofdiversity,performancemanagement,employeeengagementandhealth,safetyandenvironmentstatisticsinthisreport.

Workforce statistics

Totalworkforce

46,649 Fulltime,parttime,casual,agencyandcontractorFTEstaffinTelstraCorpdomesticandoffshorecontrolledentities

Fulltimestaffandequivalents

42,784 Totalworkforceminusagencyandcontractorstaff

Domesticfulltimestaff

33,982 FulltimestaffinTelstraCorpanddomesticcontrolledentities,includingSensis

Telstra-paidstaff

31,102 FulltimeandparttimestaffpaidbyTelstraCorp,excludescasualstaff,allcontrolledentity-paidstaff,agencyandcontractorstaff

Around65percentofemployeesareemployedundercommonlawcontracts,AustralianWorkplaceAgreementsandIndividualTransitionalEmploymentAgreements.Theremainderisemployedundercollectiveagreements.70percentofemployeesonindividualagreementscanreceiveperformanceincentivepayments.

Employee benefits and arrangementsTelstraprovideshighlycompetitiveandattractiveremunerationpackages,atorabovetheminimumlegalrequirements.Telstracomparestheremunerationofouremployeesagainstrelevantmarketdatatoensureweremunerateemployeesfairlyandequitably.

TheprinciplesunderlyingTelstra’songoingdevelopmentofemploymentarrangementsincludeenhancingemployees’capacitytomeetcustomerneeds,rewardingexcellentperformance,attractingandretainingemployees,supportingtransformation,improvingflexibilityandcontinuallygrowingproductivitythroughperformance-basedremunerationandrewards.

Telstraofferschoiceandflexibilitythroughsalarypackagingtoeligibleemployeestohelpthempackageoptionstosuittheirparticularcircumstances.SalarypackagingoptionsincludeOwnShare(theopportunitytopurchaseTelstraSharesonapre-taxbasis)andacomprehensivechoiceofotheroptionssuchasTelstraproducts,motorvehicles,carparking,healthinsuranceandfinancialadvice.

Anewlookintranetwebportalwasintroducedin2007/08toprovideemployeeswithsimplerandeasieraccesstoinformationabouttherangeofemployeebenefits.Thisincludesawiderangeoflifestylebenefits,availabletoemployeesviatheMyRewards@Telstraprogram.

TelstraSuper,acorporatesuperannuationfund,alsooffersouremployeesarangeofmemberbenefitsincludinglowmanagementfeesandfreefinancialplanningadvice.

TelstracontinuestoprovidetheLife&CareerTransitionprogram,whichsupportsemployeesfacingalifeandcareertransitionarisingfromredundancy.Thisprogramoffersaccesstoarangeofflexibleoptionssuchasretirementplanning,imageconsultingandnetworking,aswellassupporttoimmediatefamilies.

Workplace relationsAkeyfocusduring2007/08wasthedevelopmentofarobustemploymentstrategytosupportTelstra’sbusinesstransformationandcompliancewithworkplacerelationschanges.TheelectionoftheFederalLaborGovernmentinNovember2007sawtheintroductionoftheForwardwithFairnesslegislationinMarch2008.ThenewlegislationabolishedAustralianWorkplaceAgreementsandintroducedIndividualTransitionalEmploymentAgreements.Telstrarevieweditsindividualagreementsandpoliciestocomplywiththenewlegislation.

Wearecommittedtoresolvingworkplaceissuesquicklyandfairly.Telstra’sInternalResolutionPolicyensuresthateveryemployeehastherighttobetreatedfairlyandtounderstandthereasonsfordecisionsandactionsthatimpactthem.InTelstra,thereisasharedaccountabilitytoresolveanissuebetweenanemployeeandthepersonwhoactedormadethedecision.Ourinternalresolutionprocessisopenandtransparent.Telstraalsohasdisputeresolutionoravoidanceprocessesinitscollectivearrangements.

Telstrarespectstherightofindividualstobemembersofatradeunionanddoesnotdiscriminateagainstanyemployeeonthebasisoftheirpoliticalaffiliationsorbeliefs.

3. Employees matter

38

Employee engagementIn2007/08,acensusemploymentsurveyofTelstraemployeeswasconducted.Thesurveyprovidesallemployeestheopportunitytoexpresstheirviewsabouttheirjobs,thecompany,andtheirworkingenvironment.Itdeliversinsightintowhatreallyengagespeople,indicatespeople’salignmenttoTelstra’sdirection,andprovidesinformationontheextenttowhichtheyareenabledtoperformtotheirpotentialandcontributetotheongoingsuccessofTelstra.TheEmployeeEngagementSurveycoverseightkeyareas:employeeengagement;strategyalignment;resultsfocus;customerfocus;deliverycapability;culturalalignment;strategicleadership;andworkgroupleadershipeffectiveness.

Keyhighlightsofthesurveyresultsinclude:

• anincreasefrom82percentto84percentinthenumberofemployeeswhoparticipatedinthesurvey;

• employeeengagementincreasedfrom73percentto74percent;

• scoresincreasedinalleightcategoriesfromthe2006/07survey.Themostsignificantincreaseswereintheworkgroupleadershipeffectivenessandstrategicalignmentcategories,wheretheimprovementwasfourpercentinboth;

• anaverageincreaseacrossallcategoriesof2.5percent;and

• TelstraisperformingatorabovetheAustralianNationalNorm(TowersPerrinInternationalSurveyResearch)andclosingthegapontheGlobalHighPerformingCompaniesNorm.

Twonewquestionsspecifictocorporateresponsibilitywereincludedinthisyear’ssurvey.Resultsshowedthat:

• 39percentofemployeesagreedthatTelstra’scorporatesocialresponsibilityperformanceisanimportantfactorintheirchoicetoworkhere;and

• 78percentofemployeesbelieveTelstraisanenvironmentallyresponsiblecompany.ThisisabovetheAustralianNationalNormat74percent.

Thesefiguresprovideabaselineforfutureemployeesurveysandindicateopportunitiesforimprovementsinbuildingemployeeawarenessoftherangeofourcorporateresponsibilitiesandachievements.

Recruitment InSeptember2007,Telstralaunchedanin-houseCareersCentretomanagethecompany’sinternalandexternalrecruitmentneeds.TheCareersCentreprovidesaone-stop-shopforarangeofservicesincludingrecruitment,assessmentandengagement.Thiscentralisedfunctionwillreducetimespentonrecruitmentactivities,improvethequalityandconsistencyofstaffrecruitedthroughbettersourcing,selection,engagementandnewstarterprocesses.TheCareersCentrewillalsohelpusretainourtalentpoolbyofferingassistancetothoselookingfortheirnextinternalcareermove.In2007/08,1,745newemployeeswererecruitedthroughtheCentre.

Performance ManagementOurannualperformancereviewsystemfocusesonexpectedstandardsofbehaviour.In2007/08twonewmoduleswithafocusondevelopingskillsinperformanceplanningandgivingfeedbackwerecreatedtosupporttheperformancereviewprocess.In2007/08:

• 90percentofemployeesreportedhavinganannualreviewdiscussion(upbyfourpercent);

• 85percentofemployeesreportedthattheirobjectivesalignwiththoseoftheirmanager’s(upby14percent);and

• over4,000employeescompletedanonlinelearningmoduletoassistwiththenewreviewprocess.

Learning and development OneofthekeydriversofourTransformationisthecontinuousdevelopmentofknowledge,skillsandinnovation,andtheapplicationoftheseintheworkplace.LearninganddevelopmentisacriticalactivitythatsupportsourorganisationtodelivertheperformancenecessarytoachieveourTransformationvision.

Ourlearningfunctionisstructuredsothat‘JobReady’professionalsandonlinelearningresourcesareavailablewhenandwheretheyareneeded.

Formalandstructuredemployeelearninganddevelopmentisofferedviaseveralstructuredmodels,leveragingtheverybestintechnologyandonlinelearning(Learn.Achieve),partnershipswithexperts(TelstraLearningAcademy),andthedevelopmentofourleaders(ExecutiveLeadershipandFrontlineLeadershipprograms).

InOctober2007,welaunchedthePeopleLeaderEngagementToolkit,aresourcetosupportTelstraemployeestodeveloptheirleadershipcapabilities.NewprogramsforFrontlineLeadershipandExecutiveLeadershipwerealsodeveloped.ThroughthesenewprogramsTelstrarecognisestalent,investsinleadersofthefuture,andenablesmanagerstoprovideguidance,coachingandsupporttoteammembers.

Thisyear’slearninganddevelopmentachievementsinclude:

• aninvestmentinlearninganddevelopmentinexcessof$75millionrepresentingapproximately$1,626peremployee;

• 573,763onlinelearningcoursescompletedthroughLearn.Achieve;

• 6,500employeesparticipatedinFrontlineLeadershipprograms;

• 60employeesparticipatedinthreeExecutiveLeadershipprograms;and

• 252newjob-specifictrainingcoursesweredevelopedbytheTelstraLearningAcademy.

Enhancing diversity and opportunity Telstraisattheforefrontinprovidingemployment,andinformationandcommunicationtechnologyservicestodisadvantagedormarginalisedgroups,includingpeoplewithdisability,theelderly,peopleofAboriginalandIslanderdescent,andthosefromculturallyandlinguisticallydiversebackgrounds.

3. Employees matter

39

Havingadiverserangeofemployeesbetterenablesustorepresentourcustomerbase,havethehighestqualityworkforceandbeanemployerofchoice.Theoverarchingprincipleisthatadiverseworkforcedeliversproductivityandincreasedrevenuetothebusiness.

Telstraiscommittedtoensuringthatourworkenvironmentpromotesdiversityandisfreeofunlawfuldiscrimination.Thisprincipleisreflectedineverythingwedo–fromourleadership,performanceandtalentmanagement,throughtoourbusinessplanning,strategicinitiativesandrewardsystems.

Ourcompany-wideDiversityCouncil,consistingoffiveGroupManagingDirectors,ispremisedontheprinciplethatdiversityisgoodforbusiness.EachmemberoftheDiversityCouncilreportsdirectlytotheCEOandchampionsoneofoursixdiversitypriorityareas–agebalance,gender,culturaldiversity,work-lifeflexibility,disability,andsexualorientationandgenderidentity.

Eachpriorityareaisaddressedbyataskforceofseniormanagersresponsiblefortheimplementationofasubstantialprogramofworkthatwillprovidesignificantbenefitstoouremployeesandtothecommunityacrossthesesixpriorityareas.

Employeesbyagegroup

Agerange %oftotalstaff

18–24years 7.5%

25–34years 24.5%

35–44years 32%

45–54years 26%

55+years 10%

Age balanceTelstrahasrecognisedthebusiness-criticalnatureofdemographicchange.Insomepartsofourbusiness,manyvaluableandknowledgeableemployeesareapproachingthelaterstagesoftheircareers.OftentheseemployeeshavegivenmanyyearsofvaluableservicetoTelstra.Toencouragetheseemployeestostayandoffermoreflexibilityinhowtheychoosetowork,TelstrahasstartedapilotoftheChoose.CreateprogramintheTelstraServicesandTelstraEnterpriseandGovernmentbusinesses.Theprogramprovidestoolsforemployeesandtheirbusinessestoexaminealternativewaysofworking.Eligibleemployeesareinvitedtoexploreflexibleworkoptions,andlookatbalancingtheirlivesoutsideofwork.

GenderIn2007/08,womenmadeupjustover30percent(30.62percent)ofTelstra’stotalworkforce.ThedevelopmentofourwomeniscriticaltoTelstra’songoingbusinesssuccessandwehaveanumberofnewinitiativesunderwaytohelpimproveourperformanceinthisarea.

InSeptember2007,thesuccessoftheTelstraVirtualWomen’sNetworkwashighlightedbywelcomingits1,000thmemberwithinsixmonthsofitstarting.LaunchedonInternationalWomen’sDayinMarch2007,theNetworkcurrentlyprovidesvaluablecareersupporttoover1,500TelstrawomenfromalloverAustralia.TheNetworkgivesTelstrawomenthechancetocometogetherfornetworkinganddevelopmentopportunities,andtosupporteachothertoachievesuccesswithinTelstra–bothforthemselvesandthebusiness.

Workforcediversity

2007/08 2006/07 2005/06 2004/05 2003/04

Telstrapaidemployees 31,102 33,002 34,551 37,087 36,128

Women 30.62% 30.9% 30.56% 30.59% 30.06%

AboriginalandTorresStraitislander 0.43% 0.47% 0.56% 0.60% 0.64%

CulturallyandLinguisticallyDiverse 5.85% 6.28% 8.75% 9.02% 9.41%

PeopleWithDisabilities 1.36% 1.16% 1.35% 2.01% 2.18%

3. Employees matter

Havingadiverserangeofemployeesbetterenablesustorepresentourcustomerbase

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3. Employees matter

Cultural diversity Forovertenyears,TelstrahascelebratedourIndigenouscommunityandtheircontributiontoAustraliaduringNationalAboriginalandIslanderDayofCelebration(NAIDOC)week.In2007/08,Telstra’sfestivitiesculminatedinacelebrationdinnertoannouncethewinnerofthe2007TelstraIndigenousAward.TheAwardrecognisesaTelstraemployeewhoprovidesoutstandingsupporttotheIndigenouscommunityortoourIndigenouscustomers.PietaJohnstonfromTelstra’sNationalIndigenousDirectorateinDarwinwontheawardin2007.

Anewadvisorygroup,theIndigenousReferenceGroup,wasformedinApril2008toprovideadvicetotheTelstraDiversityCouncilandIndigenousTaskforceonIndigenousemploymentandculturalawareness.TheDiversityCounciloversawthedevelopmentoftheIndigenousActionPlan,whichaimstocontributetoTelstra’scommercialsuccessthroughthepromotionofIndigenousrecruitmentandretention.Thethreefocusareasidentifiedforactionare:improvedrecruitmentandretentionofIndigenousstaff;increasedculturalawareness;andpromotionofReconciliation.

Work-life flexibilityWork-lifeflexibilityatTelstraisunderpinnedbyprogressiveleavepoliciesincludingparentalleave,personal(includingcarer’s)leave,culturalleaveandtheabilitytopurchaseadditionalleave.

Aswellasthepossibleenvironmentalgains,Telstrarecognisesthepotentialbenefitsofteleworkingintermsofemployeeproductivity,satisfactionandwellbeing.ParticipantsinaTelstraemployeeauditinlate2007listedthemostimportantflexibleworkoptions,inorderofpriority,as:teleworkingfromhomeregularly;teleworkingfromhomeoccasionally;andflexibleleavedays.ThesefindingswillallowTelstratofurtherdevelopitsprogramofworkaroundflexibleworkoptions.

Telstrarecognisesthechallengefacedbymanyemployeesinfindingavailable,affordablechildcare.Wearecurrentlyexaminingtheoptionofcompany-purchased,preferredplacementandhavesurveyedstafftoidentifythelocationswherethereisthemostneedforassistance.

ToassistTelstrafamiliesinfindingchildcaresolutions,employeesareabletoaccessanonlinedirectoryservice,CareforKids,whichprovidesassistanceandinformationaboutchildcareservices,availability,casualservicesandgovernmentregulations.

Womeninmanagementroles

30-Jun-04 30-Jun-05 30-Jun-06 30-Jun-07 30-Jun-08

ExecutiveManagement 0.00% 11.1% 35.7% 26.7% 26.7%

SeniorManagement 16.0% 18.6% 22.2% 23.5% 19.7%

MiddleManagement 25.6% 26.6% 27.6% 27.4% 27.5%

Operational 31.0% 31.5% 31.2% 31.8% 31.6%

In2007/08,over500womenattendedtheeightVirtualWomen’sNetworkevents,whichincludedtheLegendsseriesofpanelsessionsfeaturingthealumniofwinnersfromtheTelstraBusinessWomen’sAwards.

