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Telstra posts huge profit -

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Telstra posts huge profit

Reporter: Phillip Lasker

TONY JONES: To finance now. The sacked Telstra chief, Ziggy Switkowski, has pulled a rabbit out of
a hat for his long-suffering shareholders. He's delivered a better than expected half-year profit,
above $2 billion, pushing up the share price to a near three-year high and preparing the ground for
full privatisation. Phillip Lasker reports.

PHILLIP LASKER: Outgoing Telstra Chief Ziggy Switkowski saved the best for last.

ZIGGY SWITKOWSKI (TELSTRA CHIEF EXECUTIVE): On this occasion, I am in the good position of being
able to report a quality set of numbers.

PHILLIP LASKER: Numbers showing Internet sales up 33 per cent and mobile phone revenue up nearly 9
per cent. After-tax profit for the six months to December was $2.34 billion - a modest rise of less
than 2 per cent. Shareholders receive an interim and special dividend totalling 20 cents a share.
Craig Young is the investment analyst with Tyndall. He says the broadband increase is expected, but
the mobile performance is more impressive.

CRAIG YOUNG (TYNDALL): I think the mobile performance was quite good. In the face of quite
substantial competition and rejuvenated competition, it's good to see Telstra competing well.

PHILLIP LASKER: Ziggy Switkowski, asked by the board in December to leave, staked his reputation on
achieving industry growth by 2006. He achieved it this year, but was reluctant to see today's
result as a vindication.

ZIGGY SWITKOWSKI: I would be a bit cautious about claiming victory. One might be tempted to, but I
think it would be reckless to.

PHILLIP LASKER: Dr Switkowski was also reticent on his possible successor and Chief Financial
Officer, Jon Stanhope, who's made no secret he wants the top job.

ZIGGY SWITKOWSKI: (laughs) You wouldn't expect me to comment on the process for the CEO selection.
Let me acknowledge: I have the highest regard for Jon Stanhope.

PHILLIP LASKER: Telstra, it seems, can do no wrong in the eyes of the market at the moment. Its
share price has gone up more than 7 per cent this month alone. It's now worth $5.30 - its highest
price since April 2002.