The off-market buyback was completed on Monday morning with the company buying about 217.4 million shares, or 1.8 per cent of Telstra's stock, at $4.60 a share. This represented a discount to the market price of 14 per cent.

The final price of the buyback comprised a capital component of $2.33 a a fully-franked dividend of $2.27.

Telstra chief executive David Thodey said such was the demand for the buyback that the company had to scale back 69.9 per cent of the tenders.

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

The scale back means that shareholders who offered to sell their shares at a 14 per cent discount, or who offered to sell shares at the final tender price, receive a priority allocation of 925 shares bought back before the scale back is applied.

Sharesholders in this category who are left with 370 shares or less following the priority allocation buyback will have their shares bought back in full.

But shareholders who tendered at discounts less than or equal to 13 per cent and tenders that were conditional on minimum price above the final price did not have their shares bought back, the company said in a statement.

The terms of the buyback offer and the large fully franked dividend were seen as being particularly attractive to self-managed super fund members, particularly those in the pension phase who are on a zero tax rate.

While this seemingly ruled out most institutions, Telstra insisted they would benefit from higher earnings per share as the number of shares on issue fell.

Telstra is one of the most widely held companies on the ASX. The buyback was open to all of its 1.4 million shareholders, which include mums, dads and institutional investors, on the proviso they sold at least 925 shares.

Investors who wanted to take part had to indicate what price they were willing to sell shares back at, choosing between 6 per cent and 14 per cent discount on market price.

The company's shares closed up 1¢, or 0.2 per cent on Monday at $5.40.

After completing the buyback, Telstra still holds between $4.6 billion and $5.1 billion of cash in its war chest.

While the telco giant has indicated that it wants to grow its presence in Asia, some investors are keen to see further capital management initiatives rolled out.

Perennial Value Management managing director John Murray, whose fund holds the fifth largest stake in Telstra, said last week that "given the strong balance sheet and cash flows, we would expect that Telstra may well have surplus funds to distribute in the future.

"However, we think that it is equally important that the company continues to invest to entrench and maintain its dominant position and to generate future growth opportunities.

Citi analyst Justin Diddams has previously said Telstra was right to be conservative about its capital management "given the uncertainties around government policy on NBN, potential escalation in mobile competition, potential unknowns in the fixed broadband and voice calling markets about where margins end up in an NBN situation".