Inlate2007,TelstrapilotedMyMentor,atenweekprogramforwomenthataimstoimprovestrategicbusinessskills.Basedonoutstandingfeedbackfromthe21participantsoftheinitialcourse,theprogramwasrolledouttoover440womenacrosstheorganisationin2007/08(seecasestudyformoredetails).

Telstra’sinauguralwomen’sconference,Stand.Out,washeldinMarch2008.Attendedby150ofTelstra’swomen,theconferencefocusedonperformance,careerdevelopmentandtheadvancementofwomen,particularlythroughmanagementlevels.Stand.Outwillbeheldagainin2009.

Figuresfromthe2006EqualOpportunityforWomenintheWorkplaceAgencycensusshowthatthepercentageofwomenatseniormanagementlevelsinASX200companieshasremainedconstantsince2004.WhilethepercentageofTelstrawomenemployedattheexecutivemanagementlevelhasremainedsteadyoverthepasttwoyears,therehasbeenadecreaseatseniormanagementlevel.In2007/08,womenwereemployedin60ofthe305seniormanagementpositions,adecreaseofsixfromthepreviousyear.Telstraiscommittedtoimprovingourperformanceinthisareaasournewinitiativescontinueduring2008/09.

DisabilityTelstraisproudtohavesponsoredManagers’Guide:DisabilityintheWorkplace.LaunchedinJune2008,theGuidewascoordinatedbytheAustralianEmployersNetworkonDisability,withinputfromaneditorialcommitteethatincludedTelstraemployees.ManyoftheTelstraemployeesprovidedtheirinsightandadvice,havingexperiencedfirst-handthechallengesfacedbyemployeeswithdisabilityintheworkplace.TheGuideprovidesinformationandsupporttomanagersofemployeeswithdisability,andaddresseseachstageofanemployee’sworkexperience,fromrecruitmenttoexit.Itwillbeprovidedtopeoplemanagerstohelpminimisethebarriersthatpeoplewithdisabilityfaceintheirworkingenvironment.TheguidehasbeendevelopedasareferenceforbothTelstraandotheremployers.

In2007/08,sixseniorTelstramanagersmentoreduniversitystudentswithdisabilityoveraperiodof16weeksaspartoftheWillingandAbleprogram.Thisprogramconnectsstudentswithdisabilitytoaone-on-onerelationshipwithamentorwhohasexperienceofworkinginanorganisationinthestudent’schosenfutureprofessionalarea.

TelstraalsoimplementedtheSteppingIntoprogramthatprovidedafour-weekworkinginternshiptothreeuniversitystudentswithdisability.ThisprogramwasimplementedinpartnershipwiththeAustralianEmployersNetworkforDisabilityandaimedtodeveloptheparticipants’businessknowledge,whiledevelopingtheskillsandconfidenceofTelstraemployeestorelatetopeoplewithdisability.

Enable@TelstraisanestablishedresourcegroupforTelstraemployeeslivingwithdisability.Itprovideseducationandinformation;leadershipopportunities;informalmentoringandnetworkingevents;andsupportandadviceabouttheaccessibilityofourworksites,productsandservices.Enable@Telstracurrentlyhas39members.

pipeline,fromchoosingmyson’sschool,whetherweshouldrenovateormove,andmyownfurthereducation,”Cherylsaid.

Monthsaftertheprogram,Cherylstillrefersbacktothecoursecontent–oftenwhileshe’sjogging.BecausethematerialisavailableinCDandDVDformat,Cheryl’sloadedthemodulesontoheriPod.“I’mstillreferringtotheprogram,andmakingsomedecisionsaboutmycareergoalsandfutureachievements”,sheexplained,“butInowknowIcankeeptakingpositivestepstowardsachievingthem.”

My Mentor program Case studyByherownadmission,whenCherylWoodsfirstreceivedherMyMentorkit,shelettheboxsitonherdeskforacoupleofweeks.Itwasjustanothertasktocomplete,inanalreadyhecticworklife.

Nowafully-fledged‘graduate’ofthepilotoftheMyMentorcourse,thebusyTelstraBusinesssalesmanagerisgladshefoundthetimetoparticipate.

Theprogramcoversamoduleaweek,providingtipsandtoolsforwomentoactivelymanagetheircareersandpersonaldevelopment.AsCherylfoundoutthough,it’snotjustabouttakingthatnextstepupthecorporateladder“Thesecondmoduleisaboutdevelopinga‘personalbrand’–ithelpedmeasksometoughquestionsofmyselfinregardstothetypeofpersonIwanttobe,”Cherylsaid.

Overthecourseoftenweeks,theMyMentorprogramaimstoincreasestrategicbusinessskillsinwomen,encompassingdecision-making,prioritisation,negotiationandinfluencingskills,increasingvisibility,networking,andtakingcalculatedrisks.Importantly,italsolooksatcreatingwork-lifebalance.

Byworkingthroughthetoolsprovided,Cherylcametotherealisationthatonthewaytobecomingasuccessfulbusinesswoman,motherandpartner,shehadsomehowstoppedmakingtimeforherself.Puttinghertime-managementandprioritisationlearningintopractice,shestartedtomakeregulartimetoexercise.MyMentorrecognisesthepositiveactionthatcancomefromtaking‘babysteps’–forCheryl,thiswasthefirstofmany.

“Workingthroughthecourse,Ifoundalotoflightbulbswereswitchingon,anditwasn’tjustaboutmywork.Iactivelyappliedthetoolstootherdecisions.Inowevaluatepossibleoutcomesaccordingtohowbadtheycanbe–butalsotherisksofnotacting.Ithasassistedmanydecisionsinthe

CherylWoods,SalesManager,TelstraBusiness.

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3. Employees matter

InAugust2007,TelstrawashonouredwithanExcellenceinAuslanInterpretingAward,winningthePrivateSectorOrganisationcategory.TheAwardsareorganisedbytheAustralianSignLanguageInterpreters’Associationtopubliclyrecogniseorganisationsthatprovideconsistentsupportforworkinginterpreters.

Sexual orientation and gender identityInMay2008,Telstrawasincludedonthelistofcompaniesthataresupportiveofgaymarriage.ThelistiscompiledbyAustralianMarriageEquality.ThiscomesattheendofanextensivepolicyreviewundertakenbyTelstraoverthepast18months.Asaresultofthereview,amendmentsweremadeto171instanceswhereTelstra’sinternalpoliciesusedinconsistentornon-inclusivelanguageinregardstorelationshipentitlements–forexample,‘spouse’,‘husband’and‘wife’.Policiesnowrefertoanemployee’s‘partner’,definedastwopeoplelivingtogetherasacoupleonagenuinedomesticbasis,irrespectiveofgender,adefinitionendorsedbyAustralia’sHumanRights&EqualOpportunityCommission.

Providing a healthy and safe environment Ouremployeesareinvolvedinawidevarietyofworkpractices,fromundergroundcablingandbuildingmobiletowerstoofficework,eachwithavastlydifferentsetofhealthandsafetystandards.AtTelstraweensurethatthepursuitofexcellenceincustomerservicedoesnotjeopardisethesafetyorhealthofouremployeesandcontractors.Astronghealthandsafetyculturewillreducethenumberofincidentsatwork,buildteammoraleandleadtogreaterproductivity.Telstraseekstogobeyondminimumlegalcomplianceanddeliverworld-classhealthandsafetyperformance.

PreventionTelstrahasimplementedaHealthandSafetyManagementSystemalignedwiththerequirementsofAustralian/NewZealandStandard4801.ThemanagementsystemisoverseenbyTelstra’sHealth,SafetyandEnvironment(HS&E)team.

Telstraappliesarobustriskmanagementframeworkandoccupationalhealthandsafetymanagementsystemacrossitsbusinessunits.InaccordancewithTelstra’shealthandsafetypolicy,thissystemincorporatesHS&EmanagementstandardsthatcaterforthevaryingrisksacrossTelstra’sbusinessunits.TheHS&Estandardscoverarangeofgeneralindustryhazards,aswellastelecommunications-specificissuessuchaselectromagneticenergy.

ThediversityofrisksacrossTelstra’sworkingenvironmentsrequiresasegmentedapproachtosafetytoensurethatweapplyappropriatestrategiesineachofourworkplaces.Ourprimarystrategicsegmentationisbetweenourfieldandnon-field(suchasofficesandretail)workplaces.ThefollowingtablehighlightstherisksandHS&Eperformanceofthesetwogroups.

Losttimeinjuries–fieldandnon-fieldstaff

Staff Common risks and issuesNumber of lost time injuries (LTI)

Lost time injuries frequency rate (LTIFR)

Fieldworkforce

Technicalfieldstaff Manualhandling,workingatheights,driving,electromagneticenergyandworkingalone

82 6.54

Non-fieldworkforce

Retailshops,callcentres,salesgroupsandofficeenvironments

Ergonomics,emergencies,electrical,stress,driving,customeraggressionandnoise

50 1.27

Total:132 2.54

DetailedriskprofileinformationforeachbusinessunitandgroupisusedinHS&Eplanningandauditing.RiskprofilesarereviewedannuallyatthecommencementofoperationalhealthandsafetyplanninginApril.

Theimplementationofouroccupationalhealthandsafetymanagementsystemismonitoredbyinternalandexternalauditsofourbusinessgroups,aspartofourself-insurancerequirements.

Compensation and rehabilitation Telstraisself-insuredforthepurposesofworkers’compensationundertheprovisionsoftheSafety,RehabilitationandCompensation(SRC)Act1988.TheActisadministeredbytheSafety,RehabilitationandCompensationCommission,whichsetstherulesforworkers’compensationprovisionandmonitorsourperformance.TheCommissionsetsindicatorperformancetargetsandin2007/08Telstraachievedallofthetargets,exceedingeightofthe11targets.

Telstramaintainsacomprehensiveinjurymanagementsystemcoveringbothrehabilitationandclaimsmanagementfunctions.Theinjurymanagementprocessiswellestablishedacrosstheorganisation,andaccessibletoallTelstrastaffviatheTelstraintranet.Telstra’sweb-basedinterfaceallowsmanagerstoaccesscurrentinformationtoenablethemtoeffectivelymanageclaimsandrehabilitationactivitiesandensurethebestpossiblecareforinjuredemployees.

Comcare ratingsOurregulatorComcareassignsa‘Tier’ratingtoTelstraandotherself-insuredlicensees.TheTierModelhasthreelevelswhichreflectthelevelofregulatoryoversightrequiredbyComcaretosatisfytheSafety,RehabilitationandCompensationCommissionofthelicensee’scomplianceofitsconditionsoflicence.Themodelacknowledgesandencouragesgoodperformanceandaffectsthelicencefeemodelthroughtheprincipleofuserpays.TelstrahasachievedaTier3(advancedlevel)ratingforprevention,andworkers’compensationandrehabilitation,indicatingahighstandardofinternalqualityassurance,strongmanagementsystemsandself-auditcapabilities.

Health, Safety & Environment performanceTelstra’sHealth,Safety&Environment(HS&E)performancein2007/08includes:

• thenumberofopenworkers’compensationclaimsremainedbelow2,000;

• 14externalHS&Eauditswereconducted.71percentofauditedbusinessgroupswerefoundtohaveeffectiveorhighlyeffectivelevelofimplementationofHS&Emanagementsystemsandtheremaininggroupshadatleastabasiclevelofimplementation;

• eightpercentreductioninworkers’compensationforwardliabilityfrom$196.5millionto$180.1million;

• achievedTier3statusforworkers’compensationandrehabilitationunderourselfinsurancelicenceinJune2008,reflectingourexcellentperformanceinrehabilitationandclaimsmanagement;and

• increaseof14percentinLostTimeInjuriesand19percentincreasein12monthLostTimeInjuryFrequencyRate(representsslightincreasesacrossbusinessunits).

Quiet achiever takes out 2007 Telstra Indigenous Award Case studyCongratulationsgotoPietaJohnstonfromTelstra’sNationalIndigenousDirectorateinDarwin,whowasnamedthe2007TelstraIndigenousAwardwinner.

Describedasa‘quietachiever’byhermanagerandpeers,PietaisclearlypassionateabouthersignificantworkintheIndigenouscommunityaspartofherroleatTelstra’sNationalIndigenousDirectorate.

PietahashadmanystandoutperformancesduringhertimeatTelstra.OfparticularnoteisPieta’sworkontheTelstraCommunityPhoneProgramwhichPietahasmanagedsinceJuly2006.Theprogram,whichaimstoprovideremoteIndigenouscommunitieswithadequateaccesstoTelstrapayphones,hasgivendozensofIndigenouscommunitiesthecommunicationtoolstheyneed.

AccordingtohermanagerLawrieMortimer,GeneralManageroftheIndigenousDirectorate,Pietahasdoneanoutstandingjobbringingtheprogramtoasuccessfulconclusion,despitemanychallengessuchasequipmentfailures,contractvariationsandcomplexcustomerneeds.

PietahasalsoworkedwiththemanagersofthenewZephyrandArafuraCallCentresinDarwintoimproverecruitmentandretentionofIndigenousemployees.Pietahasbeeninstrumentalinarrangingcross-culturalcommunicationtrainingforthemanagementteamsinthesecentres,andhasgoneoutofherwaytomentoranumberofnewIndigenouscallcentretrainees.

PietaJohnstonwithTelstraGroupManagingDirectors,GeoffBooth,JustinMilne,KateMcKenzieandPhilBurgess.

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3. Employees matter

44

45

LostTimeInjuries(LTI)versusLostTimeInjuryFrequencyRate(LTIFR)

Lost Time Injuries (LTI) versus Lost Time Injury Frequency Rate (LTIFR)

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LTI:LostTimeInjurywhereatleastonefullshiftordaylostfromwork.LTIFR:NumberofLostTimeInjuriespermillionhoursworked(asof30June)NB:Datafor02/03differenttopreviouslypublishedasitincludesNetworkConstruction.

3. Employees matter

Auditresults–LostTimeInjuries(LTIs)&LostTimeInjuryFrequencyRate(LTIFR)

YearPercentage of effective audit results

No of LTIs (and % improvement from previous financial year)

LTIFR (12mm) (and % improvement from previous financial year)

2007/08 71% 132(-14%) 2.54(-19%)

2006/07 88% 116(26%) 2.14(21%)

2005/06 86% 157(21%) 2.7(16%)

2004/05 74% 199(25%) 3.2(27%)

2003/04 62% 265(26%) 4.4(19%)

LTI:LostTimeInjury(atleastonefullshiftordaylost)LTIFR:NumberofLostTimeInjuriespermillionhoursworked(asof30June)

ThedropinHS&Eauditsscoreswereexpectedfollowingtheimplementationofanewriskbasedscoringmethodologyduring2007/08.

Thereisagrowingunderstandingamongsafetyprofessionalsofthelimitationsoflosttimeinjurynumbersandratesasanindicatorofsafetyperformance,especiallywhereratesarealreadyverylow.Inordertopresentamorebalancedscorecardofsafetyperformanceinfutureyears,Telstrawillreportinjurydurationratesandcompensationnumbersandrates,aswellaslosttimeinjurydata.

Health and wellbeingEmployeeswhoarementallyandphysicallyhealthyaremorelikelytobeengaged,committedandproductiveinallaspectsoflife.Telstra’sHealth&Wellbeingstrategyprovidesacomprehensiveframeworkforeffectiveinvestmentinhealthpromotionandpreventionactivitiesatalllevelsofthebusiness.Itaimstoengenderreal,longtermbehaviouralandlifestylechanges.Our2008-2011Health&WellbeingStrategywaslaunchedinAugust2008.

