<PAGE>
---------------------------------------------------------------------

U.S. Securities and Exchange Commission
Washington, D.C. 20549
-------------------------------------------

                                Form  10-Q

(Mark one)

-------------------------------------------
[x]  Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
-------------------------------------------

or
-------------------------------------------

[  ]  Transition Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from     to
-------------------------------------------

Commission File Number 1-8612


                           Ameritech Corporation
                                     
                                     
                                           
                                           -----------------------------
                                           A Delaware Corporation
                                           -----------------------------
                                           30 S. Wacker Drive
                                           Chicago, Illinois  60606
                                           -----------------------------
                                           I.R.S. Employer Identification
                                           Number 36-3251481
                                           
                                           
                                           Telephone number   (800) 257-0902





We have filed all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of 1934 during the preceding 12 months, and
have been subject to those filing requirements for the past 90 days.

Yes     X   No
      ----     ----

At July 31, 1998, 1,102,393,709 common shares were outstanding.


<PAGE>i
                             TABLE OF CONTENTS
                                     
                                  PART I
                                     
ITEM                                                             Page
----                                                             ----

 1.  Financial Statements
       Condensed Consolidated Statements of Income for
          the three and six months ended June 30, 1998 and 1997      1
  
  
       Condensed Consolidated Balance Sheets as of
          June 30, 1998 and December 31, 1997                        2
  
  
       Condensed Consolidated Statements of Cash Flows for
          the six months ended June 30, 1998 and 1997                3
  
  
       Notes to Condensed Consolidated Financial Statements         4-7
  
  
 2.  Management's Discussion and Analysis of Financial
        Condition and Results of Operations                        8-26
  
  
 3.  Quantitative and Qualitative
        Disclosures about Market Risk                               27
  
                                     
                                  PART II
                                     
  
 4.  Submission of Matters to a Vote of Security Holders            28
  
  
 6.  Exhibits and Reports on Form 8-K                               28
 
     Glossary                                                     30-31
  
                                     
                                     
                                     i
                                     

<PAGE>1

                       Item 1 - Financial Statements
                       -----------------------------
                  AMERITECH CORPORATION AND SUBSIDIARIES
                                     
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (Dollars in millions, except per share amounts)
                                (Unaudited)
                                     
                                     
                                   Three Months Ended    Six Months Ended
                                        June 30               June 30
                                    ---------------       ---------------
                                    1998       1997       1998       1997
                                    ----       ----       ----       ----

Revenues
  Local service................. $ 1,739    $ 1,651    $ 3,421    $ 3,237
  Interstate network access.....     630        649      1,244      1,269
  Intrastate network access.....     169        155        309        304
  Long distance service ........     341        345        682        703
  Cellular, directory and other.   1,410      1,186      2,766      2,332
                                 -------    -------    -------    -------
                                   4,289      3,986      8,422      7,845
                                 -------    -------    -------    -------
Operating expenses
  Employee-related expenses.....   1,012        962      2,054      1,952
  Depreciation and amortization.     672        618      1,335      1,229
  Other operating expenses......   1,290      1,215      2,551      2,406
  Restructuring charge..........      --         --        104         --
  Taxes other than income taxes.     151        150        309        305
                                 -------    -------    -------    -------
                                   3,125      2,945      6,353      5,892
                                 -------    -------    -------    -------
Operating income................   1,164      1,041      2,069      1,953
Interest expense................     148        123        322        248
Other (income) expense, net.....  (1,627)         14    (1,678)       (51)
                                 -------    -------    -------    -------
Income before income taxes......   2,643        904      3,425      1,756
Income taxes....................     936        367      1,225        683
                                 -------    -------    -------    -------
Net income...................... $ 1,707    $   537    $ 2,200    $ 1,073
                                 =======    =======    =======    =======
Earnings per common share*
 Basic..........................   $1.55      $0.49      $2.00      $0.98
                                 =======    =======    =======    =======
 Diluted........................   $1.54      $0.49      $1.98      $0.97
                                 =======    =======    =======    =======
Dividends declared per common
 share*.........................   $0.30    $0.2825      $0.60    $ 0.565
                                 =======    =======    =======    =======
                                     
                                     
*Per share amounts for 1997 have been restated for two-for-one stock
 split effective December 31, 1997.
                                     
                                     
                                     
                                     
                                     
See Notes to Condensed Consolidated Financial Statements.

                                     
                                     1
                                     


<PAGE>2

                 AMERITECH CORPORATION AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          (Dollars in millions)
                                    
                                          June 30, 1998  Dec. 31, 1997
                                         --------------  -------------
                                            (Unaudited)  (Derived from
                                                            Audited
                                                           Financial
                                                          Statements)
ASSETS

Current assets
 Cash and temporary cash investments........  $    280       $   239
 Receivables, net...........................     3,008         3,078
 Installment receivable from
   TCNZ share sale..........................       884            --
 Material and supplies......................       348           290
 Prepaid and other..........................       614           942
                                               -------       -------
                                                 5,134         4,549
                                               -------       -------
Property, plant and equipment...............    35,475        34,391
 Less, accumulated depreciation.............    21,450        20,518
                                               -------       -------
                                                14,025        13,873
                                               -------       -------
Investments, primarily international........     4,426         1,751
Other assets and deferred charges...........     5,460         5,166
                                               -------       -------
Total assets................................  $ 29,045      $ 25,339
                                               =======       =======
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
 Debt maturing within one year..............  $  1,281       $ 3,036
 Accounts payable...........................     1,928         1,955
 Other......................................     3,103         2,250
                                               -------       -------
                                                 6,312         7,241
                                               -------       -------
Long-term debt..............................     7,013         4,610
                                               -------       -------
Deferred credits and other long-term liabilities
 Accumulated deferred income taxes..........     1,310         1,150
 Unamortized investment tax credits.........       128           140
 Postretirement benefits
   other than pensions......................     2,963         2,965
 Other......................................     1,244           925
                                               -------       -------
                                                 5,645         5,180
                                               -------       -------
Shareowners' equity
 Common stock, par value $1; 2.4 billion
   shares authorized, 1,177 million issued in
     1998 and 1997..........................     1,177         1,177
 Proceeds in excess of par value............     5,438         5,313
 Reinvested earnings........................     5,729         4,190
 Treasury stock, at cost (76 million shares
   in 1998 and 74 million shares in 1997)...    (1,654)       (1,645)
 Deferred compensation......................      (114)         (190)
 Accumulated other comprehensive income.....      (501)         (537)
                                               -------       -------
                                                10,075         8,308
                                               -------       -------
Total liabilities and shareowners' equity...  $ 29,045      $ 25,339
                                               =======       =======

See Notes to Condensed Consolidated Financial Statements.

                                    
                                 Page 2
                                    


<PAGE>3

                 AMERITECH CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollars in millions)
                               (Unaudited)
                                                    Six Months Ended
                                                        June 30
                                                    -------------
                                                  1998         1997
                                                  ----         ----
Cash Flows from Operating Activities
Net income...................................  $ 2,200      $ 1,073
 Adjustments to net income
  Restructuring charge, net of tax...........       64           --
  Depreciation and amortization..............    1,335        1,229
  Deferred income taxes, net.................      131           45
  Investment tax credits, net................      (12)         (15)
  Capitalized interest.......................      (14)         (13)
  Change in accounts receivable, net.........       70           38
  Change in material and supplies............      (77)         (11)
  Change in certain other current assets.....     (143)          26
  Change in accounts payable.................      (27)         (98)
  Change in certain other current
   liabilities...............................      912          209
  Change in certain other noncurrent
    assets and liabilities...................     (444)        (135)
  Gain on sale of TCNZ shares................   (1,543)          --
  Other operating activities, net............       86           32
                                               -------      -------
Net cash from operating activities...........    2,538        2,380
                                               -------      -------
Cash Flows from Investing Activities
Capital expenditures.........................   (1,392)      (1,184)
Additional investments, principally
 Tele Danmark................................   (3,173)         (90)
Proceeds from repayment of GEIS note.........      473           --
Proceeds from TCNZ
    share repurchase.........................       --           89
Proceeds from sale
    of TCNZ shares...........................    1,078           --
Other investing activities, net..............       17          (17)
                                               -------      -------
Net cash from investing activities...........   (2,997)      (1,202)
                                               -------      -------
Cash Flows from Financing Activities
Net change in short-term debt................   (1,519)        (343)
Issuance of preferred stock by subsidiary....      322          250
Issuance of long-term debt...................    2,500           --
Retirement of long-term debt.................     (244)        (241)
Dividend payments............................     (659)        (622)
Proceeds from reissuance of treasury stock...      233          196
Repurchase of common stock...................     (133)        (282)
Other financing activities, net..............       --           27
                                               -------      -------
Net cash from financing activities...........      500       (1,015)
                                               -------      -------
Net increase in cash and temporary
 cash investments............................       41          163
Cash and temporary cash investments,
 beginning of period.........................      239          145
                                               -------      -------
Cash and temporary cash investments,
 end of period...............................  $   280      $   308
                                               =======      =======

See Notes to Condensed Consolidated Financial Statements.
                                    
