Telstra has completed a $1 billion off-market share buyback.

Under the buyback, which was announced on August 14, the company bought back about 217.4 million shares or 1.75 per cent of Telstra's issued shares.

The buy-back price was $4.60 per share, which represents a discount to the market price of 14 per cent.

Telstra chief executive, David Thodey, said there had been a very strong demand for the buy-back, resulting in an oversubscription and need for a scale back to be applied.

"We are very pleased with the demand and the result, which has enable us to return surplus capital to shareholders in an efficient way to that we expect will have a positive impact on earnings per share," he said.

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According to a company statement, due to the strong demand for the buy-back, a 69.70 per cent scale back of tenders was required.

"Subject to exclusions, shareholders who tendered their shares at a 14 per cent tender discount to the market price and or as a final price tender will have a priority allocation of 925 shares bought back before the scale is applied," the statement said.

"Successful shareholders who tendered all of their shares at a 14 per cent tender discount to the market price and or as a final price tender and who would be left with 370 shares of less as a result of the priority allocations and scale back, will have all of their shares bought back in full."

Shares tendered at discount less than or equal to 13 per cent and tender conditional upon a minimum price above the buyback price were not bought back.

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Payment via direct credit for shares bought under the buyback will start on October 14.

Shares that have been tendered but not bought back are expected to be released to shareholders on Monday October 6.

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