InJanuary2008,TelstraappointedanewHealthandWellbeingteamtofocusonpsychologicalhealth,physicalhealthpromotionandoccupationalhealthprogramsforTelstraemployees.Theteamisadoptingaholisticapproachthatincludesamusculoskeletalstrategy,amentalhealthandresiliencestrategy,occupationalhealthandhealthpromotionstrategy,andaimstoincreaseproductivity,reduceabsenteeism,andcreateaworkplaceofchoice.

In2007/08TelstrapromotedMentalHealthWeekwithfoyerdisplays,intranetnewsarticlesandactivities.Thisextensivepromotionledtoathree-foldincreaseintheaccessofonlinementalhealthandresilienceresources.Anewresource,Men’sResilienceeBook,wasalsoreleasedthisyearaspartofamen’swellbeingpromotion.

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Telstra’sresilienceandmentalhealthprogramshavebeenrecognisedbyexternalbodies,andthisyearusedbytheAustralianGovernmentDepartmentofDefenceandreferencedbytheMentalHealthCouncilofAustralia.

AchievementsinTelstra’smentalhealthandresilienceprogramsin2007/08include:

• almost380employeesattendedthetwohourResilienceworkshops;

• over300managersattendedthefourhourCreatingaMentallyHealthyWorkplaceworkshops;

• over1,300employeesattendedmodulethreeoftheFrontlineLeadershipprogram,whichintroducesTelstra’sresilienceprogramandprovidestheResilience–EnergisingLifebookasaresource;and

• thenewly-createdResilienceintranetsiterecordedover9,500hits.

Feedbackfromparticipantsofthetwo-hourresilienceworkshopsindicatesthefollowingwellbeingoutcomes:

• improvedeffectivenessinworkingwithothers(46percent);

• improvedwork-lifebalance(49percent);

• moreenergy(36percent);

• improvedconcentration(37percent);and

• workingtothebestoftheirability(38percent).

TelstracontinuestoprovidetheEmployeeAssistanceProgramtodeliverprofessionalcounsellingandadvisoryservicesviaanindependentcompanystaffedbyqualifiedpsychologistsandsocialworkers.TheservicesarefullyfundedbyTelstra,arefreeofchargetoTelstraemployeesandtheirfamilies,andareavailable24hoursaday,sevendaysaweek.

Telstra’sEmployeeAssistanceProgramalsoincludesmanagerAssist®,anadvisoryservicethatassistsmanagersandteamleadersinmanagingarangeofworkplacesituations.Inaddition,eapdirect™,whichwasintroducedin2007/08,providesTelstraemployeesaccesstolifecoachesviatheinternet.Thesiteprovidesself-assessmenttools,informationonarangeoftopicsandtheabilitytocontactaprofessionallifecoachviaasecureemailsystem.eapdirect™canhelpaddressarangeofissues,suchasfamily,emotionalwellbeing,work-lifeflexibility,relationship,andpeoplemanagement.

WealsoencourageemployeefitnessbyparticipatinginanumberofcorporatechallengesincludingtheGlobalCorporateChallenge,FoxtelLap,andRidetoWorkDay.In2007TelstrawastheTravelSmartWorkplaceChallengewinnerwiththelargestnumberofregisteredRidetoWorkDayparticipantsinAustralia.

Thereisagrowingunderstandingamongsafetyprofessionalsofthelimitationsoflosttimeinjurynumbersandratesasanindicatorofsafetyperformance,especiallywhereratesarealreadyverylow.Inordertopresentamorebalancedscorecardofsafetyperformanceinfutureyears,Telstrawillreportinjurydurationratesandcompensationnumbersandrates,aswellaslosttimeinjurydata.

3. Employees matters

Telstra’sHealth&Wellbeingstrategypromotesreal,longtermbehaviouralandlifestylechange

Mental illness demystified Case studyAnthonyWall,TacticalWorkflowPlanningManagerwithDeliveryManagement,TelstraServicesinBrisbanehasseenallthemanagersinhisworkareacompletethetwo-hourresilienceworkshopandbelievesitoffersplentyofpositivebenefits.

“Weallknowhowtodealwithslips,tripsandfalls–thephysicalsideofhealthandsafety–butpeopletendtobelessawareofhowtobuildresilience,anddealeffectivelywiththedaytodaychallengesthatlifepresents,”Anthonysaid.

“Theresilienceworkshophasbeengreat.Peoplehavelearnttobemoreself-aware.Theynowunderstandthetypesofstressorsthataffectthem,andthedifferentcopingmechanismstheycanusetostayontopofthings.We’rerollingouttheworkshoptoallmembersofourteamasakeycomponentofDeliveryManagement’shealthandsafetystrategy.”

HisviewsofTelstra’smentalhealthworkshopsareechoedbyBobBeresford,Director,ServiceDeliverySouth-West,TelstraServicesinVictoria.Over50teammanagersinhisareahavecompletedtheMentalHealthWorkshopforManagers.“Weallknowwhattodoifateammemberhasabrokenleg,butwhatdoyoudoifyoususpectsomeoneisstrugglingwithanxietyordepression?”Bobasked.

“Theworkshopreallyhelpeddemystifymentalillnessandopenedthetopicupfordiscussionamongmanagers.Depressionandanxietycanstrikeanybody,andtheworkshophelpedusunderstandwhatitmeansforthepersoninvolved,andwhatresourcesareavailabletohelpmanagerssupportemployeesthroughit.It’sgreatthatasanemployer,Telstrarecognisesmentalhealthissuescanaffectourpeople,andprovidesresourcestohelpdealwithit.”

Mentalhealthweekposter.

Planned actions for 2008/09 • Increasetheproportionofwomeninmiddleandsenior

managementto30percent.

• IncreaseIndigenousemploymentopportunitiesby25percentbytheendDecember2009aspartofTelstra’sIndigenousActionPlan2008-11.

• Maintainthehighest(ComcareTier3)ratingacrossallHealth,SafetyandEnvironmentcategories.

• Achieveaminimumof10percentemployeeparticipationinanewonlineHealthRiskAppraisalbyAugust2009toimproveemployeeunderstandingofhealthriskfactors.

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4Customers

matter

Our vision is to know our customers and meet their needs better than anyone else.David Moffatt, Group Managing Director, Consumer Marketing and Channels

ServingtheneedsofourcustomersisafundamentalcorporateresponsibilityprincipleatTelstra.Wearetransformingourcustomers’experiencebytransformingTelstrafromaproduct-basedcompanytoanintegrated,fullyconvergedmedia-commscompany,centredonthecustomer.

Understandingthatsatisfiedcustomersarecoretoourbusinesssuccess,TelstrahasundertakenthemostcomprehensivemarketresearchinAustraliancorporatehistory.SinceJune2006wehaveinterviewedover900,000Australiansandsegmentedthepopulationonthebasisoftheirpreferences.Asaresult,wehaveadoptedaMarketBasedManagementapproachandareorganisedbycustomersegmentsratherthanbyproducts.Thismeansthatweunderstandwhatcustomerswantfromtheirmedia-commsexperienceandcananticipatetheirneeds.Itmeanswecandifferentiateourproducts,servicesandpricesformarketsegments,anditsignalsashiftfroma‘onesizefitsall’approachforourcustomers,toasetofcustomerneeds-basedsolutions.

Telstraiscommittedtoprovidingamoretargetedandpersonalisedexperienceforourcustomers,tomakeiteasierforthemtosee,interactwith,useandgetadviceonourproductsandservices.Wearereinventingourretailstores,openingfivenewstate-of-the-artinteractivetelecommunicationsretailoutletsin2007/08.CalledT[life]™,thesestoresarechangingthefaceofretailing.ThisyearwealsolaunchedtheTelstraMentorservice,whichsendsanexpertadvisorouttocustomerstoprovideone-on-oneassistancetohelpthembetteraccessandusethefullrangeoftheirmobilephonefeatures.

April2008wasanimportantmilestoneinTelstra’shistory.AfteralmostnineyearsofservicetomillionsofAustralianswecloseddowntheoldCDMAmobilephonenetwork,providingourmoreadvanced,thirdgenerationmobiletechnology–Telstra’sNextG™network–asasuperioralternative.Telstraspentovertwoyearspreparingfortheclosure,alwaysensuringcustomerswerewellinformedofourplans.CDMAcustomerswereindividuallycontactedbyphone,letterandSMSmessagestoremindthemhowtomigratetothenewmobilenetwork.

Significanteffortswerealsomadethisyeartoensuretheaccessibilityandaffordabilityofourservicesforeveryone.AtTelstra,werecognisethediversityofourcustomersandthesignificantcontributionthatcommunicationsservicesmaketopeople’slivesandtocommunitywellbeing.

In2007/08,Telstraassistedmorethanonemillionlow-incomecustomerstoconnectormaintaintheircommunicationsservices.Thetotalbenefitprovidedwasinexcessof$200million.InAugust2007welaunchedTelstraConnectedSeniors®,whichwillprovide$3millionofgrantfundingtocommunitygroupsandorganisationsoverathreeyearperiodtohelpolderAustralianslearntousemobileandinternettechnology.Wemaintainourlong-standingcommitmenttomakeourservicesaccessibletocustomerswithadisability,andcontinuetofocusontheneedsofourcustomerslivingoutsidethemajormetropolitancitiesthroughTelstraCountryWide®.

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4. Customers matter

TelstraischangingthewaypeopleliveandworkinAustralia.Wearehelpingcustomerstoshareexperiencesinreal-time,savingtraveltimeandreducingfuelexpenses,freeingthemfromtheirdesks,looseningthemfromtheirlivingroomTVs,andunifyingtheirfixedandwirelesscommunications.Weareworkingtogetherwithourcustomerstofindnewwaystoimprovetheirbusinessesandtosupporttheirindividuallifestylechoices.Telstraisensuringthatcustomersarecentraltoeverythingwedo.

Enhancing our customers’ experienceAtTelstra,weknowthatsatisfiedcustomersarefundamentaltobusinesssuccess.Wearecommittedtoknowingourcustomersandmeetingtheirtelecommunicationneedsbetterthananyoneelse.Weaimtoprovideeachcustomerwithapersonalised,seamlessexperiencethatmakesiteasierforthemtomanagetheirlives.ServingtheneedsofourcustomersisafundamentalcorporateresponsibilityprincipleatTelstra.

Customer service commitmentsAstheuniversalserviceprovider,TelstrahastheresponsibilityofensuringthatallpeopleinAustraliahavereasonableaccesstostandardtelephoneservicesandpayphones,andtoprovidepriorityconnectionsandrepairstothoseeligiblecustomerswithlifethreateningmedicalconditions.Telstra’sUniversalServiceObligation(USO)StandardMarketingPlanandPriorityAssistanceforIndividualsPolicysetouthowTelstrahascommittedtofulfiltheseresponsibilities.

ThelegislatedCustomerServiceGuaranteeandtheTelstraMobileCustomerServiceCommitment,commitTelstratoprovidingaguaranteedlevelofserviceforstandardtelephoneservicesandmobileservices.

TelstrameasuresitsActivationandAssurancecommitmentsandperformanceacrossabroadrangeofproductssuchasADSL/ADSL2+,EnhancedServices/SpecialServicesproductrange(morethansimplevoicetelephones).

Ourdatashowsthatin2007/08wemetthedateandtimeweagreedwithourcustomersthan95percentofthetime,regardlessofwheretheylive.

FulldetailsaboutTelstra’scustomerservicecommitmentscanbefoundatwww.telstra.com.au/abouttelstra/commitments

ResidentialcustomersTelstra’sCustomerServiceChartersetsouthowweproposetomeetourcommitmentstoourresidentialcustomersandfulfilourlegalandself-regulatoryobligations.Ourbasiccommitmentsinclude:

• helpingcustomerstocontactusinthewaytheyprefer;

• providinginformationaboutourproductsandservicestohelpthemmakeinformedpurchasedecisions;

• providinginformationaboutthesafetyofourproducts;

• protectingpersonalinformation;

• providingbillsthatareaccurateandeasytounderstand;and

• dealingwithconcernsorcomplaintspromptly,fairlyandcompletely.

EnterpriseandGovernmentcustomersWearealsocommittedtobecomingworld-classinprovidingservicestoourenterpriseandgovernmentcustomers.ToachievethisweareguidedbytheTelstraServiceStandardswhichholdusaccountableto:completeinstallationsaspromised;restorenetworkstoourpublishedservicelevels;resolveanybillingenquiriesonthesameday;resolvealldisputeswithinfive

workingdays;completeallbillingworkrequestswithinfivedays;andassignasinglepersontomanagecustomerrelationshipswithTelstra.

InanAustralianfirst,thisyeartheTelstraEnterpriseandGovernmentCustomerCaregroupwasawardedcertificationtotheInternationalCustomerServiceStandard.ThisisthefirsttimeadivisionofamajortelecommunicationscarrierhasreceivedaccreditationfromtheCustomerServiceInstituteofAustralia(CSIA),Australia’speakcustomerserviceorganisation.

TheInternationalCustomerServiceStandard(ICSS)isaninternationallyrecognisedtooltoreviewcustomerservicequalityandincludesdetailedscrutinyandauditing.Togaintheaccreditation,CustomerCarehadtoprovideevidenceaddressingthe29ICSSattributesandundergoaseriesofdetailedsitevisitsbyCSIAauditors.Thecertificationdemonstratesthatourorganisationhasbothapassionforcustomerexcellenceandtheprocessestodeliver.

FulldetailsaboutTelstraEnterpriseandGovernmentservicestandardscanbefoundatwww.telstraenterprise.com/abouttelstra/Pages/ServiceStandards.aspx

Informing our customersTelstranolongerhasa‘onesizefitsall’approachtocustomers.Wearenowcommittedtoprovidingamoretargetedandpersonalisedexperience,toinformourcustomersaboutproductfeaturesandapplicationsandtohelpmakeiteasyforourcustomerstodowhattheywant,whentheywant.Withthisinmind,wehaveintroducedsomeinnovativeapproachestobuildingcustomerawareness.

Werecognisethesignificantcontributionthatcommunicationsservicesmaketopeople’slives

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4. Customers matter

T[life]™retailstoresInJune2008,Telstraopenedthelargeststate-of-the-artinteractivetelecommunicationsstoreinAustralia,T[life]™,followingonfromthesuccessofT[life]™Sydney.TheMelbournestorehastwolevelsandprovides:

• adedicatedareaforbusinesscustomerscalled[my]business;

• freeone-on-oneexpertadviceat[my]place;

• [my]networkedhomewherecustomerscanseeforthemselveshowtobetterconnecttheirlifeathomeandonthemove;

• aninteractivezonetoexploreandplaywithover100liveandworkingdevices;

• thelatesttechnologywherecustomerscaninteractwithfutureproducts;

• aTelePresencemeetingroomforface-to-facestate-of-the-artvideoconferencing;

• freedailytraininganddemonstrationsinthestore’s50seatauditorium;and

• one-on-onesessionswithmediaexpertsthatcanbebookedatatimeconvenienttocustomers.

T[life]™storesareavibrantpublicexpressionofourphilosophythatthecustomerisatthecentreofeverythingwedo.WecurrentlyhavefiveT[life]™storesacrossAustralia.

TelstraMentorPeoplenowhaveaccesstomorethingsontheirNextG™mobilesthaneverbefore,includingemail,internetbrowsingandvideocalls.Telstraunderstandsthatsomecustomersneedhelptousethefullrangeoffeaturesavailableonthelatesthandsets.

LaunchedinJune2008,theTelstraMentorservicesendsanexpertadvisortocustomerstolistentowhattheyneedandprovideone-on-oneassistancetoimproveaccesstoanduseofthesefeatures.Customerscanhavetheirdevicestailoredtotheirindividualneedsandareshownhowtobemoreefficientsotheycanoperatetheirbusinessbetterwhileonthemove.