                                 Page 3
                                    

<PAGE>4

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                            JUNE 30, 1998
                                  

Note 1:  Preparation of Interim Financial Statements

We have prepared the unaudited condensed consolidated financial
statements in this report by following Securities and Exchange
Commission rules that permit reduced disclosure for quarterly period
reports.  These financial statements include estimates and
assumptions that affect the reported amounts of assets and
liabilities and the amounts of revenues and expenses.  Actual amounts
could differ from those estimates.  We believe these statements
include all adjustments necessary for a fair statement of results for
each period shown.  We believe our disclosures are adequate to make
the presented information clear.  You should read these financial
statements in conjunction with the financial statements and notes
included in our 1997 Annual Report on Form 10-K and the quarterly
report on Form 10-Q previously filed in 1998.

When reading these financial statements, you should be familiar with
the terminology unique to our business.  We have defined a number of
terms in the glossary on pages 30 and 31.


Note 2:  Sale of Investment in Telecom Corporation of New Zealand
         Limited

In April 1998, we sold substantially all of our stake in Telecom
Corporation of New Zealand (New Zealand Telecom or TCNZ) in a global
stock offering. We sold a total of 436,970,670 shares in the form of
either ordinary shares or American Depositary Shares (ADSs), with
each ADS representing eight ordinary shares. We will receive payment
for the sale in two installments.  The first payment was received in
April 1998 and the second is due by March 31, 1999. Payment for
shares will be made in New Zealand dollars (or in Australian dollars
for those sold in an Australian offering), while payment for ADSs
will be made in U.S. dollars.

At the time of the first installment payment, we irrevocably
transferred our shares to a trustee, which is holding the shares in
trust for the purchasers until the final installment is paid. We have
retained a security interest in the shares and each purchaser remains
personally liable until the final installment payment is received.
The purchasers will receive all ordinary dividends in the interim
period. The trustee will have one vote for each share, and will vote
the shares based on instructions from the purchasers.

In accordance with FAS 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," we accounted
for this transaction as a sale and recorded an after-tax gain of
approximately $1.0 billion in the second quarter of 1998.  Because
the receivable from the second installment payment does not have a
stated interest rate, we are imputing interest at 9%. Based on
current exchange rates and the purchase price for the shares, we
expect to receive total net proceeds of approximately $2.1 billion.
Net proceeds from the initial installment were approximately $1.1
billion, which we used to pay down short-term debt balances and for
general corporate purposes.  We have hedged substantially all foreign
exchange risk associated with the final installment.



                               Page 4
                                  
<PAGE>5

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                            JUNE 30, 1998
                                  

Note 3:  Comprehensive Income

On January 1, 1998, we adopted Statement of Financial Accounting
Standards (FAS) 130, "Reporting Comprehensive Income."  This
statement established standards for reporting and display of
comprehensive income and requires that all components of
comprehensive income be reported in annual financial statements
having the same prominence as other financial statements.

Comprehensive income for the three and six months ended June 30, 1998
and 1997 is as follows:
                                Three Months Ended    Six Months Ended
                                     June 30               June 30
                                 ---------------       ---------------
                                1998        1997       1998       1997
                                ----        ----       ----       ----

Net income................... $ 1,707    $   537    $ 2,200    $ 1,073
Foreign currency translation
   adjustment................      71        (81)       (43)      (225)
Unrealized gain (loss) on
   available-for-sale
   securities................      23         --         23         --
Reclassification adjustment to
   net income for cumulative
   translation adjustment on
   TCNZ shares sold..........      56         --         56         --
                              -------    -------    -------    -------
Comprehensive income......... $ 1,857    $   456    $ 2,236    $   848
                              =======    =======    =======    =======
Our foreign operations and investments in international ventures are
subject to certain risks related to fluctuation in foreign currency
exchange rates.  Foreign exchange transaction gains and losses
incurred by wholly owned subsidiaries impact operating income, while
transaction gains and losses incurred by other international ventures
(primarily equity method investments) impact other income, net.
Translation adjustments result in a change in the investment balance
and a corresponding change in accumulated comprehensive income in the
consolidated balance sheet.  The change is negative when the U.S.
dollar strengthens against the local currency.

FAS 130 requires disclosure of the tax effects related to the
components of comprehensive income.  The deferred tax effect of the
unrealized gain on available-for-sale securities for the three and
six months ended June 30, 1998 was $13 million.  We do not recognize
deferred income taxes on foreign currency translation adjustments.


Note 4:  Restructuring Charge

In March 1998, we announced plans to significantly reduce future
operating expenses by the end of 2002.  As part of this cost
containment program, we recorded a pretax restructuring charge of
$104 million ($64 million after-tax or $0.06 per share) in March 1998
to cover principally the costs of consolidating security monitoring
centers and closing 53 company-owned cellular retail stores.  The
charge includes employee-



                               Page 5
                                  
<PAGE>6

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                            JUNE 30, 1998
                                  

Note 4:  Restructuring Charge (cont'd.)

related costs (principally severance) of approximately $54 million
for the termination of the employment of approximately 5,000
employees, as well as other costs of approximately $50 million
related to lease terminations and asset write-downs.  We have
accounted for the employee costs of the restructuring charge in
accordance with our existing severance plans and following FAS 112,
"Employers' Accounting for Postemployment Benefits."  We have
accounted for the other costs in the restructuring charge in
accordance with existing accounting literature for restructurings.
The charge does not include approximately 550 employees identified
for termination when we acquired certain security services assets in
1997.  We included the cost of terminating the employment of these
employees in our purchase price.

Approximately 480 employees left Ameritech in the second quarter of
1998 as part of this restructuring program.  Termination costs
related to these employees were approximately $7 million, resulting
in an accrual balance of approximately $97 million remaining as of
June 30, 1998.


Note 5:  Strategic Partnership with Tele Danmark A/S

In January 1998, we purchased a 34% interest in Tele Danmark A/S, the
national communications provider in Denmark, from the Kingdom of
Denmark for approximately $3.1 billion. As part of our investment
agreement, Tele Danmark agreed to repurchase and retire all remaining
shares owned by the Danish government. When this repurchase was
consummated by the Kingdom in April 1998, our equity ownership
increased to approximately 42% of Tele Danmark.

We funded this investment in part by issuing $1.75 billion of long-
term debt issued in the United States and $750 million of additional,
unsecured Eurodollar notes.  We incurred a charge in January 1998 of
$54 million ($34 million after-tax) resulting from a mark-to-market
adjustment for foreign exchange forward contracts.  Current SEC
accounting interpretations do not permit hedge accounting for planned
acquisitions.

The audited 1997 financial statements of Tele Danmark reflect, on a
U.S. GAAP basis, total assets of $7.4 billion and revenues of $3.6
billion. We account for this investment using the equity method of
accounting.


Note 6:  Earnings Per Share

We compute basic earnings per common share by dividing net income by
the weighted average number of common shares outstanding during the
periods.  We calculate diluted earnings per share by including all
dilutive potential common shares such as stock options.  No
adjustment to reported net income is required when computing diluted
earnings per share.

                                  
                               Page 6
                                  
<PAGE>7

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  
                            JUNE 30, 1998
                                  

Note 6:  Earnings Per Share (cont'd.)

