Telstra intends to acquire companies with software capabilities and product development as it

seeks to chart a new course to focus on digital households and customer services, David Thodey, chief executive officer of Telstra said.

In a conference with ABC Television, Mr. Thodey said, "'We will keep expanding our
product portfolio out, but there are new opportunities coming along that may provide us with
opportunities to do acquisitions."

''It is about acquiring capabilities rather than bolt-ons.''

Mr. Thodey remarked that though Telstra had good engineering capacities, this would soon
become immaterial upon the creation of the national broadband network because Telstra wouldnot have a phone network to maintain anymore. In light of this development, the telecoms
company would now concentrate on product development for household devices such as the T- box, and cloud computing internet systems.

Mr. Thodey adds: "''We have got to become a sales and marketing-led company - customers at
the centre of everything we do.

''So we have got a big cultural change to go through.
''For years we have had regulation on us, and the great opportunity we have now is to put that
behind us and move forward.''

The contract had reduced operational and capital expenses for Telstra, thereby it is now "freed
up" from certain baggage.

In the previous week, Telstra signed a deal worth $9 billion with NBN Co., giving the latter
company access to the telecommunication systems set up by Telstra, and to transfer the fixed-
line customers of the company to the new fibre network of NBN Co.