Withbusinessincreasinglyturningtomobiletechnologiesforemail,internetbrowsing,videoconferencingandbusinessapplications,smallandmediumenterpriseswillbenefitgreatlyfromthisservice,particularlyhighusecustomersaccessingmobileandPDAfeatures.

TelstraispartneringexclusivelywithMobileMentortodelivertheAustralianfirstserviceforqualifyingcustomers.InitiallyavailabletocustomersinSydneywhousesophisticateddevicesfortheirpersonal,workorbusinessneeds,thefreeTelstraMentorservice,willberolledouttoothercitiesinthemonthsahead.

TelstraExperienceCentreLocatedat400GeorgeStreetinSydney,theTelstraExperienceCentreisastate-of-the-artfacilityforTelstra’scustomers.Consumergroups,smallbusiness,largebusiness,enterpriseandgovernmentcustomerscanexperienceTelstra’slatestproductsandservicesinaliveandimmersiveenvironment.TheTelstraExperienceCentreprovidestheopportunityforbusinessandenterprisecustomerstointeractwithTelstra’shealthandeducationapplications,home,entertainmentandbusinesssolutions,anddiscoverthemanywaystheycanuseTelstraproductstomaketheirlivessimplerandeasier.

CommunityAdvocacyProgramTheTelstraCommunityAdvocacyProgramisauniqueopportunityforstafftomaximisecustomerawarenessandunderstandingofTelstra’sNextG™servicesandotherproductsbyvisitinggroupsintheirlocalcommunities.In2007/08Telstrastaffcompletedover1,134townvisits,productdemonstrations,mobiletowerlaunchesandbusinessforumsinmetro,regionalandrurallocationsacrossAustralia.Thisincludedover40fielddays,350ChamberofCommerceandbusinesspresentations,41innovationexposandover540localevents.Theprogramhelpstobuildrelationshipswithourcustomersandthecommunityandtogaininsightintocommunityneedsandexpectations.ItisanimportantmechanismforTelstratobeatrulyacustomer-centricorganisation.

Customer safety and securityAtTelstrawearecommittedtoensuringthatallcustomersarewellinformedandequippedwiththeknowledgetoutiliseourproductsandservicessafelyandresponsibly.

Telstranolongerhasa‘onesizefitsall’approachtocustomers

MobilesafetyWehavearangeofTelstrainitiativestomakeusingmobilephonessaferandeasier.Fulldetailsabouteachofthesecanbefoundatwww.telstra.com.au/abouttelstra/advice/mobile

Mobile hoaxes –Telstraisalwaysonthelookoutforthelatestmobilescamsandhoaxesaffectingourcustomers.Weprovideadviceonwhattowatchoutforandwhattoignoreandup-to-dateinformationaboutthemoreprevalenthoaxes.

Driver safety –Telstraprovidesinformationtocustomersaboutusingtheirmobilephonesassafelyaspossibleandreinforcesroadrulesformobilephoneusers.

Lost or stolen phones –TelstraprovidesinformationaboutnewtechnologythatpreventsalostorstolenhandsetfrombeingusedonTelstra’sGSMandNextG™networks.

SMS spamming –Telstraprovidesinformationonwhatyoucandotoavoidreceivingunsolicitedmessagesonyourmobile.

Mobile phone etiquette –Conversationsthatwerepreviouslyprivatearenowoftenheldwithinearshotofothers.Telstra’sguidetomobilephoneetiquetteprovidesusefultipsonhowtousemobilephonesinthemostappropriateway.

Mobile phones and hearing aids –Telstraprovidesinformationonthingsyouneedtoknowifyouareoneofover450,000Australianswhowearsahearingaid.

Recycling –TelstraisanenthusiasticparticipantinMobileMuster,theofficialrecyclingprogramforthemobileindustry.Weencourageourcustomerstoreturnoldmobilehandsets,batteriesandaccessoriestoanyTelstraShopforrecycling.

Electromagnetic energy –Telstrasupportsandcontributestoresearchintothesafetyofelectromagneticenergyfrommobilephonesandbasestations.WeareguidedbytheWorldHealthOrganisationregardingsafety.

Next G™ rings true for hearing aid wearers Case studyTheCDMAmobilenetworkwaspreferredbymanyofthe450,000Australianswhowearahearingaidorhaveacochlearimplantforinterference-freemobilecommunicationAustralia-wide.WiththeclosureofourCDMAnetworkinApril2008,weneededtoensurecontinuingaccesstomobilephonesforthiscustomergroup.

In2006/07theNationalAcousticLaboratoriesreportedontestsconductedforTelstraontheNextG™networkandfoundthatthenewnetworkwouldprovideanevenbetterexperienceforpeoplewhorelyonhearingaids.

Furthertothesetests,andinresponsetocustomerandconsumerrepresentations,Telstraconductedaseriesofuser-testswitharangeofNextG™mobilehandsetsduring2007/08.WeundertookthesetestsincooperationwithDeafnessForumandBetterHearingAustraliamemberswithhearingaidsandcochlearimplants.Wealsotestedthehandsetswithassociatedassistivelisteningdevices.Theuser-testresultsclearlyindicatedthatmanyTelstraNextG™handsetsworkwellwithhearingaidsandcochlearimplantsinbothMicrophone(M)andTelecoil(T)settings.Someusersratedtheirexperienceasverygoodtoexcellentinbothmodes,includingwiththeassistivelisteningdevices.

AlistofNextG™handsetssuitableforusebyAustralianswithhearingaidsandcochlearimplantsinmetropolitanandregionallocationswasdevelopedfromthesetests.Thiswasprovidedtoconsumerandcommunitygroupsfortheirmembers,andtoTelstraemployeeswithcustomercontact,toassistinchoosingamobilehandset.Telstra’sDisabilityForumwasbriefedontheusertestsattheMarch2008Forum.

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52

4. Customers matter

InternetsafetyTheinternetprovidesanamazingwindowontheworld,andsecurityissuesshouldn’tstoppeoplefromenjoyingtheview.BigPondSecurityCentreprovidesinformationandservicesforcustomerstohelpprotecttheircomputerandtheirfamilyontheinternet.

BigPondSecurityCentrehelpscustomersbuildanunderstandingofthepotentialsecurityrisks,includingnon-genuinewebsites,hoaxemails,hackers,spam,wormsandotherviruses,Trojansandspyware.BigPondalsoprovidescomprehensiveadviceonthesecuritypracticescustomersshouldfollowtoreducetheriskoffallingpreytosecuritythreats.Informationaboutfirewallandanti-virussoftware,protectingpersonaldetails,restrictingunauthoriseduseofcomputers,passwordsandcontentfiltersisprovidedontheBigPondwebsite.

Inaddition,BigPondsupportsparentstoensuretheirchildrenhavesafeandpositiveonlineexperiences,withcomprehensiveinformationincludingtipsforparents,abookletcalledHelp keep your kids safe online,andlinkstoarangeofsafeplacesforchildrentogoontheinternet.

Formoreinformationseewww.bigpond.com/cybersafety

Customer privacyInaconstantlychangingtechnologicalenvironmentourcustomersenjoyusingthelatesttechnology,butwanttomaintaincontroloverthepersonalinformationgeneratedasaby-productofthedigitaleconomy.Theywantassurancethattheirprivacyandpersonalinformationareprotectedandsecure.

Thelegislativeresponseistodevelopadditionalregulation,suchasSpamlegislationandthe“DoNotCall”register,toaddressthepotentialimpactonpersonalprivacyofnewtechnologies.Whilethereismeritintheselaws,atTelstracompliancewiththeprivacyrelatedlegislationisourminimumstandard.Goingbeyonditslegislativeobligations,Telstraseekstobeinnovativeandtodeliverthegreaterbenefitsofemergingtechnologiestoourcustomers,whileallowingthemtomaintainsufficientcontroltoensuretheirprivacyisprotected.

Telstra’sPrivacyStatementmeetsourlegalobligationsandexpressesthecommitmentthatTelstrahasgiventoallitscustomers.Insupportofthiscommitment:Telstraensuresthat:

• aChiefPrivacyOfficerhasoverallresponsibilityforourapproachtoprivacyandprivacycomplianceandliaisonwiththeGovernment’sOfficeofthePrivacyCommissioner;

• thereisanetworkofprivacymanagersacrossthecompanytoadvisethebusinessandsupportourcustomersonprivacymatters;

• staffreceiveprivacyawarenessinstructionwhentheyareinductedintothecompanyandeverytwoyearsthereafter;

• ITsystemsandbusinessprocessesarebuiltwithappropriatecontrolstoensurethataccesstopersonalinformationisappropriatelyrestrictedandmonitored;

• adedicatedprivacycallcentre(1800 039 058)isavailabletodealwithmembersofthepublic;

• alloursuppliersandbusinesspartners,bothinAustraliaandoverseas,arerequiredtocomplywithAustralianprivacylaw;

• allproductsandservicesareassessedforprivacyimpact;and

• ourprivacycomplianceprogramisreviewedandauditedannuallybyindependentexternalauditorswhoreporttheirfindingstotheTelstraBoard.

Thenumberofprivacycomplaintsand/orincidentsreceivedbyTelstrathatdealwithissuesconcerningmarketing,accesstoinformation,accuracyofdataanddisclosureofinformation,isrelativelystable.Thisisanexcellentoutcomeinanenvironmentwheretherearenewandpervasivetechnologiesconstantlybeingofferedtoconsumers,wheremarketingismoredirected,andwhereconsumersareincreasinglyconcernedabouttheirprivacy.

UsingTelecommunicationsIndustryOmbudsmandata,thetelecommunicationsindustryprivacycomplaintsagainstTelstraalsoremainrelativelystable,andcontinuetorepresentadisproportionatelylowpercentageofindustryprivacyissues.

Allprivacycomplaintsand/orincidentsareappropriatelyaddressedandmanagedtoresolutionwithinTelstrasothatinthelastyearnoprivacycomplaintsorincidentswereescalatedtoalevelthatrequiredjudicialdecision.

FormoreinformationseePrivacyatTelstraatwww.telstra.com.au/privacy/index.htm

Ensuring access for everyoneTelstrarecognisesthediversityofourcustomersandthesignificantcontributionthatcommunicationsservicesmaketopeople’slivesandtocommunitywellbeing.Telstramaximisesthevalueofitstelecommunicationsnetworks,productsandservicestoensureaccessforeveryone.Weactivelyimprovetheaccessibilityandaffordabilityofourservicesbyengagingwithrelevantcommunitystakeholdersandsupportingalargenumberofcommunity-businesspartnershipsthatbenefitoveronemillionAustralianseverymonth.

People on low incomesTelstra’sAccessforEveryonepackageisguidedbytheindependentLowIncomeMeasuresAssessmentCommittee(LIMAC),whichconsistsprimarilyofcommunitywelfareorganisationmembers.LIMACmonitorstheprograms,providesfeedbackontheireffectiveness,commissionsmarketresearch,andreportsannuallytotheMinisterforBroadband,CommunicationsandtheDigitalEconomy.

Resultsofrecentresearchintolow-incometelecommunicationsinAustralia,commissionedbyLIMACin2007,indicatethataffordabilityhasbeengenerallyimprovingoveralongperiodoftime,resultinginveryhightelephonetake-uprates(around98percent).However,forpeoplewhoareinfinancialorothercrisis,whoseektheassistanceofcommunitywelfareagencies,thereisasignificantlackofaccesstoatelephone(around20percent).

“Oneofourtechnicalservicesmanagerswashelpingtosetupremoteaccessataclient’spremises,”Stevesaid.

“HepluggedhisNextG™mobilephoneintohislaptop,testedtheconnectionandthenusedtheservicetodemonstrateandtrainourclient’sstaff.

“TheNextG™networkhelpsusdeliveramorecompleteserviceandwillsubstantiallyenhancetheefficiencyandeffectivenessofourmobilehealthcareteams.”

Healthier communities with HumeNET and next generation networks Case studyVictorianruralhealthalliance,HumeNET,isusingtheNextG™networktohelpitscommunity-basedhealthcareclientsstayintouchandonlinewherevertheir‘house-calls’takethem.

HumeNETprovidesinformationcommunicationtechnology(ICT)forpubliclyfundedhealthcareorganisationsspecialisinginacutecare,residentialagedcare,mentalhealth,alliedhealthandcommunityhealth.

HumeNETChiefInformationOfficer,SteveBowmaker,saidmorethan6,000healthagencystaffworkingin50sitesacrossnorth-eastVictoriauseHumeNET–whichisprovidedontheTelstraNextIP™network–toaccesspatientcareinformationandotheronlineservices.

However,morethan600mobilehealthcareworkerswhovisitpeopleintheirhomesorworkfromsmallcommunityfacilitieshavepreviouslybeenunabletoaccessHumeNETcorporatenetworkwhenawayfromtheiroffice.

“Ourchallengewastoprovidethesepeoplewithareliable,secureandhigh-speedconnectionservice,sotheycanaccessbusinessandclinicaldata,andschedule,reviewandupdateclientfileswhenworkingawayfromtheoffice,”Stevesaid.

“WiththeNextG™networkwecannowofferourmobilehealthcareteamsahigh-speed,secureconnectionwithouthavingtoheavilymodifytheirapplicationtoolsets.”

HumeNETstaffuseTelstraTurboCards™andmobilephonestoaccessHumeNETserverswhenworkingfromclient’spremises,betweenappointmentsorafterhoursduringemergencysituations.

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4. Customers matter

Ourperformancein2007/08includes:

• assistedmorethanonemillionlow-incomecustomerstoconnectormaintaintheircommunicationsservices.Thetotalbenefitprovidedexceeded$200million.ThiswasspreadacrossprogramssuchasBillAssistance,PhonecardAssistance,PensionerDiscount,InContact®,HomeLine™Budget,andMessageBox;

• increasedthenumberofcommunityagencyoutletpartnerstoaround4,000from3,600inthepreviousyear.TelstrareliesoncommunitypartnersacrossAustraliatodelivertheAccessforEveryoneprograms;and

• Telstrawasawardedthe2007CorporateCommunityPartnershipAwardbytheCountryAwarenessNetworkVictoria.ThisawardrecognisedourexceptionalcommitmenttoVictoria’sruralandregionalcommunitiesthroughoursupportandassistancetoconsumersandclientsaffectedbyHIV/AIDSorHepatitisC.

Formoreinformationseewww.telstra.com.au/accessforeveryone

People with disabilityTelstra’scorporatedisabilitypolicyisbasedonthevaluesofserviceandrespectfortheindividual.ThepolicyrelatestoallTelstraproducts,servicesandfacilities.Itpromotescompliancewith,andanunderstandingamongemployeesof,theDisabilityDiscriminationAct(1992)andrelatedprovisionsintelecommunicationslegislation.

Insupportofitsdisabilitypolicy,fromtimetotimeTelstralodgesadisabilityactionplanwiththeHumanRightsandEqualOpportunityCommission.Theplanestablishes,monitorsandreviewstheperformanceofTelstraprocessestoensureareasofpotentialdiscriminationareidentifiedandminimisedoreliminated.ItisdevelopedinconsultationwithpeakdisabilityconsumergroupsthatmeetregularlyastheTelstraDisabilityForum.Telstrareviewsthedisabilityactionplanperformanceandpublishestheresults.

Forover25years,Telstra’sDisabilityEquipmentProgram(DEP)hasprovidedarangeofadditionaltelephoneequipmenttoeligiblecustomerswithadisability,atnoextracost,sotheycanaccessastandardtelephoneservice.In2007/08,Telstrasuppliedover12,000additionalpiecesofcustomerequipmentincludingphoneswithlargebuttons,incomingandoutgoingvolumecontrol,audibleandvisualalerts,andteletypewriters.