The following represents the average common shares outstanding and
dilutive potential common shares for the periods indicated:

                                Three Months Ended    Six Months Ended
                                     June 30               June 30
                                 ---------------       ---------------
                                 1998       1997       1998       1997
                                 ----       ----       ----       ----
Average common shares
  outstanding (000s)....... 1,101,153  1,099,948  1,100,405  1,100,498
Dilutive potential common
  shares (000s)............     9,104      4,679      8,944      4,434
                            ---------  ---------  ---------  ---------
Average shares with
  dilution (000s).......... 1,110,257  1,104,627  1,109,349  1,104,932
                            =========  =========  =========  =========

Note 7:  Preferred Stock Issuance by Subsidiary

On April 20, 1998, Ameritech Denmark Funding Corporation (Denmark
Funding), an Ameritech subsidiary, issued through a private placement
3,250 shares of stated rate auction preferred stock (STRAPS) in four
separate series. Net proceeds from these issuances totaled $322
million. Dividends accrue on each series of STRAPS at varying rates,
which are adjusted periodically through separate auctions on each
series. Dividends are cumulative from the date of issuance. The
initial dividend rates and payment dates for each series are as
follows:
                                             Initial Dividend
                     Initial Dividend Rate     Payment Date
                     ---------------------     ------------
Series A (800 shares)        4.100%             June 10, 1998
Series B (800 shares)        4.100%             June 17, 1998
Series C (800 shares)        4.125%             July 1, 1998
Series D (850 shares)        4.125%             July 8, 1998

Denmark Funding may redeem the shares on the last day of any dividend
period at a value of $100,000 per share plus accrued dividends. The
shares are not subject to mandatory redemption at the option of the
holder, nor is there a redemption premium on any shares.


Note 8:  Merger Agreement

On May 11, 1998, we jointly announced with SBC Communications Inc.
(SBC) a definitive agreement to merge an SBC subsidiary with
Ameritech in a transaction in which each share of Ameritech common
stock will be converted into and exchanged for 1.316 shares of SBC
common stock.  After the merger, Ameritech will be a wholly owned
subsidiary of SBC.  The transaction was approved by the Board of
Directors of each company and is intended to be accounted for as a
pooling of interests and to be a tax-free reorganization.  The merger
is subject to the satisfaction of certain conditions and regulatory
approvals as well as approval by the shareowners of each company.


Note 9:  Reclassifications

We have made reclassifications to certain 1997 balances to correspond
to the presentation as of June 30, 1998.

                                  
                               Page 7
                                  

<PAGE>8

          Item 2 - Management's Discussion and Analysis of
            Financial Condition and Results of Operations
                    -----------------------------
               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
         THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1998 vs.
           THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997
                                  
RESULTS OF OPERATIONS
---------------------
Results of operations for the three and six months ended June 30,
1998 include a pretax gain of $1.5 billion ($1.0 billion after-tax or
$0.91 per diluted share) resulting from the public sale of
substantially all of our stake in Telecom Corporation of New Zealand
Limited (TCNZ).

Results of operations for the six months ended June 30, 1998 include
a one-time, pretax charge of $104 million ($64 million after-tax or
$0.06 per share) for restructuring related to our recently announced
cost containment program, as well as a one-time pretax charge of $54
million ($34 million after-tax, or $0.03 per share) for a currency-
related fair-value adjustment in conjunction with our January 1998
investment in Tele Danmark.

Results for the three and six months ended June 30, 1997 include an
$87 million after-tax charge ($0.08 per share) related to our share
of the costs of a work force restructuring at Belgacom, the national
communications company of Belgium.

Results for the three and six months ended June 30, 1998, compared
with the prior year period, were as follows (dollars in millions,
except per share amounts):

Three Months Ended June 30                          Increase  Percent
--------------------------
                                 1998      1997    (Decrease)  Change
                                 ----      ----     --------   ------
Income before one-time items  $  695     $  624     $   71     11.4
EPS before one-time items
  Basic                         0.63       0.57       0.06     10.5
  Diluted                       0.63       0.57       0.06     10.5
Net income                     1,707        537      1,170    217.9
Earnings per share
  Basic                         1.55       0.49       1.06    216.3
  Diluted                       1.54       0.49       1.05    214.3


Six Months Ended June 30                            Increase  Percent
------------------------
                                 1998      1997    (Decrease)  Change
                                 ----      ----     --------   ------
Income before one-time items  $1,286     $1,160     $  126     10.8
EPS before one-time items
  Basic                         1.17       1.05       0.12     11.4
  Diluted                       1.16       1.05       0.11     10.5
Net income                     2,200      1,073      1,127    105.0
Earnings per share
  Basic                         2.00       0.98       1.02    104.1
  Diluted                       1.98       0.97       1.01    104.1


                               Page 8
                                  

<PAGE>9

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Revenues
--------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $4,289     $3,986     $  303      7.6
Six Months Ended               8,422      7,845        577      7.4

Revenues increased for the three and six months ended June 30, 1998
primarily due to increased revenues from call management services as
well as higher network usage volumes and increases in the number of
cellular, paging and security services customers.  Decreased revenues
from network access and long distance services partially offset these
increases, as discussed below.

---------------------------------------------------------------------
Local service
-------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,739     $1,651     $   88      5.3
Six Months Ended               3,421      3,237        184      5.7

Local service revenues include basic monthly service fees and usage
charges, fees for call management services, installation and
connection charges, certain data services and most public phone
revenues.  Local service revenues increased for the three and six
months ended June 30, 1998 due largely to increased sales of call
management services.  Revenues from call management services
increased 21% over the prior year period, due to strong growth in
both the number of activated features and usage of services on a pay-
per-use basis.  Higher network usage volumes, resulting primarily
from increased demand for data transport and Internet access
services, combined with access line growth of 4.1% over the prior
year period, also contributed to the increases.

There were 20,835,000 access lines in service as of June 30, 1998
compared with 20,018,000 as of June 30, 1997 (restated to standardize
counting of voice-grade equivalent lines).

---------------------------------------------------------------------
Network access
--------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Interstate
----------

Three Months Ended            $  630     $  649     $ (19)     (2.9)
Six Months Ended               1,244      1,269       (25)     (2.0)

Intrastate
----------

Three Months Ended            $  169     $  155     $   14      9.0
Six Months Ended                 309        304          5      1.6

Network access revenues include fees charged to interexchange
carriers that use our local landline communications network to
connect customers to their long distance networks.  In addition, end
users pay flat rate access fees to connect to the long distance
networks.  These revenues result from both interstate and intrastate
services.

                                  
                               Page 9
                                  

<PAGE>10

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Network access (cont'd.)
------------------------

Interstate network access revenues decreased for the three and six
months ended June 30, 1998 due primarily to rate reductions related
to access charge reform effective July 1, 1997, as well as a change
in reporting classification of certain payphone revenues received
from interexchange carriers (IXCs) for their customers' use of our
pay phones.  This change in classification decreased interstate
network access revenues and increased other miscellaneous revenues
by approximately $38 million in the second quarter of 1998 compared
with the prior year, and by approximately $53 million for the six
months ended June 30, 1998 compared with the same period in 1997.
Growth in the volume of calls handled for interexchange carriers
and greater demand for dedicated services by Internet service
providers and other high-capacity users partially offset the
decreases.  Interstate minutes of use increased by 6.7% for the
three months and 6.5% for the six months ended June 30, 1998
compared with the same periods last year.

Intrastate network access revenues increased for the three and six
months ended June 30, 1998 due primarily to a favorable ruling in
Michigan which resulted in additional revenues of about $20 million
in the second quarter of 1998.  Volume increases, largely resulting
from growth in network usage by alternative providers of intraLATA
toll service in Illinois, Michigan and Wisconsin, also contributed
to the increases.  Rate reductions related to access charge reform
effective in July 1997, as well as a change in reporting
classification of certain pay phone revenues from network access to
other revenues, partially offset these increases.  The change in
classification of pay phone revenues decreased intrastate network
access revenues by approximately $3 million in the second quarter
of 1998 compared with the prior year, and by approximately $9
million for the six months ended June 30, 1998 compared with 1997.
Intrastate minutes of use increased by 12.1% for the three months
and 12.6% for the six months ended June 30, 1998 compared with the
same periods last year.


---------------------------------------------------------------------
Long distance service
---------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  341     $  345     $  (4)     (1.2)
Six Months Ended                 682        703       (21)     (3.0)

Long distance service revenues result from customer calls to
locations outside of their local calling areas but within the same
local access and transport area (LATA).

Long distance service revenues decreased for the three and six
months ended June 30, 1998, due primarily to volume decreases.  The
volume decreases resulted largely from implementation of Dial 1+
capability in Illinois, Michigan and Wisconsin, which increased
competition in these intraLATA toll markets.  In addition, other
carriers are moving to retain revenue from their customers' use of
intraLATA toll calling services, where previously they had allowed
us to provide these services in exchange for access charge payments
to them.  Although we no longer earn these revenues, we also no
longer incur the related access charge expenses.

