1. Broadband: Serious Business Dr Paul Paterson Director, Regulatory Telstra Corporation Limited 25 November 2003

2. Broadband: Serious Business ACCC broadband snapshot 2

3. Broadband: Serious Business Broadband growth in Australia The ACCC’s most recent snapshot of broadband deployment showed encouraging broadband growth Penetration will continue to rise as Australia progresses from an ‘early- adopter’ phase into a more mature market A recent comprehensive survey by the Australian Industry Group found that the use of broadband in Australian business is significantly higher than residential use 3

4. Broadband: Serious Business Telstra’s broadband forecast Telstra’s Broadband Forecast 2001 – 2007 (Australia) % of Australian Households Early Adopters Early Majority Early Mass Market 4

5. Broadband: Serious Business Telstra’s investment in broadband rollout Telstra currently has more than 420,000 broadband customers Telstra’s ADSL rollout is second only to the Snowy River Scheme, and a bigger project than the Adelaide to Darwin railway link, for example We have recently provided ADSL to our 1000 th exchange 5

6. Broadband: Serious Business Broadband availability in Australia 6

7. Broadband: Serious Business Australia is a world leader in broadband reach Broadband reach % of total households Source: McKinsey Quarterly 2003, # 2 % 7

8. Broadband: Serious Business The regulatory environment Broadband growth is occurring in the context of a significant development in the telecommunications industry – steady evolution towards a mature regulatory environment General principles are agreed - price, terms and conditions A ‘lean’ regulatory regime for broadband should provide incentives for ongoing investment and innovation while advancing the long-term interests of end users – (Australia’s Broadband Connectivity, The Broadband Advisory Group’s Report to Government, 2003) 8

9. Broadband: Serious Business State of play: Competition There is significant competition in the delivery of broadband There are currently over 200 ISPs competing for the provision of one or more types of broadband services in Australia Telstra provides access to Retail and Wholesale customers on ‘first come’ basis 9

10. Broadband: Serious Business Some common myths:  “Telstra favours its retail business in provisioning services”  “Incumbent telcos are holding back on broadband as they fear it will cannibalise their legacy revenue base”  “Broadband competition is limited in countries where telcos own both telephony (copper) and pay TV (HFC) networks” 10

11. Broadband: Serious Business Initiatives to drive growth The Telstra Broadband Fund Pair gain customer transposition Technology solutions for pair gains BigPond marketing campaigns ADSL demand register Telstra’s ADSL Service Level Guarantee Positive government initiatives such as HiBIS 11

12. Broadband: Serious Business The ADSL Demand Register In less than 2 months since the launch, at least 15 exchanges have shown extremely positive levels of interest Some early positive results: –Lightning Ridge – over 50% of its required threshold –Laidley (an hour from Brisbane) – over 70% of the way there –Point Cook – greater than expected interest resulting in Telstra examining network and cost issues for enabling this exchange Results in Britain were very encouraging – –More than 500 exchanges have hit their threshold –580 have already been enabled, and the balance are in progress 12