ThisyearTelstraalsosimplifieditslegacypaper-basedDEPapplicationprocesstoimprovetheoverallexperienceforthecustomer.Thisreducedthefulfilmenttimefrombetweenthreetosixweekstobetweentwotothreedays.Mosteligiblecustomerscannowringourdisabilityenquiryhotlineandaconsultantwillimmediatelyactivateanorderfortheequipmenttheyneed,ratherthanfillinginanapplicationform,havingitsignedbyaqualifiedprofessionalandsubmittingtheformtoTelstraforconsiderationandprocessing.

ForfurtherinformationaboutTelstra’sdisabilityservices,visitwww.telstra.com.au/disability

Rural and regional customersTelstraCountryWideisthelocalfaceofTelstrainregional,ruralandremoteareasofAustralia.TelstraisanintegralpartofcountryAustralia,livingandworkinginthecommunitiesitserves,participatinginlocalevents,supportinglocalinitiativesandhelpingintimesofdistressanddisaster.

Asanationalcarrierandlong-termpartnertoregionalAustralia,Telstraunderstandsthevitalrolethattelecommunicationsplaysinkeepingthisvastcontinentconnected.

TelstraCountryWide’smissionistomeettheoftenuniquetelecommunicationsneedsofregionalAustraliawhileatthesametimecontributingtoitseconomicandsocialdevelopment.WiththerecentlaunchoftheNextG™andNextIP™networksTelstranowhastheplatformstoprovidecustomerslivingandworkinginregional,ruralandsomeremoteareas,accesstoaworldclassrangeofproducts,applicationsandcontent.

ClosureofCDMAnetworkTelstraclosedtheCDMAmobilenetworkon28April2008.PlanstoclosetheCDMAnetworkandbuildtheNextG™networkwereannouncedalmostthreeyearsearlier,inNovember2005.TheNextG™networkwaslaunchedinOctober2006andfromthattimewebeganthetaskofmigratingcustomersfromCDMAtotheNextG™network.Alargepercentageofthesecustomermigrationsoccurredin2007/08.

Telstraputinplaceanumberofcustomerserviceinitiativestohelpmakethetransitionassmoothaspossibleforcustomers.

Theseinitiativesweredesignedtoensurethatcustomersreceivedinformedandaccurateadvicewhenmakingtheirselectionofhandsetsandaccessoriesandtheychosea‘LikeforLike’handsetsothattheywouldreceivethesameorbettercoverageontheNextG™network.

The Blue Tick –InwhatTelstrabelievestobeaworldfirst,Telstrarigorouslytestedandassignedthe‘BlueTick’tothosehandsetsrecommendedforhandhelduseinruralareas.

Coverage Advocates –Telstraemployedover50newstafftoproactivelycontactcustomersthathadnotyetmovedfromCDMAtoprovidethemwithadviceonwhattypeofhandsetandaccessoriesbestmettheircoverageneeds.

Retail Accreditation Program –InanAustralianindustryfirst,Telstraintroducedanaccreditationprogramacrossitsretailoutlets(Telstraowned,licensedanddealers)andprovidedahandsetrecommendationguideeachmonthtoensurethatretailstaffhadthemostuptodateinformationtoprovidecustomersonhandsets,accessoriesandcoverage.

Mobile Health Check –Telstramonitorednetworkstatisticsandcontactedcustomerswhowereexperiencinghigherthanaveragedropoutstoimprovetheirexperience.

1800 customer hotline –ThiswasestablishedtoassistcustomersthathadmigratedfromCDMAtotheNextG™networkandwereexperiencinghandsetrelatedissues.

Handset exchange –Telstraputinaplaceapolicythatwhereacustomer’sNextG™handsetwasnotprovidingcoverageequivalence,asalastresortandingenuinecases,Telstrawouldexchangetheirhandsetforanotheratnoadditionalcosttothecustomer.

Inaddition,anextensivecustomercommunicationprogramsaw:

• customersreceiveinexcessof10lettersandtext(SMS)messagesadvisingthemoftheclosure;

• anextensiveadvertisingcampaignonradio,TVandprint;and

• aPRcampaigntokeepcustomersupdatedwithanaverageofthreemediareleasesissuedeachweekinthesixmonthsleadinguptoclosure.

Connecting Wadeye Case studyInAugust2007TelstraundertookamajorprojecttoimprovetelecommunicationsservicestotheNorthernTerritorycommunityofWadeye,located400kmsouthwestofDarwin.

WadeyeistheNT’slargestremoteIndigenouscommunitywithapopulationofmorethan3,000.ItisisolatedbyroadforfourtofivemonthseachwetseasonwhentheDalyRiverfloodsandmakestheroadcrossingimpassable.Thecommunitypreviouslyreliedonsatellitetelecommunicationsservices.Therewasnomobilecoverage,internetspeedswereslowandthesystemwaspronetooutagesaswetseasonthunderstormfrontsrolledacrossthecoast.

Allofthischangedwiththecommissioningofanopticalfibretransmissionlink,connectingWadeyeandthenearbycommunitiesofPalumpaandPeppimenartiwiththenationaltelecommunicationsnetworkatacostofaround$6million.Theprojectreceived$2millioninFederalGovernmentfundingunderthesponsorshipoftheLocalGovernmentAssociationoftheNT.TelstramettheremainderofthecostsandfullyfundedtheinstallationoftheNextG™basestationatWadeye.

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4. Customers matter

Indigenous communitiesTelstra’sNationalIndigenousDirectoratecontinuestoworkwithgovernmentsandstakeholdergroupstodeliverimprovedtelecommunicationsservicestoremoteIndigenouscommunities.

AmajorconstructionprojecttoservicecommunitiesintheNgaanyatjarraLandsinWesternAustraliawascompletedinFebruary2008intheareawestofSurveyorGeneral’sCornerwherethebordersofSA,WAandNTmeet.AnopticalfibrecablewasinstalledfromBlackstonetoconnectthecommunitiesofWingellina,Jameson,Warburton,WannanandWarakurna.ThisreplacedtheexistingnarrowbandradiosystemandenabledconnectionofADSLbroadbandineachofthecommunities.ThisprojectreceivedpartialFederalfundingandcontributionsfromtheGovernmentofWesternAustraliaandtheNgaanyatjarraorganisations.

Inaddition,workhascontinuedontheCommunityPhoneProgram.TelstraCommunityPhonesweredevelopedinconjunctionwiththeCentreforAppropriateTechnology(basedinAliceSprings)forconditionsfoundinremoteAustralia.CommunityPhonesarecard-only,housedinastainlesssteelcasingandveryrobust.Telstrainitiallydeployed20oftheseunitsonapilotbasis,mainlyintheAliceSpringsregion.Afurther216havebeeninstalledinremotecommunitiesintheNorthernTerritory,andthePilbaraandKimberleyregionsofWesternAustraliawiththesupportoftheAustralianGovernmentthroughtheDepartmentofBroadband,CommunicationsandtheDigitalEconomy.Thepurposeofthisarrangementistoprovidefortheurgentprovisionofcommunityphones,andpre-paidphoneproductstoremoteIndigenouscommunitiesonanas-needsbasis.In2007/8workcontinuedtoupgradeinstallationstothecurrenttechnologystandardandinsomecasestorelocateservices.

Telstra Connected Seniors®LaunchedinAugust2007,TelstraConnectedSeniors®wasdevelopedtohelpolderAustralianslearntousemobileandinternettechnology.

ThroughTelstraConnectedSeniors®,Telstraplanstoprovide$3millionofgrantfundingtocommunitygroupsandorganisationsoverthenextthreeyears.Alongwithfinancialfunding,grantrecipientshaveaccesstoeducationaltoolsandresourcesthatallowthemtoconductfunandinteractiveeducationsessionsfortheirmembers.Theseeducationprogramswillequiptheirmemberswithnewskillssuchasconnectingwithotherseniorsonline,makingvideocallsorsendingtextmessages.

Telstrabelievesthisnewgrantprogramwillbeverypopularwithseniors,asresearchshowsthateducationisoneofthetopfourissuesofinterestandconcerntothoseagedover50.In2007/08:

• over$750,000ofgrantfundingwasprovidedto110communityorganisations;

• over1,900seniorsfromclubsorcommunitygroupshavelearntmoreabouttechnologyandbeentrainedinmobile,emailorinternetuse;

• thereweremorethan2,000websitevisitspermonthtoTelstraConnectedSeniors®website(www.telstraseniors.com.au);and

• wedeveloped19workshopeducationmodulesspecificallywrittenanddesignedforTelstraConnectedSeniors®participants.

Telstraunderstandsthevitalrolethattelecommunicationsplaysinkeepingthisvastcontinentconnected

VIEW clubs of Australia Case studyOver21,000AustralianwomenbelongtoVIEWClubs,apartofTheSmithFamily,in387communitiesnationwide.VIEWmemberscontributesubstantiallytolocalcommunitycapacitybuilding,donatingtheirtimeandtalentslocally,aswellasraisingfundsfordisadvantagedchildrenandtheirfamiliesthroughTheSmithFamily’sLearningforLifeProgram.

ThankstoaTelstraConnectedSeniors®grantof$62,000,around1,000seniorAustralianwomenfrom65VIEWclubswillgainbasicinformationandcommunicationskillsusingcomputersandmobilephones.

TheTelstraConnectedSeniors®programhasenabledVIEWtodevelopskilledandconfidentvolunteertrainerswhowillcontinuethisprogrambeyond2008.AndTelstraConnectedSeniors®enablesfasterdisseminationofinformationaroundtheVIEWClubnetwork,aswellasstrongerconnectionsbetweenmembersregardlessoftheirgeographiclocation.

ThroughTelstraConnectedSeniors®,memberswillbeabletodevelopnewinterestsandabilities.Theywillbeabletousewebsiteswithconfidencetoobtaingoodsandservicestheycurrentlyhavenoaccessto.Memberswillbemoreintouchwiththeirfamilies,friendsandthecontemporaryworld.

RobinVargofromVIEWClubssaysthesupportivelearningenvironmentisagreatbenefitformembers.

“Beinghelpedbywomentheirownagereallyhelpstodispelthe‘I’mtoooldforthis’excuse.ItisverygratifyingtowitnesstheVIEWmemberswhoarrivedatasessionlookinganxious,walkoutwithasmile,”Robinsaid.

ViewClubmembersRobynMcGilvray,EvelynTalbotandMarieSouthwellimprovingtheirmobilephoneskillsinTamworth.

Planned actions for 2008/09• ExtendtheTelstraBillAssistanceProgramtocovermobile

andinternetbillstorecognisethechangingnatureofcommunicationsusageamonglow-incomeAustralians.

• Provideaweb-basedinquiryformforinformationaboutaccessiblefeaturesofNextG™mobilehandsetstoenablepeoplewithadisabilitytochoosetherightmobilehandsetfortheirneeds.

• BuildonthesuccessofourworldclassT[life]™storesbyopeningorrefreshingmorethan80T[life]™storesacrossAustralia,toprovidearetailexperiencelikenootherforourcustomers.

• DeployenhancedHSPA(HighSpeedPacketAccessPlus)asanationalsoftwareupgradetoincreasepeaknetworkdownlinkspeedsacrossournationalNextG™networkfromthecurrent14.4Mbps3to21Mbpsin2008.

• WithsupportfromtheNTGovernmentandRioTintoAlcan,Telstrawillrollout800kmsoffibretoconnectninenorthernArnhemLandIndigenouscommunitiesandthetownshipofNhulunbuytothenation’sfibreopticbackbone.

3Peaknetworkdownlinkspeed.Actualcustomerdownloadspeedswillbelessandwillvaryduetotrafficloading,distancefromthecell,

localconditions,hardware,softwareandotherfactors.

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5Environment

matters

Telstra is committed to providing good stewardship of the environment. David Quilty, incoming Group Managing Director, Public Policy & Communications

AtTelstra,responsiblestewardshipoftheenvironmentbenefitsourshareholders,ourcustomers,ouremployeesandthewidercommunity.Theefficientuseofnaturalresourcesisbothcommerciallyandenvironmentallyprudent.

Telstraoperatesinavarietyofnaturalandurbanenvironments,withournetworkinfrastructurespanningAustralia.Tomanagetheimpactofouractivitiesweaimtointegrateenvironmentalconsiderationsintoeverydaybusinessactivities.Ourenvironmentalfootprintiswidebutshallow.Whileouroperationsextendnationallyacrossallcommunities,ourimpactinanyonelocationisrelativelyminor.

AttheheartofTelstra’sapproachtoenvironmentalstewardshipisasimplenotion–efficientuseandconservationofresourcesisthemosteffectivewayforbusinesstocontributetoenvironmentalprotectionandatthesametimereduceoperatingcosts.Forthisreason,energy,waterandwastemanagementprogramsformthecentrepieceofourenvironmentalstrategy.Byreducingtheenvironmentalimpactofouroperations,weprovidebettervalueforourshareholders,reduceongoingcosts,efficientlyusepreciousresources,andbenefitthewidercommunity.

Telstrahascomealongwaysinceweinstalledourfirstsolarpanelin1974.NotonlyareweoneofAustralia’slargestusersofsolarpower,operatingover10,200solarpoweredsites,wehavecontinuedtoinvestigatethepotentialuseofinnovativerenewableenergysources.ThelatestadditioninJune2008sawahydrogenfuelcelltestfacilityinstalledatourMelbourneheadquarters.Thehydrogenfuelcell,aswellasasmallsetofsolarpanels,willbetrialledbyTelstra’sPropertyGroupduring2008,andtheirpotentialuseinTelstra’snetworkandbuildingswillbeassessed.

InSeptember2007,TelstraestablishedtheClimateChangeReviewGroupwhichiscomprisedofseniorexecutivesfromacrossthecompany.Thisgroupco-ordinatesthecompany’sclimatechangeresponse,includingtheimplicationsforTelstraoftheNationalGreenhouseandEnergyReportingSystem,andtheproposedCarbonPollutionReductionScheme.TheGroupalsohasaroletoensurethereiswiderunderstandingandrecognitionofthemanycosteffectiveenvironmentalinitiativesbeingundertakenacrossthecompany.

Theefficientuseofnaturalresourcesisbothcommerciallyandenvironmentallyprudent

WithBallaratstillonStage4waterrestrictions,we’rereallypleasedtobeabletoreducewaterconsumptioninthisway.”

BigPondOperationalSupportCentreManagerRussellDicksonsaid,“It’sbeenagreateffortbyeveryoneonsitehereinBallarat.Aswellasourgreenhousegasemissionreductions,theteamshavetakenitonthemselvestoimplementothergreeninitiativesintheirowntime,includingaPlanetArktonerrecyclingprogram,plasticandcanrecycling,movingsomepaper-basedsystemsonlineandtakingpartinCleanUpAustraliaandCleanUpOfficedays.

“We’vedrawnonresourcesavailablethroughBigPond’sVitalityprogram,andreallyappreciatedthegreatsupportwe’vehadfromseniormanagers,TelstraPropertyandtheCorporateEnvironmentGroup.I’dencourageotherTelstraworkteamstoconsiderhowafewinexpensiveandsimplestepscanhelpreducetheimpactofourworkontheenvironment.”

Greenhouse win for environmental warriors Case studyTelstraisseriousaboutitsenvironmentalperformance,andisworkingonmanyfrontsatacorporateleveltoreduceitsenvironmentalimpact.Butwealsohaveenvironmentalwarriorstakingmattersintotheirownhands.

Withjustafewsimplesteps,theteamatBigPondOperationalSupportCentreinBallarathasreducedtheirgreenhousegasemissionsandtheirlevelsofwaterconsumption.

TheBigPondCentreteamsharestheBallaratsitewithcolleaguesfromTelstra’sConsumerMarketingandChannelsgroup.Aftertheformationofanonsite‘GreenTeam’twoyearsago,environmentalmattershavebecomeahighpriorityfortheseemployees.