                               Page 10
                                  

<PAGE>11

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Cellular, directory and other
-----------------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,410     $1,186     $  224     18.9
Six Months Ended               2,766      2,332        434     18.6

Cellular, directory and other revenues include revenues from cellular
communications services, paging services, telephone directory
publishing, lease financing and billing and collection services,
telephone equipment sales and installation, and security services.

Cellular, directory and other revenues increased for the three and
six months ended June 30, 1998, due to the following factors:

- Increased revenues from security services, resulting primarily from
  strong customer growth.  Total customers increased to 1,119,000 as
  of June 30, 1998, reflecting internal growth of 18% in the second
  quarter on an annualized basis and the inclusion of our
  acquisitions in October 1997 of the security assets of Rollins
  Protective Services and Republic Security Company Holdings;
- Higher wireless revenues resulting from strong growth in the number
  of cellular and paging subscribers compared with the same period
  last year.  We had 3.5 million total cellular subscribers, compared
  with 2.9 million in the comparable prior year period, and 1.6
  million paging customers, compared with 1.3 million last year;
- Increased directory revenues, resulting primarily from a revised
  directory agreement for Illinois and parts of Indiana, as well as
  price increases and higher revenues from our Internet yellow pages
  service; and,
- Other miscellaneous revenue increases resulting primarily from
  increased revenues from capital services, cable TV and voice
  messaging.  A change in reporting classification of certain pay
  phone revenues from network access to other revenues also
  contributed to the increase, as previously discussed.

---------------------------------------------------------------------
Operating expenses
------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $3,125     $2,945     $  180      6.1
Six Months Ended               6,353      5,892        461      7.8

Operating expenses increased for the three and six months ended June
30, 1998 due primarily to higher operating costs in growth
businesses, including cellular and security services, as well as
increased employee-related costs and depreciation expense resulting
from overall business growth.  Decreased operating expenses at the
landline communications subsidiaries, resulting primarily from
increased productivity and operating efficiencies, partially offset
the increases.
                                  
                               Page 11
                                  

<PAGE>12

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Employee-related expenses
-------------------------

                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,012     $  962     $   50      5.2
Six Months Ended               2,054      1,952        102      5.2

Employee-related expenses increased for the three and six months
ended June 30, 1998, due primarily to higher wage and bonus rates and
overtime expenses at the landline communications subsidiaries,
combined with higher employee levels at emerging and growth
businesses.  Higher benefit expenses and payroll taxes also
contributed to the increases.

During June 1998, the International Brotherhood of Electrical Workers
(IBEW) ratified a new five-year contract effective June 28, 1998.
The contract provides basic wage increases of 11.2% (compounded) over
three years.  In addition, the contract addresses benefits, pensions,
work rules and other wage-related items.  The contract will be re-
opened in 2001 to address certain economic wage issues for the final
two years of the contract.

The Communications Workers of America (CWA) have reached similar
terms under an agreement ratified by union membership on July 17,
1998.  The CWA contract is effective August 9, 1998 and expires on
March 31, 2001.  The contract provides basic wage increases of 11.2%
(compounded) over the contract period, and also addresses benefits,
pensions, work-rules and other wage-related items.

The IBEW represents approximately 12,000 employees in Illinois and
northwest Indiana, while the CWA represents approximately 28,000
employees in all five states of our region.

We employed 72,342 people as of June 30, 1998, compared with 67,764
as of June 30, 1997.  More than 70% of the increase is attributable
to expansion of our security services business.

---------------------------------------------------------------------
Depreciation and
  amortization
------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  672     $  618     $   54      8.7
Six Months Ended               1,335      1,229        106      8.6

Depreciation and amortization expense increased for the three and six
months ended June 30, 1998 due primarily to higher property, plant
and equipment balances.  Higher depreciation rates on certain asset
categories contributed to the increases, as we used shorter
depreciable lives for newer technologies.  Amortization of goodwill
and other intangibles resulting from our asset acquisitions in
security services also contributed to the increase.
                                  
                               Page 12
                                  

<PAGE>13

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Other operating expenses
------------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $1,290     $1,215     $   75      6.2
Six Months Ended               2,551      2,406        145      6.0

Other operating expenses increased for the three and six months ended
June 30, 1998 due primarily to higher access charge expenses
resulting from state commission rulings (which we are contesting)
requiring local exchange carriers to pay reciprocal compensation for
calls by their customers to the Internet via Internet service
providers (ISPs) who, in turn, are customers of competing local
exchange carriers.  We have set aside approximately $88 million in
segregated funds pending final resolution of these disputes.

Higher cost of sales due to growth-related customer increases at the
cellular and security services operations and increased sales of
customer premises equipment also contributed to the increases.  A
decrease in right-to-use fees for switching system software, combined
with decreases in contract services expenses and material costs,
partially offset these increases.


---------------------------------------------------------------------
Restructuring charge
--------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $   --     $   --     $   --    n/a
Six Months Ended                 104         --        104    n/a

In March 1998, we announced plans to significantly reduce future
operating expenses by the end of 2002.  As part of this cost
containment program, we recorded a pretax restructuring charge of
$104 million ($64 million after-tax or $0.06 per share) in March 1998
to cover the costs of consolidating security monitoring centers and
closing 53 company-owned cellular retail stores.  The charge covers
employee-related costs of approximately $54 million for the
termination of the employment of approximately 5,000 employees, as
well as other costs of approximately $50 million related to lease
terminations and asset write-downs.

A significant number of employees whose employment relationship is to
be severed (approximately 3,200) are employed by our security
services subsidiary.  These employees are being displaced due
principally to the consolidation of our 24 monitoring centers to four
centers.  Staffing requirements at these new locations will require
the hiring of a significant number of new employees.

Approximately 480 employees left Ameritech in the second quarter of
1998 as part of this restructuring program.



                                  
                               Page 13
                                  

<PAGE>14

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Taxes other than income taxes
-----------------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  151     $  150     $    1      0.7
Six Months Ended                 309        305          4      1.3

Taxes other than income taxes consist of property taxes, gross
receipts taxes and other taxes not directly related to earnings.
Taxes other than income taxes increased for the three and six months
ended June 30, 1998 primarily as a result of higher property taxes,
principally in Michigan, combined with higher gross receipts taxes,
principally in Ohio.  Lower capital stock taxes in Illinois,
resulting from tax reform, partially offset these increases.

---------------------------------------------------------------------
Other income and expenses
-------------------------
Interest expense
-----------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  148     $  123     $   25     20.3
Six Months Ended                 322        248         74     29.8

Interest expense increased for the three and six months ended June
30, 1998, due primarily to higher overall debt balances resulting
from our $3.1 billion investment in Tele Danmark in January 1998.  We
funded this investment in part by issuing $2.5 billion in long-term
debt.  Lower interest on short-term debt, resulting primarily from a
reduction in short-term debt balances following the sale of
substantially all of our TCNZ shares, partially offset these
increases.

---------------------------------------------------------------------
Other (income) expense, net
---------------------------
                                                      Change
                                      June 30        (Income) Percent
                                  ------------
(dollars in millions)            1998      1997      Expense   Change
 -------------------             ----      ----      -------   ------

Three Months Ended            $(1,627)   $   14     $(1,641)  n/m
Six Months Ended               (1,678)     (51)      (1,627)  n/m

Other income includes earnings related to Ameritech's investments
accounted for using the equity method, interest income and other
nonoperating items.

Other income increased for the three and six months ended June 30,
1998 due primarily to the effects of a one-time pretax gain of $1,543
million ($1,012 million after-tax) resulting from the public sale of
substantially all of our stake in TCNZ.  A one-time pretax charge of
$54 million ($34 million after-tax), recorded in the first quarter of
1998 for a currency-related fair value adjustment related to our Tele
Danmark investment, partially offset the increase for the six months
ended June 30, 1998.



                                  
                               Page 14
                                  
<PAGE>15

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Other (income) expense, net (cont'd.)
-------------------------------------

Other income for the three and six months ended June 30, 1997
includes an $87 million after-tax charge related to our share of the
costs of a work force restructuring at Belgacom, the national
communications company of Belgium.

After eliminating the effects of the above described one-time items,
other income was $84 million for the three months and $189 million
for the six months ended June 30, 1998.  Similarly, other income was
$73 million for the three months and $138 for the six months ended
June 30, 1997.  The increase in 1998 resulted primarily from
international growth in the first quarter and additional interest
income throughout 1998.

