On 11 August 2016, Telstra announced it would return $1.5B in capital to shareholders, $1.25B in an off-market buy-back and $0.25B in an on-market buy-back. The off-market buy-back is similar in structure to the $1B 2014 Telstra buy-back. We still believe this is pretty much a token buy-back. At $1.25B it represents less than 2% of Telstra’s current market capitalisation, and so we expect the buy-back will be fairly heavily scaled back (the 2014 buy-back was scaled back by 70%). And similar to the 2014 buy-back, our estimates suggest this buy-back will likely be only significantly worthwhile for zero taxed Australian investors such as pension phase superannuation and charities, although value for taxed investors will ultimately depend on individual circumstances. For a zero taxed pension investor, we currently estimate that the buy-back will be worth approximately 8% more than selling Telstra into the market, assuming the buy-back goes off at the maximum allowable 14% discount to market price.