AccordingtoHelenVanDerVeer,BigPondBusinessSupportLead,“Oneofthemainactionswetookwastoreducegreenhousegasemissionsassociatedwithlighting.Werealisedthatouroffice’sinternallightingwasprogrammedtoworkonSundays,eventhoughthebuildingwasunoccupied.”

“ThroughTelstraProperty,wewereabletoarrangeforlightstobeturnedoffonSundays,whichsavedover10tonnesofcarbonemissionseachyear.Asacomparison,theaverageAustralianhomeemits14tonnesofcarbonperyear(includingtransport),”Helensaid.

“Ourbuildingalsohad35downlightsonthewalls,whichexistedmostlyfordecorativepurposes.Wehadmostofthesepermanentlyturnedoff,whichsavedanother10tonnesofcarbonemissionsandover$800ayearinpowercosts.

“WithgreatassistancefromourHS&Erep,SimonMarcollo,we’veinstalledadesertcubewaterlesssysteminthemen’surinals.ThiswaspartofTelstraProperty’snationalrolloutofwaterlessurinals.

BronwynFlemingandStevenDavidson–BigPondOperationalSupportGreenTeammembers.

Theseinitiatives,suchasconductingalifecycleenvironmentalassessmentofonlinebilling,establishingaPackagingInnovationGroup,andencouragingstaffparticipationthroughourGreenChallenge@Telstraprogram,areallhelpingtomanageTelstra’scarbonfootprintinaninformedandresponsibleway.Importantly,TelstraisalsoidentifyingwaysinwhichTelstra’scustomersandbusinessescanusetelecommunicationsproductsandservicestoreducetheirowngreenhousegasemissions.

Telstrahaswellestablishedsystemsandproceduresformanagingourenvironmentalrisksandourtrackrecorddemonstratesthatwemeettheregulatoryrequirementsplacedonustransparentlyandeffectively.Maintainingourhighstandardsofperformanceandreportingisnotwithoutcost.WeobserveacontinuingexpansionofenvironmentalregulationatState,TerritoryandFederalgovernmentlevels,alongwiththeirconsequentcomplianceandreportingobligations.Climatechangeisaddinganewsetofobligationsintothemix,withsomevariationinapproachbetweenjurisdictions.Ourpolicysubmissionstogovernmenthaveemphasisedthedesirabilityofstreamliningregulation,toenabletimeandcosttobefocusedonachievingimprovedoutcomesratherthanjustreportingforthesakeofit.

Engaging employeesOurcommitmenttogoodenvironmentalstewardshipcontributestoTelstra’semployeevaluepropositionbyfosteringemployeeengagementandmotivation.Basedonthisyear’semployeeengagementsurvey(84percentresponserate),78percentofemployeesbelieveTelstraisanenvironmentallyresponsiblecompany,afigureabovetheAustralianNationalNormof74percent.Telstraengageswithemployeesonenvironmentalissuestodeterminetheirconcernsandinterests,encourageanactiveroleinpublicpolicy,keepabreastofemergingissues,andtoensurethatconsiderationoftheenvironmentisintegratedateverylevelofthebusiness.

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5. Environment matters

Climate Change Review GroupTelstraformedaClimateChangeReviewGroup(CCRG)inJuly2007.Comprisedofseniorrepresentativesfrombusinessunitsacrossthecompany,thegroup’staskistodevelopandimplementclimatechangepolicyandcoordinateactivitiestoreducetogreenhousegasemissions.ThegroupalsomonitorsresourceconservationprogramsandactivitiesalreadyunderwayinTelstra,considersopportunitiesandproposalstoenhanceresourceconservation,andidentifiesbusinessunitsandindividualperformerswhoare,byvirtueoftheirday-to-dayresponsibilities,alreadymakingimportantresourceconservationdecisions.Onoccasion,expertsareengagedtoconductformalrisk-assessmentsandcostbenefitanalysesofproposals.TheClimateChangeReviewGroupreportsfindings,conclusionsandrecommendationstoTelstra’sPolicyCouncilandtotheChiefExecutiveOfficerLeadershipTeamasrequired.

GreenChallenge@TelstraInJanuary2008,Telstra’sCorporateEnvironmentGroupsoughtfeedbackfromnearly800Telstraemployeestoascertaintheirenvironmentalinterests,concernsandbehaviours.Theinformationgainedfromthesurveyinformedthedevelopmentofthenewgreenofficeprogram,GreenChallenge@Telstra,whichwaslaunchedonWorldEnvironmentDayinJune2008.

GreenChallenge@TelstraisajointinitiativebetweentheTelstrabusinessunitsCorporateHealthSafety&EnvironmentandTelstraProperty.TheprogramchallengesTelstraemployeestoconsiderhowtheirbehaviouratworkimpactstheenvironmentandtorecognisethattheycaninfluencemuchmorethanrecyclingorwateruse.Theprogramaimsto:

• raisestaffawarenessoftheenvironmentalimpactsthatresultfromdailyofficeactivitiesandpractices;

• educatestaffonhowtoreducetheircarbonfootprint;

• enablestafftomakeinformeddecisionsabouthowtheycommutetowork;

• encouragestafftouseTelstra’sconferencingtechnologytoreducebusinessairandtaxitraveltocutgreenhousegasemissions;and

• engagestaffinenvironmentalmanagementanddecision-making.

Improving our energy efficiencyTheenvironmentalimpactsassociatedwithenergyconsumptionthroughtheburningoffossilfuelsarewidelyacknowledged.Energyefficiencybringsaboutopportunitiestoreduceenvironmentalimpacts,reducecostsassociatedwithwastefulenergyconsumptionanddeliversocialbenefitssuchascleanerair.TheimpactofTelstra’senergymanagementprogramsisconsiderable.Weareoneofthelargestownersandoperatorsofcommercialandnetworkproperties,wehavethelargestautomotivefleetofitskindandwearethelargestprivateoperatorofsolarpanelsinAustralia.

Wecanhaveasignificantpositiveimpactbyfacilitatinggreaterenergyefficiencyacrossourbusiness,supplychainandcustomerbase.

Energy consumptionTelstra’stotalmeasuredenergyconsumptionfor2007/08was6,064,687GJ.Thisincludeselectricityuse,naturalgasforbuildingsandthenetwork,LPG,dieselandpetrolforvehiclesanddieselforpowergeneration.

WhilefuelconsumptioninTelstra’sfleetwasreduced,thegraphbelowshowsthatouroverallenergyconsumptionfor2007/08increasedby3.7percentfrom2006/07.Thisanticipatedrisewasduetoanumberoffactors.

First,therewasanincreaseintheuseofelectricityinournetworkfacilitiesduetoconcurrentoperationoftheNextG™andCDMAsystems.TheclosureoftheCDMAnetworkinApril2008willremovethisdemandfromourenergyrequirementsin2008/09.

Secondly,therewasalsosubstantialgrowthininternetdatacentresinCBDsites,andsomechangestositefunctionality.

Thirdly,anestimateforelectricityusedatunmeteredsiteswasincludedforthefirsttimein2007/08.Anunmeteredsiteisapieceofequipmentsuchasaroadsidecabinetthatdoesnothaveameterbutischargedafixedamountbasedontheequipmentenergyrating.Consumptionforunmeteredsitesin2007/08wasestimatedat220,503GJ.TheinclusionofthisestimateprovidesamoreaccuratepictureofTelstra’selectricityconsumption,anddemonstratesTelstra’scommitmenttotransparentandaccuratereporting.

78percentofemployeesbelieveTelstraisanenvironmentallyresponsiblecompany

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5. Environment matters

Energyconsumption2002–2008

Energymanagementprogramscontinuedtoimproveenergyefficiencyinournetwork,buildingsandoffices.In2007/08wesaved31,924GJofenergy,or9,605tonnesCO2equivalent.Thisisequaltothegreenhousegasemissionsfromaround680averageAustralianhomesforanentireyear.

InJune2008,Telstraswitchedoffscreensaversonaround36,000computersacrossthecompany,reducingTelstra’senergyconsumptionbyanestimated646tonnesofCO2equivalentannually–comparabletothegreenhousegasemissionsfrom46averageAustralianhouseholdsforayear4.Telstra’sscreensaverswereremovedfromallWindowsXPlaptopsanddesktopcomputers,andreplacedwithablackscreensaver.Thissimpleinitiativeispartofawiderprogramthatpromotespracticalwaystoconserveenergyandcontributetoagreenerworkplace.

Solar energyTelstraisoneofAustralia’slargestusersofsolarpowerwith10,2655solarpoweredsitesincludingexchanges,radioterminals,smallrepeaterstationsandpayphones.ManyofthesesitesareinremotelocationsenablingTelstratoprovidetelecommunicationservicestotheseremoteareas.

InJune2008ahydrogenfuelcelltestfacilitywasinstalledatourMelbourneheadquarters.Thehydrogenfuelcell,andasmallsetofsolarpanels,willbetrialledbyTelstraPropertyduring2008,andtheirpotentialuseinTelstra’snetworkandbuildingswillbeassessed.

Transport efficiency ThisyearwecontinuedtopurchaseLPGanddieselvehiclesasameansofreducingthegreenhousegasemissionsfromTelstra’sfleet.WealsocontinuedtoinstallGPSsystemsintechnicians’vehiclestolinkintothejobdispatchingsystem,toimproverouteefficiencyandproductivity.Inaddition,thisyearwereducedthenumberofvehiclesinthefleetby17percent,reducingfleetenergyuseby16.8percent.

In2007/08,Telstraused42,854,868litresoffuel(LPG,petrolanddiesel)andproduced105,736tonnesCO2equivalentingreenhousegasemissions,areductionof16.7percentinlitresusedand21percentintonnesCO2equivalentfrom2006/07.Thedecreaseintransportgreenhousegasemissionsisdueprimarilytothereductioninvehiclenumbersandconsequentfuelconsumption.

OurpartnershipwithGreenfleetcontinues.Greenfleetisanot-for-profitorganisationthatplantstreestohelpoffsetvehicleemissionsaswellasbenefitingtheenvironmentthroughincreasednativehabitatanddecreasedsalinityanderosion.Aspartofoursalarysacrificepackageforemployees,apaymentismadetoGreenfleetforeachvehicle.Thiswasintroducedin2003andby1July2005,allsalarysacrificevehicleswerecoveredbythispayment.

During2007/08,airtravelbyTelstrastaffwas125,727sectors(onewayflights)or124,054,956kmofflight.Thiscomparedwith118,279sectorsfor2006/07.Datawascollectedontotalkilometrestravelledforthefirsttimein2007/08.Thiswillprovideabenchmarkforfuturereporting.

2002/03

Total Energy use (GJ)

GJ GJ per $M revenue

Total Energy use (GJ) per $M revenue

2003/04 2004/05 2005/06 2006/07 2007/08

8,000,000

6,000,000

4,000,000

2,000,000

0

10,000,000 400

320

240

160

80

0

4Toprovideameaningfulcomparisonofgreenhousegasemissionsthroughoutthissection,weuseinformationpublishedbytheAustralianGovernmentDepartmentofEnvironment,WaterHeritageandtheArtsinGlobal Warming Cool It(www.environment.gov.au/settlements/gwci/households.html).Thisstatesthat:‘Eachyear,theaverageAustralianhouseholdgeneratesabout14tonnesofgreenhousegas.’

5Asat30June2008.

62

Officepaperconsumption2002-2008

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

16

12

8

4

0

400,000

300,000

200,000

100,000

0

Volumes of office paper (reams)

Volumes of paper (reams) per domestic staff

Reams Reams per domestic staff

Water Asatelecommunicationscompanyourenvironmentalimpactrelatingtowateruseisrelativelylow.Weusewaterinouroffices,linedepotsandexchanges,primarilyforstaffamenitiessuchaskitchens,toiletsandshowersandforcoolingtowers.During2007/08,Telstraconsumed874megalitresofwateratitsbuildingsandsites(thisdoesnotincludewashingofTelstravehiclesatcommercialcarwashesorofhomevehiclesbyemployees).

Thisyear,actionstoreducewaterconsumptionincludedtheinstallationofwaterlessurinals,flowrestrictiondevicesontapsandupgradingoftoiletcisterns.Inaddition,somewater-cooledcoolingtowershavebeenreplacedwithair-coolingunits,andareductioninwaterdischargetowasteincoolingtowerswasachievedbyincreasingcyclesofconcentrationtooptimumlevels.During2007/08,watersavingactionssavedanestimatedtotalof52megalitresofwateracrossourofficebuildingsandnetworksites.

Ourundergroundnetworkinfrastructure,accesspits,manholesandpipes,mayperiodicallybefilledwithgroundwaterand,whenitrainsheavily,stormwater.During2007/08approximately26megalitresofwaterwereremovedfromnetworkaccesspitsduringmaintenanceactivities.Telstrarecycledapproximately20megalitresofthis,comparedwithapproximately16.8megalitresin2006/07.

Duringfieldconstructionactivityenvironmentalcontrolsareputinplacetomanagesoil,wastesandothermaterialstopreventthembeingwashedintostormwaterdrainsandnaturalwaterways.

Managing resource efficiency and waste OneofthekeyenvironmentalissuesfacingTelstra,andthemajorityofotherlargebusinesses,istheuseofresourcessuchasmaterials,energyandwater.Telstraisamajoruserandpurchaserofmaterialsrangingfromnetworkequipmentandconstructionmaterials,suchaspits,pipeandcable,tostationeryandofficepaper.Materialusehasenvironmentalimpacts,throughconsumingnaturalresourcesandgeneratingwastethatrequiresdisposal.Wearecommittedtoimprovingefficienciesandminimisingtheimpactsofourmaterialuse.

PaperTominimisepaperusewithinTelstrawehaveintroducednewinitiativesandimprovedexistingactivitiestomovefrompaper-basedsystemstoonlinesystemsforprovidinginternalinformationtoemployees.Telstraemployeesnowhaveonlineoptionsforcompletinginternalprocesses,suchasapplyingforleaveandorderingmaterials,andformorecomplexprocessessuchastenderapplicationsforsupply.Asaresult,wehavedecreasedtheamountofpaperrequired,andimprovedtheefficiencyofourinternaladministrationprocesses.

In2007/08theconsumptionofofficepaperwasreducedbyapproximately35,900reams,whichisa14percentreductionfrom2006/07.Overthelastsixyears,thenumberofreamsusedperemployeehasdecreasedfrom10.3in2002/03to6.5in2007/08.

Telstracontinuestooffercustomersthechoiceofonlinebilling,includingtheabilitytosendTelstrabillstomobilephones.Inaddition,followingcustomerresearchlastyearTelstraintroducedanewlooksummarypaperbilltoreducebothcomplexityandtheamountofpaperused.Thismeansanenvironmentalbenefitisdeliveredbyeverycustomerwhoswitchestoonlinebillingorchoosesthesummarybill.

5. Environment matters

Waste WeuseTelstra’sNationalWasteManagementSystem(NWMS)formostofourwasteservices,includingthecollection,transportationandprocessingofgeneralwaste,recyclableitems,liquidwasteandhazardouswastes.TheNWMScoversmosttypesofwastegeneratedfromoffices,fieldoperationsandcustomerpremises.Exceptionsincludethecollectionofscrapcable,rentalphonesandmobilephones,whicharemanagedseparatelyunderindividualprograms.

Thisstreamlinedapproachassistsallemployeestodisposeofwasteinanappropriatemannerbyprovidingasinglepointofcontacttoarrangeforcollectionanddisposal.