---------------------------------------------------------------------
Income taxes
------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  936     $  367     $  569    155.0
Six Months Ended               1,225        683        542     79.4

Income tax expense increased for the three and six months ended June
30, 1998 due primarily to the tax impact of the gain resulting from
the sale of our TCNZ shares, discussed above.  The effective tax rate
was 35.4% for the three months and 35.8% for the six months ended
June 30, 1998.  The effective rates in the prior year periods were
40.6% and 38.9%, respectively.  The higher rates in 1997 resulted
primarily from the $87 million restructuring charge at Belgacom in
the second quarter, which received no additional tax benefit in the
United States.

---------------------------------------------------------------------

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
----------------------------------------------------
Capital expenditures
--------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  742     $  644     $   98     15.2
Six Months Ended               1,405      1,177        228     19.4

Capital expenditures increased for the three and six months ended
June 30, 1998, due primarily to increased spending at the landline
communications subsidiaries to meet increased demand for data
transport, custom calling, and private line services and to comply
with regulatory requirements.  Capital spending also increased due to
continued enhancement and expansion of the cellular network.

---------------------------------------------------------------------
Dividends declared
------------------
                                      June 30       Increase  Percent
                                  ------------
(dollars in millions)            1998      1997    (Decrease)  Change
 -------------------             ----      ----     --------   ------

Three Months Ended            $  331     $  312     $   19      6.1
Six Months Ended                 661        622         39      6.3

                                  
                               Page 15
                                  
<PAGE>16

               AMERITECH CORPORATION AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Dividends declared (cont'd.)
----------------------------

On June 17, 1998, our Board of Directors declared a quarterly
dividend of $0.30 per common share, a 6.2% increase over the $0.2825
per common share declared in the second quarter of 1997 (as adjusted
for the two-for-one stock split effective December 31, 1997), and at
the same rate as the dividend declared for the first quarter of 1998.

---------------------------------------------------------------------
Company stock repurchase program
--------------------------------

Our Board of Directors has periodically authorized management to
repurchase shares of Ameritech stock in the open market.  During the
six months ended June 30, 1998, we purchased 2.9 million shares of
stock for approximately $133 million.  Management has the authority
to repurchase approximately $1.9 billion of additional Ameritech
stock as of June 30, 1998.

---------------------------------------------------------------------
Debt ratio
----------
Our debt ratio was 45.2% as of June 30, 1998, compared with 47.9% as
of December 31, 1997.  The decrease resulted primarily from higher
overall equity levels due to additional earnings accumulation,
partially offset by higher debt levels attributable to our investment
in Tele Danmark.

---------------------------------------------------------------------
Cash flows
----------
During the six months ended June 30, 1998, cash flows from operations
increased by $158 million, reflecting solid growth in our business.
Investing activity increased by $1,795 million, reflecting our
January 1998 investment in Tele Danmark, combined with increased
capital expenditures previously discussed.  Proceeds from our sale of
TCNZ shares and repayment by General Electric Company of the note
related to our GEIS investment partially offset the increased
expenditures.  Financing activity for the six months ended June 30,
1998 included issuance of $2.5 billion of long-term debt and $325
million of preferred stock, primarily to finance our acquisition of
Tele Danmark.  Short-term debt decreased by $1.5 billion primarily
representing application of proceeds from our sale of TCNZ shares.
Financing activity also included dividend payments and stock
repurchases, as previously discussed.

We believe that in addition to our own internal cash flows from
operations, we have adequate external resources available to finance
our business development, network expansion, dividends and investment
opportunities.

---------------------------------------------------------------------
Ratio of earnings to fixed charges
----------------------------------
The ratio of earnings to fixed charges for the six months ended June
30 was 9.57 in 1998 and 6.83 in 1997.

                                  
                               Page 16
                                  

<PAGE>17

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
OTHER MATTERS
-------------

Competitive environment
-----------------------
The Telecommunications Act of 1996 (the "1996 Act") establishes a
national policy that calls for competition and open markets, rather
than regulatory management, as the basic industry business
environment.  This public policy change has further opened
opportunities for providers of all forms of communications services
and products, potentially enabling them to become either niche or
full-service providers of voice, video, data, local and long distance
services for their customers.

Technological developments, marketplace demand and legislative,
regulatory and judicial actions have expanded the types of services
and products available from an increasing number of companies,
creating growth opportunities within the global communications
industry.  Our competitive strategy includes positioning ourselves to
take advantage of such growth opportunities, by continuing to branch
into new services that are logical extensions of our business and by
exporting our expertise to customers around the world.

These same factors also have resulted in increasing competition in
all areas of our business.  In pursuing business opportunities both
inside and outside the United States, we compete against other local
service providers, long distance service providers, cable TV
companies, wireless and Internet service providers and other entrants
from a range of industries.  As we have expanded our paging and
cellular services, the number and type of competitors have grown.
Our telephone directory publishing business faces competition not
only from other directory publishing businesses and traditional
advertising media, such as television, radio, direct mail, magazines
and newspapers, but also providers of new technologies, such as
Internet and other online services.  Many of our competitors have
substantial scale and geographic scope, significant capital,
technological and marketing resources and wide-ranging service
offerings.

With the passage of the 1996 Act and other regulatory initiatives,
our local service markets have been more extensively opened to new
competitors, many of which are believed to have initially targeted
high-volume business customers in densely populated areas.
Interconnection agreements with competitive service providers require
our landline communications subsidiaries to provide interconnection
or access to unbundled network elements at cost-based rates and
telecommunications services at discounted, wholesale rates.  These
agreements and applicable tariffs may result in some downward
pressure on local service revenues, as a portion of our revenue
shifts from local service at retail prices to network access and
wholesale services at lower rates.

Although we cannot predict with certainty the impact that these and
other developments ultimately may have on our future business,
results of operations or financial condition, especially given the
type of legal and regulatory uncertainties described below, we
believe that over time market competition and regulatory change will
provide opportunities to accelerate growth, both domestically and
internationally.


                               Page 17
                                  

<PAGE>18

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations
-------------------------
The Telecommunications Act of 1996

In general, the 1996 Act includes provisions designed to open local
exchange markets to competition and afford the regional Bell
operating companies ("RBOCs") or their affiliates, the competitive
opportunity to provide interLATA (long distance) services.  Under the
1996 Act, the RBOCs' ability to provide in-region long distance
services is dependent upon their satisfaction of, among other
conditions, a 14 point "competitive checklist" of specific
requirements, including compliance with interconnection, network
element access and resale service obligations and related pricing
standards and provision of number portability, and their
demonstration that entry into the in-region long distance market
would be in the public interest.

A U.S. District Court in Texas ruled that certain line-of-business
restrictions in the 1996 Act, including the requirement in Section
271 that the RBOCs must comply with the competitive checklist before
being permitted to provide long distance services, constitute an
unconstitutional bill of attainder by virtue of their exclusive
applicability to the RBOCs.  Appeals of this decision by various
parties are pending before the U.S. Court of Appeals for the Fifth
Circuit, with the lower court decision stayed pending resolution of
such appeals.  These appeals were argued before the Fifth Circuit
Court of Appeals on July 9, 1998.

In two other cases, constitutional challenges to some of the
provisions of the 1996 Act governing the RBOCs have been presented to
the U.S. Court of Appeals for the District of Columbia Circuit (the
"D.C. Circuit Court").  In May 1998, the D.C. Circuit Court found
that Section 274 of the 1996 Act, covering electronic publishing
activities, did not constitute an unconstitutional bill of attainder.
The second action pending before the D.C. Circuit Court, in which we
have intervened, challenges the constitutionality of the long
distance provisions of Section 271 of the 1996 Act.  This case is
scheduled for oral argument in September 1998.

Local Interconnection and Unbundled Access

In July 1997, and in an October 1997 rehearing, the U.S. Circuit
Court of Appeals for the Eighth Circuit (the "Eighth Circuit Court")
vacated several provisions of an August 1996 FCC order regarding the
interconnection provisions of the 1996 Act (the "FCC Order"), ruling
that such provisions represented improper preemptions of state
authority or were inconsistent with statutory requirements of the
1996 Act.  The Eighth Circuit Court ruled, among other things, that:
the states have exclusive jurisdiction over the pricing for local
interconnection, unbundled network elements and local service resale
involving incumbent local exchange carriers ("ILECs") and competitive
local exchange carriers ("CLECs"); the FCC cannot lawfully allow
CLECs to "pick and choose" among isolated, individual provisions from
other interconnection agreements; and the FCC cannot require ILECs
either to recombine or "rebundle" unbundled network elements for
CLECs or to provide them with a preassembled network platform (or
existing combinations of two or more network elements) at network
element prices.  These rulings of the Eighth Circuit Court were
appealed by various parties, including the FCC.