During2007/08,Telstra:

• recycled69percentofallsolidandliquidwasteacrossthebusiness–anincreasefrom65percentin2006/07;

• reducedofficepaperconsumptionbyapproximately35,900reams–a14percentreductionfrom2006/07;

• recycled250tonnesofbottles,cansandmilkcartonsand2,927tonnesofpaper;

• decreasedthevolumeofourtotalwastefordisposaltolandfillorspecialtreatmentfrom17,527tonnesin2006/07to15,085tonnesin2007/08.Thisdecreaseisprimarilyduetoareductioningeneralwasteandpitwaterdisposedtoatreatmentfacility;and

• divertedorganicwastefromlandfillthroughrecycling,saving15,727tonnesofgreenhousegasemissions(CO2equivalent)during2007/08,downfrom22,377in2006/07.

TheLCAprocessalsoidentifiedthemostsignificantcontributorstoenvironmentalimpact.Itfoundthatgreenhousegasemissionssavingscomefromthetransportavoidedtodeliverconventionalpaperbillsandremovingtheneedforbillprintingandsortingequipment.Thisisanewinsightintothebenefitsofonlinebillingandourfirstquantificationofthegreenhousegasemissionssaved.

Online billing study Case studyItiswidelyassumedthatonlinebillinghasalowerenvironmentalimpactthanpaperbilling.Withelectricity,fuelandprintingconsumablesusedtoprintpaperbillsanddistributethembypostalservices,thereareobvioussavingsofpaperandenergybyusinganonlinebill.Butisthisthewholepicture?

Behindthescenes,computerserversandhomePCsuseelectricitytogenerateandaccesstheonlinebills.ArecentstudybyTelstra’sCorporateEnvironmentGroupandenvironmentalconsultantsURSAustraliaPtyLtdusedalifecycleapproachtotestthisassumption,andtoprovidegreaterinsightintothebroaderenvironmentalimpactsandbenefitsofonlinebilling.

TheLifeCycleAssessment(LCA)processisarigoroustechniqueforassessingtheenvironmentalinputsandimpactsassociatedwithaproductorprocess.ThemethodisguidedbyanInternationalOrganisationforStandardisationstandardandrequiresapeerreviewbyaninternationallyrecognisedexpert.Thestudyconsideredinputssuchasenergyandmaterialusetocomparetheenvironmentalimpactsofonlinebillingandpaperbillingforbillpreparation,distributionanduseofthebillbythecustomer(suchasprintingthebillathome).

TheLCAprocessshowedthattherewereenvironmentalbenefitsintheuseofonlinebilling.Forexample,thestudyfoundthatifonemillionresidentialcustomersweretoturnofftheirmonthlypaperbillandselectonlinebillingonly,andassumingthat50percentprinttheironlinebillathome(average6.5printedpages),theenvironmentalbenefitswouldbe:

• annualsavingsof18.9tonnesCO2equivalent;

• annualsavingsof39,000reamsofpaper;and

• reducedenvironmentalimpactsforlanduse,humantoxicityandresourceuse.

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Product stewardshipTelstraunderstandstheimportanceofgoodproductstewardshipandiscontinuouslylookingforopportunitiestominimisethelife-cycleimpactsofourproductsandservices.

In2007/08,TelstracontinuedasasignatorytotheNationalPackagingCovenant(NPC)andsetupaPackagingInnovationGroupwithcrossbusinessrepresentativestohelpdriveourpackaginginitiatives.Formoreinformationaboutourpackaginginitiatives,seeTelstra’sNPCreport,availableonlinefromDecember2008atwww.packagingcovenant.org.au

In2007/08,TelstracontinuedtosupporttheMobileMusterprogramwithbinsprovidedinallTelstrashopsandtheadditionofMobileMusterpostbagsforconsumerstosendunwantedmobilephonesandaccessoriestotheprogramforrecycling.Thetotalcollectionfortheprogramwas97tonnesofmobilephonecomponentsincludingalmost790,000batteriesandhandsets.CollectionsfromTelstrastorestotalled24tonnesofmobilephonecomponentsincludingmorethan90,000handsets.

Greenhouse gas emissionsManagementofgreenhousegasemissionsisanimportantglobalissue.Telstrarecognisesthisandhasbeenmeasuringandmanagingourownemissionsforsomeyears.Thenatureofouroperationsmeansthatourgreenhousegasemissionsaremainlyderivedfrom:

• theuseofelectricityandgasforlighting,heatingandairconditioninginofficeandnetworkbuildingsandelectricitytooperatethenetwork(92percent);

• theuseoffuel(LPG,petrol,diesel)forvehiclesandstand-bygenerators(sevenpercent);and

• by-productsoforganicwastedecomposition(suchaspaper,cardboard,timber,foodscraps)thatgoestolandfill(onepercent).

Ourprogramstoreducethecompany’sgreenhousegasemissionsfocusonthemoreefficientuseofelectricityandfuel,andimprovingourrecyclingoforganicwastes,suchaspaperandcardboard,inordertodivertwastefromlandfill.

TelstraisalsoidentifyingwaysinwhichTelstra’scustomersandbusinessescanusetelecommunicationsproductsandservicestoreducetheirowngreenhousegasemissions.

In2007/08,Telstra’stotalgreenhousegasemissionswere1,500,803tonnesCO2equivalent,anincreaseof7.9percentfrom2006/07.ThisrisereflectstheincreaseinelectricityconsumptionassociatedwiththeconcurrentoperationoftheNextG™andCDMAnetworks,thegrowthininternetdatacentres,andtheinclusionofunmeteredsites.Theestimateforelectricityusedatunmeteredsites,whichwasincludedforthefirsttimethisyear,added4.8percenttothegreenhousegasemissionstotal.

Greenhousegasemissions2002-2008

5. Environment matters

TelstraisoneofAustralia’slargestusersofsolarpower

2002/03

Greenhouse gas emissions (tonnes CO2e) per $M revenue

2003/04 2004/05 2005/06 2006/07 2007/08

Greenhouse gas emissions (tonnes CO2e)2,000,000

1,600,000

1,200,000

800,000

400,000

0

100

80

60

40

20

0

tonnesCO2e

tonnes CO2 per $M revenue

WhiletheincreasingcustomeruseofTelstra’sservicesthroughourrangeoffixedandmobiledeviceswillrequireanincreaseduseofelectricity,wearealwayslookingforwaystodeliverourservicesmoreefficiently.

Wecontinuetoimplementarangeofprogramstodeliverongoinggreenhousegasemissionssavings,suchasefficientuseofelectricityinbuildings,theintroductionofLPGvehicles,andrecyclingoforganicwastessuchaspaper,cardboardandtimber.

Thetotalgreenhousegassavingsfor2007/08were173,686tonnesCO2equivalent.Thisincludessavingsduetonewinitiativesimplementedthisyear(25,332tonnesCO2equivalent)aswellasongoingsavingsresultingfrominitiativesimplementedsince2000/01(148,354tonnesCO2equivalent).Totalsavingsareequivalenttothegreenhousegasemissionsfromapproximately12,400averageAustralianhouseholdsforayear.

Savingsduetonewinitiativesin2007/08include9,605tonnesCO2inelectricitysavingsand15,727inwastesavings.

Greenhousegasemissionssavings(fromprioryearinitiativesandnewinitiatives)2002-2008.

Managing our land use appropriatelyToprovideaworldclasstelecommunicationsserviceinAustraliaweneedtodesign,build,operateandmaintainthenetworkinfrastructuretosupporttheservice.Inordertodothis,wearerequiredtocomplywiththerelevantlegislation.

AccesstolandtobuildtelecommunicationsnetworkinfrastructureislegislatedbytheTelecommunicationsAct1997andrelatedsubordinatelegislation.TheEnvironmentProtectionandBiodiversityConservationAct1999(EPBC)requiresTelstratohaveaprocessthatidentifies‘AreasofEnvironmentalSignificance’priortoundertakingactivityintheseareasoraccessingcertainpartsofland.

Telstra employees share top petrol saving tips Case studyIn2007/08,over150TelstraemployeeslearnthowtoboosttheirsavingsbyusinglesspetrolwhentheyparticipatedinaninternationalfueltrialwithShelltominimisetheenvironmentalimpactofTelstra’sfleetoperations.

Two-thirdsoftheparticipants(68percent)achievedfueleconomybenefits,withmorethanaquarter(28percent)reducingtheirfuelconsumptionby10to30percent.Theaverageparticipantachievedafueleconomysavingoffourtofivepercent.

“TelstrahasthelargestcommercialfleetofitskindinAustraliaandhasbeentakingactiontoreducetheenvironmentalimpactofourfleet,”saidBrendanStooke,GeneralManagerTelstraFleet.

“ThetrialwithShellisyetanotherexampleofhowwearereducingourcarbonfootprintandwe’repleasedtoseethatoverathird(41percent)ofourdriversinthetrialrecordedfueleconomyimprovementsintherangeof5to20percent.”

TelstraistheonlycompanyinAustraliatohavetakenpartintheGlobalFuelEconomyStudywhereShellpartneredwith10multinationalcompaniesineightcountriesandtrainedover1,000driversonhowtogetmoreoutoftheirfuel.

Followingthesuccessofthetrial,communicationswillberolledouttoTelstrafleetdriverstoencourage‘green’drivingtechniquestoreducefuelconsumption.TheprogramwillbepromotedusingbumperstickersonTelstrafleetvehicles.

CraigWhite,TelstraProductManagement,participatesinthetrial.

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Greenhousegasemissionssavings(fromprioryearinitiativesandnewinitiatives)2002-2008

5. Environment matters

2002/03

Savings (from previous years’ initiatives) Electricity (for current year)

2003/04 2004/05 2005/06 2006/07 2007/08

Waste (for current year) Fleet (for current year)

200,000

160,000

120,000

80,000

40,000

0

Eachyear,Telstraconductsbothnewandmaintenance-basedinfrastructureprojects(numbersvaryfromyeartoyear).Inordertomanagethepotentialenvironmentalimpactsofourfieldactivities,weundertakecomprehensivepre-designriskidentification,designriskassessmentandonsiteriskmanagementprocesses.

During2007/08,Telstraissuedapproximately53,000landaccessnotices,andconducted92environmentalassessmentsforworkinAreasofEnvironmentalsignificance.Actionsrequiredformoresignificantprojectworkinareasofenvironmentalsignificancewere:

Actions 06/07 07/08

CodeNotificationstoDEWHA 25 46

EPBCActreferralstoDEWHA 2 8

TheincreaseinthenumberofDepartmentoftheEnvironment,Water,HeritageandtheArts(DEWHA)noticesandreferralsbetween2006/07and2007/08canbepartiallyattributedtonationalprojectssuchastheNextG™networkrollout,whichextendedintomoresensitiveareassuchasnationalparks.

Visual amenity and noiseTelstraisparticularlyconsciousofthepotentialimpactonvisualamenitythatiscausedbytheinstallationofnewmobilefacilitiesinurbanAustralia.Duringtheplanning,designandconstructionprocessTelstrafollowstheGuidelinesforLowImpactMobileFacilitiestominimisetheimpactonvisualamenity.Telstrarequiresallemployees,contractorsandsuppliersofequipmenttomeetapplicableAustralianStandardsandgovernmentregulationsfornoiseemissions.

Fuel storage systemTelstrastoresfuelatalargenumberofnetworksitestoprovidebackupbydieselgenerators.Aprogramisinplacetomonitorundergroundfuelstoragetanksforleaksandotherenvironmentalimpacts.

PayphonesThemajorityofour22,177payphonesarelowimpactfacilitiesanddonotrequireenvironmentalimpactassessment.However,wherepayphonesaretobeinstalledinAreasofEnvironmentalSignificance,furtherplanningapprovalandassessmentisundertaken.Tominimisetheenvironmentalimpactfrompayphoneswe:

• usesolarpowerinremoteareaswherethereisnoreadilyavailablesourceofelectricity;

• repairandreuseratherthandisposeoffaultyelectronicmodules;

• providereusablepackagingformanypayphonespareparts;

• recoverandreusesurpluspayphoneparts;

• reusewholepayphonesandboothswhenrelocationsorremovalsoccur;and

• breakdownnon-reusablepayphonesforpartsandmaterialsforappropriaterecycling.

ComplianceDuring2007/08,Telstra’senergyandgreenhousedata,whichformasignificantpartoftheenvironmentaldata,wassubjecttotheverificationprocessoftheGreenhouseChallengePlusProgram.ThisrigorousprocessiscarriedoutbyanindependentauditorandprovidesvaluablefeedbacktoTelstraonthemanagementandaccuracyofitsextensivedatafromover14,000sitesand12,000vehicles.Detailsoftheverificationprocesscanbefoundatwww.greenhouse.gov.au/greenhousefriendly/business/verification.html

Theverificationreportnotedthat“theoverallprocessfortrackingandrecordingelectricityconsumptionappearscomprehensiveandiseffectivelymanaged”.Adiscrepancywasfoundinthetrackingofenergyconsumptionfromunmeteredsites.In2008/09Telstrawillfocusonthisareatofurtherimprovedataaccuracy.

Systemsformonitoringandmeasuringtransportfuelswerealsosubjecttotheverification.Thereportnotedthat“theoverallrigourofthefinancialelementsofthesystemandthedetailedreviewofrelativefuelconsumptionstatisticsprovidesahighlevelofconfidencethatthetotalconsumptionisaccurate”.

In2007/08,Telstrahadnomaterialbreachesofanyenvironmentallaws.

Planned actions for 2008/09• Calculatethecarbonfootprintsofallbusinessunitsand

corporategroups.

• Determinethecarbonintensity(tonnesofCO2e/unitofservice)ofTelstra’sEnterpriseandGovernmentserviceofferings.

• Increasethe2009employeeengagementsurveyscoreforthe‘environmentresponsibility’question.

• CompleteastudyonthehydrogenfuelcellfacilityandsolarpanelsinstalledatourMelbourneheadquarterstoassesstheirpotentialuseinTelstra’snetworkandbuildings.

• EnhanceTelstra’sdrivereducationprogramwithanawarenessprogramtoencourageourfleetdriverstoadoptgreendrivingtechniquestoreducefuelconsumptionandCO2emissions.

Network Construction Carbon Footprint Case studyTelstra’sNetworkConstructiongroupisthefirstlineofbusinesswithinthecompanytoestimateandcompileagreenhousegas(GHG)inventory.

ThemethodologyusedforcalculatingtheircarbonfootprintwasderivedfromtheAustralianGovernment’sDepartmentofClimateChangeNationalGreenhouseAccountsFactors,whichprovidesguidanceontheemissionsourcestoincludeinaGHGinventory,andhowtoquantifytheseemissions.

TheestimatedcarbonfootprintresultingfromtheactivitiesoftheNetworkConstructiongroupis27,840tonnescarbondioxideequivalent(CO2e),whichequatesto2percentofTelstra’stotalgreenhousegasemissions.Emissionsfromtheirfleetactivitiesarethelargestcontributortotheircarbonfootprint.

ThereportpresentedabaselineassessmentofthecarbonfootprintofNetworkConstructionandprovidedrecommendations,includingpromotionoffuelefficientdrivinganddevelopingcarbonreductionmeasuresandtargets.

NetworkConstructionnowhasanopportunitytotargetandreducetheirenergycostsandtheircarbonimpactandwillbemeasuringtheirfootprintyearonyear.