                               Page 18
                                  

<PAGE>19

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations (cont'd.)
-----------------------------------
Local Interconnection and Unbundled Access (cont'd.)

The Eighth Circuit Court upheld certain aspects of the FCC Order.
These included, among other things:  the classification of
operational support services, operator services, directory assistance
and vertical services as unbundled network elements; the definition
of "technically feasible" interconnection to exclude economic
considerations; and the ability of CLECs to provide complete
telecommunications services by recombining network elements without
providing any of their own facilities.  We have appealed these
matters, among others.

The U.S. Supreme Court has agreed to review the Eighth Circuit Court
decision.  Oral arguments are scheduled for October 1998.

In August 1997, the FCC revised its local competition rules and
required ILECs to make available a new purported network element
known as "shared transport," which would include access to all of an
ILEC's transmission facilities.  We and other ILECs appealed this
matter to the Eighth Circuit Court.  On August 10, 1998, the Eighth
Circuit Court upheld the FCC's determination that shared transport is
a network element and that it should be made available by ILECs to
entrants on an unbundled basis.  We intend to seek judicial review of
this decision.

At present, local interconnection matters and unbundled network
element pricing continue to be resolved through interconnection
agreement negotiations or state commission arbitration provisions.
Our landline communications subsidiaries are continuing to negotiate
and enter into interconnection agreements and pursue, through
appropriate proceedings, timely recovery of the costs of providing
interconnection services so as to promote a fair competitive
environment, especially as local and long distance markets are opened
to competition at different times.  The outcome of these activities
is subject to significant legal and regulatory uncertainties, as
outlined above.

Reciprocal Compensation

A number of CLECs are engaged in regulatory and judicial proceedings
with various ILECs, including our landline communications
subsidiaries, with respect to the payment of reciprocal compensation
to the CLECs for calls originating on the ILECs' networks for dial-up
connections to access the Internet via ISPs served by the CLECs'
networks.  The CLECs have asserted that such reciprocal compensation
is provided for by interconnection agreements between the CLECs and
the ILECs.  Together with other ILECs, we have maintained that we are
not required to make such reciprocal compensation payments, because
such traffic is interstate access service, not local, and therefore
is not covered by applicable local interconnection agreements.

A U.S. District Court in Illinois has ruled that our Illinois
landline communications subsidiary will be required to make
reciprocal compensation payments in these circumstances under its
applicable interconnection agreements, but has issued a brief stay of
its order to permit an appeal.  Cases involving appeals by other
subsidiaries of adverse regulatory determinations are pending in U.S.
District Courts in Michigan and Wisconsin.  The issue of whether
reciprocal compensation is payable with respect to Internet traffic
also is pending before the FCC, in the context of a request for
expedited clarification of the issue filed in June 1997 by the
Association for



                               Page 19
                                  

<PAGE>20

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations (cont'd.)
-----------------------------------
Reciprocal Compensation (cont'd.)

Local Telecommunications Service.  We believe that reciprocal
compensation is not required in such circumstances, and that such
view ultimately will be upheld in pending or future appellate
judicial proceedings or through FCC determination.  However, there
can be no assurance as to that outcome or that our landline
communications subsidiaries will not be required in the future to
begin to make such reciprocal compensation payments under existing
interconnection agreements.  We have made periodic accruals of
amounts which may become payable in the event our view is not
ultimately upheld.

Number Portability

On May 5, 1998, the FCC entered an order to allow telecommunications
carriers, such as our landline communications subsidiaries, to
recover over a five-year period their carrier-specific costs of
implementing long-term number portability.  Long-term number
portability allows customers to retain their local telephone numbers
in the event they change local exchange carriers.  We began
implementing long-term number portability on March 31, 1998,
consistent with the FCC implementation schedule.  The FCC order
permits such cost recovery to begin no earlier than February 1, 1999,
in the form of a surcharge from customers to whom number portability
is available.

Universal Service, Access Charge Reform and Price Cap Order

In May 1997, the FCC issued three closely-related orders that
established rules to implement the universal service provisions of
the 1996 Act (the "Universal Service Order") and to revise both
interstate access charge pricing (the "Access Reform Order") and the
price cap plan for ILECs (the "Price Cap Order").

Universal Service  The FCC's Universal Service Order provides that
all interstate telecommunications providers will be required to
contribute to universal service funding, based on retail
telecommunications revenues.  The Universal Service Order establishes
a multi-billion dollar interstate universal service fund to help link
eligible schools and libraries and low-income consumers and rural
health care providers to the global telecommunications network
(including the Internet). The FCC directed the phase-in of these
funds during 1998, with a reduced funding rate for the first six
months of 1998.

Access Reform  In its Access Reform Order, the FCC restructured
interstate access pricing and adopted changes to its tariff structure
requiring LECs subject to price caps to use rates that reflect the
type of costs incurred.  A significant portion of the services that
had been charged using minutes-of-use pricing instead becomes
chargeable using a combination of minutes-of-use rates and flat-rate
charges.  The net effect of these changes has been to decrease
minutes-of-use charges and increase per line charges.  The majority
of these mandated pricing changes first became effective in January
1998, with additional changes to be phased in at the beginning of
each subsequent year through 2001.  The Access Reform Order also
continued in place existing rules by which ILECs may not assess
interstate access charges on ISPs and purchasers of unbundled network
elements.  Together with other ILECs, we have appealed certain
aspects of the Access Reform Order to the Eighth Circuit Court, where
a decision is pending.  In the meantime,


                               Page 20
                                  

<PAGE>21

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Regulatory considerations (cont'd.)
-----------------------------------
Universal Service, Access Charge Reform and Price Cap Order (cont'd.)

we have implemented state changes that mirror the federal access
reform structure.  Various interexchange carriers opposing such
changes have filed complaints before the Illinois and Michigan state
commissions.

Price Cap Order  Our interstate services are subject to price cap
regulation, which limits prices rather than profits.  The Price Cap
Order effectively reduced access charges by increasing the price cap
productivity offset factor to 6.5% from the previous 5.3% and by
applying this factor uniformly to all access providers.  The order
also required ILECs subject to price cap regulation to set their 1997
price cap index assuming that the 6.5% factor had been in effect
since July 1996.  Certain parties have sought judicial review of the
Price Cap Order, and a decision by the D. C. Circuit Court with
respect to these matters is now pending.

We currently cannot predict the precise impact of these regulatory
changes on our business, especially as their nature and timing may
evolve in connection with judicial and FCC consideration of other
provisions of the 1996 Act.

Recent federal regulatory developments - SecurityLink
-----------------------------------------------------
On December 30, 1997, the D. C. Circuit Court remanded to the FCC a
case involving a claim that the purchase of security services assets
of another company by our security services subsidiary
("SecurityLink") violated a provision of the 1996 Act.  The FCC
previously had ruled that the transaction was permissible under the
1996 Act.  The D. C. Circuit Court directed the FCC on remand to
explain how its decision was consistent with the 1996 Act.  The
matter currently is pending before the FCC.

On July 8, 1998, the FCC issued a Memorandum Opinion and Order and
Order to Show Cause related to three separate asset acquisitions made
by SecurityLink in 1997.  The FCC found in its order that we had
gained "financial control" over the entities from which the assets
were acquired in violation of a provision of the 1996 Act.  The order
required us, within 30 days after its issuance, to show cause why the
FCC should not require SecurityLink to divest the assets acquired in
these transactions.  On August 7, 1998, we filed our response with
the FCC contending that divestiture would not be an appropriate
remedy.

State developments
------------------
In 1996, our landline communications subsidiaries were required to
implement dialing parity on intraLATA toll calls (by implementing
Dial 1+ capability in portions of our local toll markets in Illinois,
Wisconsin and Michigan), or provide carriers with a discount on
intraLATA toll access rates where we were not able to do so.  Dial 1+
gives customers the ability to choose an alternate long distance
carrier for intraLATA toll calls by dialing 1 before the phone
number.  A Michigan appellate court has invalidated such
requirements, and an interexchange carrier which is a party to the
case has sought leave to appeal that decision.  Our Michigan landline
communications subsidiary has offered Dial 1+ capability in Michigan
in over 70% of our lines on a voluntary basis.  Under the 1996 Act,
we must implement Dial 1+ in a state coincident with our exercise of
in-region long distance authority or, if ordered by a state, by
February 8, 1999, whichever is earlier.