ThisyearTelstrastorescollected24tonnesofmobilephonecomponentsforrecycling

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Smarter, greener, together, for Australia

5. Environment matters

69

Environment dataWaste

Volumeofwaste:generalandspecial

Waste Unit 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

GeneralWaste (tonnes) 16,265 15,182 11,569 9,002 9,874 8,380

Asbestos (tonnes^) 490 64 195 61 52 84

Medical (tonnes^) 60 7 9 8 7 0

MiscellaneousHazardousWaste (tonnes^) 225 99 29 15 18 25

EquipmentcontainingPCBs&PCNs* (tonnes) 1,484 0 0 0 0 0

WeightofrecoveredPCBs&PCNswaste (tonnes) 27 36 7 1 2 0

Waterfrompits (tonnes) 23,945 26,568 33,910 19,202 7,064 6,089

Other# (tonnes) 2 153 381 508 507

Totalwaste (tonnes) 41,931 41,956 45,872 32,822 17,527 15,085

Measure 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Totalwastetolandfill/treatment(tonnes) 41,931 41,956 45,872 32,822 17,527 15,085

Totalwaste(tonnes)perstaffmember 1.13 1.16 1.16 0.87 0.49 0.44

Totalwasterecycled(tonnes) 11,134 31,307 21,169 29,635 33,266 32,981

Recyclingas%oftotalwaste(tonnes) 21% 43% 32% 47% 65% 69%

*Thisfigurenowincorporatedinthescrapmetaldatainwastesreturnedtoprocessormarket.#Thisfigureincludeswastematerialsfrompayphones,rentalphones,phonecardsande-waste.^Datain2002-03reportedasm3.

5. Environment matters

70

5. Environment matters

Wastereturnedtoprocessormarket

Greenhousegasemissions

Waste Measure 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Commingled(egbottles,cans,milkcartons) (tonnes^) 1,535 100 182 314 338 250

Electricalcomponents(egcircuitboards,testequipment)* (tonnes^) 5,000 – – – – –

Mixedmetal (tonnes^) 60 10,577** 1,284 576 730 543

Mixedpaper (tonnes) 1,824 2,584 2,803 4,369 3,811 2,927

Furnituresold (tonnes^) 0 149 140 6 0 8

Cardboard (tonnes) 1,021 2,527 2,631 3,533 4,737 3,147

Timber (tonnes) 133 192 257 192 315 201

Scrapcable (tonnes) 1,874 11,921 166 317 222 131

Rentaltelephones (tonnes) 152 211 122 228 133 146

Payphones (tonnes) – – 27 0 735 46

Batteries (tonnes^) 251 795 2,121 4,655 5,226 5,440

Waterrecycled (tonnes) – 2,189 11,436 15,440 16,887 20,032

Other*** (tonnes) – 62 100 4 131 111

Totalwasterecycled (tonnes) 11,134 31,307 21,169 29,635 33,266 32,981

Measure 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Greenhousegasemissions(tonnesCO2e) 1,512,564 1,603,042 1,338,221 1,360,358 1,390,306 1,500,803

Greenhousegasemissions(tonnesCO2e)per$Mrevenue 73.8 77.3 60.4 59.8 58.7 60.4†

*From2003-04thisfigureisincludedin‘mixedmetal’andnotreportedseparately.**Scrapmetalcollectedfromexchangesnotpreviouslyrecorded,hasbeenincludedinthisyear.***Includescombinedglassandmetalfromconstructionactivities.^Datain2002-03reportedasm3.†Includesunmeteredsites.

71

Greenhousegasemissions(tonnes)CO2e

Energy Type 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2007-08 2007-08 2007-08

Scope 1 Scope 2 Scope 3

Buildings and network

Electricity

-Commercialsites 212,552 209,095 189,152 178,691 170,574 171,621 – 152,754 18,867

-Network 1,149,545 1,236,961 980,806 1,008,177 1,063,900 1,140,419 – 1,004,419 136,000

-Other(unmeteredsites)** – – – – – 66,271 – 58,367 7,903

-Sub-total 1,362,097 1,446,056 1,169,957 1,186,868 1,234,473 1,378,311 – 1,215,540 162,770

Naturalgas Notavailable Notavailable 416 805 557 1,265 982 – 283

-Diesel(StandbyPowerGeneration) 3,577 2,586 2,384 2,929 2,250 1,581 1,469 – 112

Fleet

-Petrol 111,432 100,279 106,767 110,692 80,805 52,369 48,530 – 3,839

-Diesel 34,629 31,780 36,649 39,227 39,549 39,630 36,833 – 2,797

-LPG 829 4,057 8,164 11,735 13,909 13,737 12,626 – 1,112

-Sub-total 146,890 136,116 151,581 161,654 134,263 105,736 97,989 – 7,747

Waste* – 18,283 13,883 8,102 18,761 13,910 – – 13,910

Total 1,512,564 1,603,042 1,338,221 1,360,358 1,390,306 1,500,803 100,440 1,215,540 184,822

*Emissionsduetowasteincludedfrom2003-04onwards.**Emissionsduetounmeteredsitesincludedfrom2007-08onwards.

5. Environment matters

72

5. Environment matters

*Datameasurementmethodologychangedfrom2003to2004toimprovedataaccuracy.**TheenergygeneratedbyTelstra’ssolarpowerednetworksitesisnotdirectlymeasured.***FleetfuelvehiclesareforallTelstravehiclesandmechanicalaids(includesTelstraoperationalvehicles,salarysacrificevehiclesandvehiclesleasedtosubsidiaries/othercompanies).****Energyuseduetounmeteredsitesincludedfrom2007-08onwards.

Greenhousegasemissionssavings(tonnes)CO2e

Energyuse(GJ)

Measure 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

New savings from current year initiatives

-Electricity 20,018 31,915 24,442 20,031 13,182 9,605

-Fleet 317 695 1,862 2,112 3,267 0

-Waste 10,757 14,711 15,755 20,122 22,377 15,727

Ongoing savings from prior years initiatives (electricity only) 38,766 58,784 90,699 115,141 135,172 148,354

Total 69,858 106,105 132,758 157,406 173,998 173,686

Energy Type 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Buildings and network

Electricity

-Commercialsites 637,352 644,566 579,717 544,847 541,239 547,705

-Network 3,733,405 3,986,286 3,212,663 3,261,562 3,512,551 3,794,539

Other(unmeteredsites)**** – – – – – 220,503

-Sub-total* 4,370,757 4,630,852 3,792,380 3,806,409 4,053,789 4,562,748

Naturalgas N/A N/A 6,541 11,296 7,821 19,139

Diesel((StandbyPowerGeneration)) 49,305 36,977 34,085 37,447 29,008 21,052

Solar ** ** ** ** ** **

Fleet ***

-Petrol 1,524,389 1,371,816 1,460,578 1,362,869 1,047,244 724,323

-Diesel 495,071 454,342 523,941 501,491 509,913 527,697

-LPG 13,315 65,173 131,141 171,916 200,826 209,729

-Sub-total 2,032,775 1,891,331 2,115,661 2,036,276 1,757,983 1,461,749

Total 6,452,837 6,559,160 5,948,666 5,891,428 5,848,601 6,064,687

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Fueluse(litres)

Materials

Miscellaneous

Fuel type 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Fleet

-Petrol 44,572,768 40,111,581 42,706,972 39,849,970 30,621,170 21,165,825

-Diesel 12,825,668 11,770,514 13,573,613 12,992,000 13,210,176 13,670,894

-LPG 518,199 2,535,929 5,102,779 6,689,319 7,665,126 8,004,932

-E10 – – – – – 13,217

-Sub-total 57,916,635 54,418,024 61,383,364 59,531,289 51,496,472 42,854,868

Buildings and network

Diesel(StandbyPowerGeneration) 1,277,340 957,955 883,020 970,135 751,498 545,384

Total 59,193,975 55,375,979 62,266,384 60,501,424 52,247,970 43,400,252

Measure 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Volumesofofficepaper(reams) 383,000 353,112 358,243 278,678 256,774 220,856

Volumeofpaper(reams)perstaffmember 10.3 9.8 9.0 7.4 7.2 6.5

2005-06 2006-07 2007-08

NetworkConstructionEnvironmentaltrainingcoursesdelivered 1,600 1,400 841

Solarsites 10,450 10,693 10,265

TelstraEnvironmentalIncidentsNationally 34 22 12

CodeNotificationstoDepartmentofEnvironment,Water,HeritageandtheArts 50 25 46

EnvironmentalAssessmentsforworkinAreasofEnvironmentalSignificance 51 61 92

EPBActreferrals(DepartmentofEnvironment,Water,HeritageandtheArts) 18 2 8

5. Environment matters

74

Global Reporting Initiative Index

Aspect GRI indicator Description Report section Page Reporting compliance

Economic indicatorsEconomicperformance EC1 Directeconomicvaluegeneratedanddistributed Societymatters 22 n

EC2 Financialimplicationsforclimatechange Societymatters 16 n

EC3 Pensionplanobligations Employeesmatter 37 n

Marketpresence EC5 Entrylevelwage Employeesmatter 37 n

EC6 Useoflocallybasedsuppliers Societymatters 26 n

EC7 Proceduresforlocalhiring Societymatters 26 n

Indirecteconomicimpacts EC8 Investmentsthatprovidepublicbenefit Societymatters 22–25 n

EC9 Indirecteconomicimpacts Societymatters 22–25 n

Environmental indicators

Materials EN1 Weightofmaterialsused Environmentmatters 69 n

Energy EN3 Directenergyconsumption(on-site) Environmentmatters 61 n

EN4 Energyconsumption(generatedoff-siteandtransportfuel) Environmentmatters 61 n

EN5 Energysavings Environmentmatters 65 n

EN6 Energy-efficientproductsandservices Societymatters 18 n

EN7 Indirectenergyconsumptioninitiatives Environmentmatters 18 n

Water EN8 Totalwaterwithdrawalbysource Environmentmatters 62 n

EN10 Waterrecycledandreused Environmentmatters 62 n

Biodiversity EN11 Landmanagedinproximityofprotectedareas Environmentmatters 65 n

EN12 Impactsofactivitiesonprotectedareas Environmentmatters 65 n

EN13 Habitatsprotectedorrestored Environmentmatters 65 n

EN14 Impactsonbiodiversity Environmentmatters 65 n

EN15 Threatenedspecies/habitatsaffectedbyoperations Environmentmatters 65 n

Emissions,effluentsandwaste EN16 Greenhousegasemissions Environmentmatters 64 n

EN17 Indirectgreenhousegasemissions Environmentmatters 64 n

EN18 Initiativestoreducegreenhousegasemissions Environmentmatters 64 n

EN21 Totalwaterdischargebyqualityanddestination Environmentmatters 69 n

EN22 Totalweightofwastebytypeanddisposalmethod Environmentmatters 69 n

EN23 Totalnumberandvolumeofsignificantspills Environmentmatters 73 n

GlobalReportingInitiativeIndex Fullyaddressed–n Partiallyaddressed–n

75

Aspect GRI indicator Description Report section Page Reporting compliance

EN24 Hazardouswaste Environmentmatters 69 n

EN25 Impactofwaterdischargesandrunoffhabitats Environmentmatters 62 nProductsandservices EN26 Environmentalimpactsofproductsandservices Environmentmatters 64 n

EN27 Productsreclaimedattheendoftheirlife Environmentmatters 64 nCompliance EN28 Finesandnon-compliance Environmentmatters 67 nTransport EN29 Environmentalimpactoflogistics Environmentmatters 61 nHuman rights indicatorsInvestmentandprocurementpractices

HR1 Screeninginvestmentsforhumanrightsissues Societymatters 26 n

HR2 Screeningsuppliersforhumanrightsissues Societymatters 26 nNon-discrimination HR4 Incidentsofdiscrimination Employeesmatter 39 nFreedomofassociation HR5 Freedomofassociationandcollectivebargaining Employeesmatter 37 nChildlabour HR6 Childlabour Societymatters 26 nForcedandCompulsoryLabour HR7 Forcedorcompulsorylabour Societymatters 26 nLabour indicatorsEmployment LA2 Employeeturnover Employeesmatter 37 n

LA3 Minimumbenefitsprovided Employeesmatter 37 nLabourmanagementrelations LA4 Employeescoveredbycollectivebargainingagreements. Employeesmatter 37 nOccupationalhealthandsafety LA6 Workforcerepresentationonoccupationalhealthandsafetycommittees Employeesmatter 42 n

LA7 Ratesofinjuryandlosttime Employeesmatter 45 nLA8 Programsrelatedtoseriousdiseases Employeesmatter 46 n

Trainingandeducation LA10 Averagehoursoftrainingperyearperemployeebyemployeecategory Employeesmatter 38 nLA11 Workforcetraining Employeesmatter 38 nLA12 Performancereviewandcareerdevelopment Employeesmatter 38 n

Diversityandequalopportunity LA13 Gender,agegroup,andindicatorsofdiversityforgovernancebodiesandemployees Employeesmatter 39 nProduct responsibility indicatorsCustomerhealthandsafety PR1 Managementofhealthandsafetythroughoutproductlife Environmentmatters 64 n

PR2 Productandservicehealthandsafetycompliance Customersmatter 51 nCustomerprivacy PR8 Customerdataprotection Customersmatter 52 nSociety indicatorsCommunity S01 Impactsofoperationsoncommunities Communitiesmatter 28 nPublicpolicy S05 Publicpolicypositions,developmentandlobbying Societymatters 15 n

Fullyaddressed–n Partiallyaddressed–n

Global Reporting Initiative Index

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Aspect GRI indicator Description Report section Page Reporting compliance

Internal operationsInvestment I01 Capitalinvestmentintelecommunicationnetworkinfrastructurebyregion SocietyMatters 22 n

Healthandsafety I03 Healthandsafetyoffieldpersonnelininstallation,operationandmaintenanceofmasts,basestations,layingcables,etc EmployeesMatter 42 n

I04 Compliancewithstandardsonexposuretoradiofrequencyemissionsfromhandsets SocietyMatters 20 n

I05 Compliancewithguidelinesonexposuretoradiofrequencyemissionsfrombasestations SocietyMatters 20 n

Infrastructure I07 Sitingofmastsandtransmissionsites SocietyMatters 20 n

I08 Numberandpercentageofstand-alonesites,sharedsites,andsitesonexistingstructures SocietyMatters 20 n

Providing accessAccesstotelecommunicationproductsandservices PA1 Accesstotelecommunicationsproductsandservicesinremoteandlowpopulation

densityareas CustomersMatter 54 n

PA2 Accessanduseoftelecommunicationproductsandservicesbydiversegroups CustomersMatter 53 n

PA3 Availabilityandreliabilityoftelecommunicationsproductsandservices CustomersMatter 49 n

PA4 Availabilityoftelecommunicationsproductsandservicesinareaswheretheorganisationoperates SocietyMatters 23 n

PA5 Telecommunicationproductsandservicesprovidedtoandusedbylow/noincomepopulationgroups CustomersMatter 53 n

PA6 Provisionoftelecommunicationsproductsandservicesinemergenciesanddisasters CommunitiesMatter 29 n

Accesstocontent PA7 Humanrightsissuesrelatingtoaccessanduseoftelecommunicationsproductsandservices SocietyMatters 19 n

Customerrelations PA8 PubliclycommunicationonEMFrelatedissues SocietyMatters 20 n

PA9 Totalamountinvestedinelectromagneticfieldresearch SocietyMatters 20 n

PA11 Initiativestoinformcustomersaboutproductfeaturesandapplications CustomersMatter 50 n

Technology applicationsResourceefficiency TA1 Examplesofresourceefficiencyoftelecommunicationproductsandservicesdelivered SocietyMatters 23 n

TA2 Examplesoftelecommunicationproducts,servicesandapplicationswithpotentialtoreplacephysicalobjects SocietyMatters 23 n

TA3 Transportand/orresourcechangesofcustomeruseofthetelecommunicationproductsandservices SocietyMatters 18 n

TA4 Indirectconsequencesofcustomeruseofproductsandservicesandlessonslearnedforfuturedevelopment SocietyMatters 24 n

Global Reporting Initiative Index

Telecommunicationsspecificindicators Fullyaddressed–n Partiallyaddressed–n

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C140

NOV 08