                               Page 21
                                  

<PAGE>22

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Year 2000 readiness
-------------------
The Year 2000 issue exists because many computer systems and
applications, including those embedded in equipment and facilities,
use two digit rather than four digit date fields to designate an
applicable year.  As a result, the systems and applications may not
properly recognize the year 2000 or process data which includes it,
potentially causing data miscalculations or inaccuracies or
operational malfunctions or failures.

We have established a centrally-managed, company-wide initiative to
identify, evaluate and address Year 2000 issues.  Begun in May 1996,
our Year 2000 effort covers our network and supporting infrastructure
for our provision of local switched and data telecommunications
services, cellular and paging services, cable TV service and security
services.  Also within the scope of this initiative are our
operational and financial information technology ("IT") systems and
applications, end-user computing resources and building systems, such
as security, elevator and heating and cooling systems.  In addition,
the project includes a review of the Year 2000 compliance efforts of
our key suppliers and other principal business partners and, as
appropriate, the development of joint business support and continuity
plans for Year 2000 issues.  While this initiative is broad in scope,
it has been structured to identify and prioritize our efforts for
mission critical systems, network elements and products and key
business partners.

Work is progressing in the following phases:  inventory, assessment,
remediation, testing, deployment and monitoring.  Although the pace
of the work varies among our business units and the phases are often
conducted in parallel, the inventory and assessment phases have been
substantially completed as of June 30, 1998 and the remediation phase
is in progress.  As part of our testing phase, we intend to conduct
independent verification testing of selected network component
upgrades received from suppliers.  In addition, selected Year 2000
upgrades are slated to undergo testing in a controlled environment
that replicates the current network and is equipped to simulate the
turn of the century and leap year dates.

Under our current Year 2000 plan, we have established a target date
of January 1, 1999 for remediation of our critical systems, network
elements and products, subject to additional Year 2000 testing and
responsive actions.  Our ability to meet that target date is
dependent upon the timely provision of necessary upgrades and
modifications by our suppliers and contractors.  In some instances,
third party upgrades or modifications are not expected to be
available until late 1998; accordingly, our testing and redeployment
of affected items may be delayed into 1999.  In addition, we cannot
guarantee that third parties on whom we depend for essential services
(such as electric utilities, interexchange carriers, etc.) will
convert their critical systems and processes in a timely manner.
Failure or delay by any of these parties could significantly disrupt
our business.  However, we have established a supplier compliance
program, and we are working with our key suppliers to minimize such
risks.

We currently estimate that we will incur expenses of approximately
$210 million through 2001 in connection with our anticipated Year
2000 efforts, in addition to approximately $40 million in expenses
incurred through June 30, 1998 for matters historically identified as
Year 2000-related.  The timing of our expenses may vary and is not
necessarily indicative of readiness efforts or progress to date.  We
anticipate that a portion of our Year 2000 expenses will not be
incremental costs,



                               Page 22
                                  

<PAGE>23

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Year 2000 readiness (cont'd.)
-----------------------------
but rather will represent the redeployment of existing IT resources.
We also expect to incur certain capital improvement costs (totaling
approximately $30 million) to support this project.  Such capital
costs are being incurred sooner than originally planned, but, for the
most part, would have been required in the normal course of business.

We have significant minority investments in large telecommunications
providers in Belgium, Denmark and Hungary, and have been advised by
management representatives of those companies that activities to
address Year 2000 issues are under way.  Based on information
reported to us, the estimated proportionate share of Year 2000 costs
that will flow through to our earnings as a result of such activities
is not expected to be material.

As part of our Year 2000 initiative, we are evaluating scenarios that
may occur as a result of the century change and are in the process of
developing contingency and business continuity plans tailored for
Year 2000-related occurrences.  Contingency planning to maintain and
restore service in the event of natural disasters, power failures and
software-related problems has been part of our standard operation for
many years, and we are working to leverage this experience in the
development of plans tailored to meet Year 2000-related challenges.
These plans are expected to assess the potential for business
disruption in various scenarios, and to provide for key operational
back-up, recovery and restoration alternatives.

The above information is based on our current best estimates, which
were derived using numerous assumptions of future events, including
the availability and future costs of certain technological and other
resources, third party modification actions and other factors.  Given
the complexity of these issues and possible as yet unidentified
risks, actual results may vary materially from those anticipated and
discussed above.  Specific factors that might cause such differences
include, among others, the availability and cost of personnel trained
in this area, the ability to locate and correct all affected computer
code, the timing and success of remedial efforts of our third party
suppliers and similar uncertainties.

Effects of foreign currency fluctuations
----------------------------------------
Our foreign operations and investments in international ventures are
subject to certain risks related to fluctuation in foreign currency
exchange rates.  In the three and six months ended June 30, 1998, due
to fluctuations in the U.S. dollar, we recognized some foreign
exchange transaction gains and losses and currency translation
adjustments related to these investments.  Foreign exchange
transaction gains and losses incurred by wholly owned subsidiaries
impacted operating income.  Transaction gains and losses incurred by
other international ventures (primarily equity method investments)
impacted other income, net.  Translation adjustments resulted in a
change in the investment balance and a corresponding change in
accumulated comprehensive income on the consolidated balance sheet.
While future fluctuations in currency exchange rates could impact
results of operations or financial position, foreign operations
continue to provide strong financial results and earnings growth.



                               Page 23
                                  
<PAGE>24

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
Disclosures about market risk
-----------------------------
We are exposed to market risks primarily from changes in interest
rates and foreign currency exchange rates.  To manage our exposure
to these fluctuations, we occasionally enter into various hedging
transactions that have been authorized according to documented
policies and procedures.  We do not use derivatives for trading
purposes, to generate income or to engage in speculative activity,
and we never use leveraged derivatives.

The amounts shown below represent the estimated potential loss
that we could incur from adverse changes in either interest rates
or foreign exchange rates using the value-at-risk estimation
model.  The value-at-risk model uses historical foreign exchange
rates and interest rates to estimate the volatility and
correlation of these rates in future periods.  It estimates a loss
in fair market value using the variance/co-variance statistical
modeling technique and includes substantially all market risk
exposures, specifically excluding equity-method investments.  The
fair value losses shown in the table below are for a one-day time
period with a confidence level of 95%.  They have no impact on our
results of operations or financial condition.

                          June 30, 1998     Dec. 31, 1997
                         --------------     -------------
Risk Category
  Interest rates                  $35               $ 25
  Foreign exchange                 --                 --

The 95% confidence interval signifies our degree of confidence
that actual one-day losses would not exceed the estimated losses
shown above.  The amounts shown here disregard the possibility
that interest rates and foreign currency exchange rates could move
in our favor.  The value-at-risk model assumes that all movements
in these rates will be adverse.  Actual experience has shown that
gains and losses tend to offset each other over time, and it is
highly unlikely that we could experience losses such as these over
an extended period of time.  These amounts should not be
considered projections of future losses, since actual results may
differ significantly depending upon activity in the global
financial markets.

The fair market value at risk increased as of June 30, 1998 due
primarily to an increase in fixed-rate debt.  We issued $2.5
billion of fixed-rate debt in the first quarter of 1998,
principally to fund our investment in Tele Danmark.  Value at risk
related to foreign exchange has not changed significantly since
December 31, 1997.

New accounting pronouncements
-----------------------------
FAS 131

In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (FAS) 131, "Disclosures
about Segments of an Enterprise and Related Information." This
statement supersedes FAS 14, "Financial Reporting of Segments of a
Business Enterprise," by establishing new standards for the way that
a public business enterprise reports operating segment information in
its annual and interim financial statements.  In general, FAS 131
requires reporting of financial information as it is used by senior
company management for



                               Page 24
                                  
<PAGE>25

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
New accounting pronouncements (cont'd.)
---------------------------------------
FAS 131 (cont'd.)

evaluating performance and deciding how to allocate resources.  The
statement is effective for 1998, but need not be applied to interim
financial statements this year.  Comparative information for earlier
years must be restated.  We will adopt FAS 131 beginning with our
1998 annual report.

AICPA SOP 98-1

In March 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use."
This SOP provides authoritative guidance for the capitalization of
certain costs related to computer software developed or obtained for
our internal applications, such as:

-  external direct costs of materials and services, such as
   programming costs,
-  payroll costs for employees devoting time to the software project,
   and
-  interest costs to be capitalized.
   
Costs incurred during the preliminary project stage, as well as
training and data conversion costs, are to be expensed as incurred.
The SOP is effective for fiscal years beginning after December 15,
1998; however, earlier application is encouraged.  We have not yet
quantified the impacts of adopting this SOP on our financial
statements and have not determined the timing of our adoption.  We
have historically expensed most computer software costs as incurred.

FAS 133

In June 1998, the FASB issued FAS 133, "Accounting for Derivative
Instruments and Hedging Activities."  This statement provides
standardized accounting and disclosure guidance for derivative
instruments and the derivative portion of certain similar contracts.
It amends FAS 52, "Foreign Currency Translation" and FAS 107,
"Disclosures about Fair Values of Financial Instruments," and it
supersedes a number of financial accounting standards previously
issued by the FASB and several interpretations from the Emerging
Issues Task Force.

The statement requires entities that use derivative instruments to
measure these instruments at fair value and record them as assets or
liabilities on the balance sheet.  It also requires entities to
reflect the gains or losses associated with changes in the fair value
of these derivatives, either in earnings or as a separate component
of comprehensive income, depending on the nature of the underlying
contract or transaction.

FAS 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999, and is to be adopted as of the
beginning of the fiscal year.  At the time of adoption, all
derivative instruments are to be measured at fair value and recorded
on the balance sheet.  Any differences between fair value and
carrying amount at that time will be recorded as a cumulative effect
of a change in accounting principle, in either net income or other
comprehensive income, as appropriate.  Adoption of this statement may
or may not have a material impact on



                               Page 25
                                  
<PAGE>26

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS (cont'd.)
                                  
New accounting pronouncements (cont'd.)
---------------------------------------
FAS 133 (cont'd.)

our results of operations or financial position in a given year,
depending upon the nature and magnitude of derivative activity that
we engage in and the changes in market conditions with respect to
foreign currencies, interest rates or other underlying values.  We
have not yet quantified the impacts of the initial adoption of FAS
133 on our results of operations or financial condition, nor have we
determined when we will implement the new standard.

Private Securities Litigation Reform Act safe harbor statement
--------------------------------------------------------------
Some of the information presented in, or in connection with, this
report may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve potential risks and uncertainties.  Our future
results could differ materially from those discussed here.  Some
of the factors that could cause or contribute to such differences
include:

-  changes in economic and market conditions that impact the demand
   for our products and services;
-  greater than anticipated competition from new entrants into the
   local exchange, intraLATA toll, cellular, data, cable TV,
   directory advertising or security services markets;
-  regulatory developments that impact the telecommunications,
   security services and cable TV industries, as well as pending
   regulatory issues in state jurisdictions;
-  longer than expected delays in obtaining entry into the interLATA
   long distance market, as well as potential additional costs to
   comply with the regulatory requirements of entry;
-  the potential impact of issues related to year 2000 software
   compliance;
-  risks inherent in international operations, including possible
   economic, political or monetary instability, as well as the
   potential impact of year 2000  compliance and Euro currency
   conversion issues; and,
-  the impact of new technologies and the potential effect of delays
   in development or deployment of such technologies.

You should not place undue reliance on these forward-looking
statements, which are applicable only as of August 12, 1998.  We have
no obligation to revise or update these forward-looking statements to
reflect events or circumstances that arise after August 12, 1998 or
to reflect the occurrence of unanticipated events.
                                  
                               Page 26
                                  

<PAGE>27

                Item 3 - Quantitative and Qualitative
                    Disclosures about Market Risk
                    -----------------------------
               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
Information relating to market risk is included in Item 2,
Management's Discussion and Analysis of Financial Condition and
Results of Operations, in the Other Matters section under the caption
"Disclosures About Market Risk."

                                  
                               Page 27
                                  


<PAGE>28

               AMERITECH CORPORATION AND SUBSIDIARIES
                                  
                                  
                                  
Part II - Other Information
---------------------------

Item 4    Submission of Matters to a Vote of Security Holders.
------    ----------------------------------------------------

Our 1998 Annual Meeting of Shareowners was held on April 15, 1998.
Information with respect to each matter voted on at such meeting and
the voting results for each such matter has been previously reported
in Item 4 of Part II of our Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998.

Item 6    Exhibits and Reports on Form 8-K.
------    ---------------------------------

   (a)     Exhibits
           --------
       12   Computation of ratio of earnings to fixed charges for
            the six months ended June 30, 1998 and 1997.
            
       27   Financial Data Schedule.
            
   (b)     Reports on Form 8-K
           -------------------
       We filed a Current Report on Form 8-K, dated April 14, 1998,
       to report our earnings for the first quarter of 1998.
       
       We filed a Current Report on Form 8-K, dated May 11, 1998,
       under Item 5, Other Events, and Item 7, Financial Statements
       and Exhibits, to report our agreement to merge with SBC
       Communications Inc.
                                  
                               Page 28
                                  

<PAGE>29

                                  
                             SIGNATURES
                                  
Under the requirements of the Securities Exchange Act of 1934, an
authorized company official has signed this report on our behalf.



                                            Ameritech Corporation




Date:   August 12, 1998                     By:  /s/ Barbara A. Klein
                                            ------------------------------
                                            Barbara A. Klein
                                            Vice President and Comptroller

                                            (Duly Authorized Signatory and
                                             Principal Accounting Officer)
                                  
                               Page 29
                                  


<PAGE>30

GLOSSARY

Access charges -
--------------
fees that local phone companies charge to long distance carriers for
the handling of long distance calls on our local network.

Access line -
-----------
a telephone line for voice, data or video reaching from a local phone
company to a home or business.

Advanced data services -
----------------------
services that use advanced technology to allow faster network access
to the Internet and other multimedia and data services.

Call management services -
------------------------
services that add value and convenience for phone customers, such as
call waiting, call forwarding and Caller ID.  These services are sold
to customers individually or in "packages."

Customer premises equipment (CPE) -
---------------------------------
communications equipment owned by customers, including telephones,
faxes and switches.

Dial 1+ -
--------
a feature that allows local phone customers to designate a carrier
other than the local service provider for toll calls within their
calling area by simply dialing 1 plus the telephone number.

Digital -
-------
an alternative to traditional analog communications, digital systems
transport information in computer code for improved clarity and
quality.

Federal Communications Commission (FCC) -
---------------------------------------
the federal agency responsible for regulating the interstate aspects
of telecommunications activities.

Financial Accounting Standards Board (FASB) -
-------------------------------------------
the independent body responsible for setting accounting and financial
reporting standards to be followed by U.S. business enterprises.

Gross receipts taxes -
--------------------
state and local taxes based upon the gross operating revenues earned
in a particular jurisdiction.  These taxes may be imposed on general
businesses or public utilities in lieu of other taxes.

Interconnection -
---------------
allowing a competitive local service provider to use the local phone
company's network, or elements of the network, to provide local phone
service to its customers.

Interexchange carriers (IXCs) -
-----------------------------
those companies primarily involved in providing long distance voice
and data transmission services, such as AT&T, MCI and Sprint.

Internet -
--------
the global web of networks that connects computers around the world,
providing rapid access to information from multiple sources.

Internet service providers (ISPs) -
---------------------------------
those companies providing access to the Internet and other computer-
based information networks.

Intrastate revenues -
-------------------
that portion of revenues regulated by state rather than federal
authorities.

Landline communications subsidiaries -
-----------------------------------
the subsidiaries of Ameritech engaged primarily in providing local
phone service and network access in the states of Illinois, Indiana,
Michigan, Ohio and Wisconsin.
                                  
                               Page 30
                                  


<PAGE>31

GLOSSARY (cont'd.)

Local access and transport area (LATA) -
--------------------------------------
the boundary within which a local telephone company may provide phone
service.  It is usually centered around a city or other identifiable
community of interest.

Local exchange carriers (LECs) -
--------------------------------------
those companies primarily involved in providing local phone service
and access to the local phone network, including Ameritech's landline
communications subsidiaries in Illinois, Indiana, Michigan, Ohio and
Wisconsin.

Operations support systems (OSS) -
--------------------------------
the databases and information used to support the provision of
telephone service to end users.

Personal communications services (PCS) -
--------------------------------------
wireless services, such as cellular phone service and two-way paging,
that use digital technology to provide enhanced call security, longer
battery life and other convenience features.

Price caps -
----------
a form of regulation that sets maximum limits on the prices that LECs
can charge for access services instead of limits on rate of return or
profits.

Productivity factor -
-------------------
a portion of the interstate price cap formula that requires LECs to
reduce the price cap based on an assumed increase in productivity.

Securities and Exchange Commission (SEC) -
----------------------------------------
the federal agency that regulates the issuance and trading of public
debt and equity securities in the United States and monitors
compliance with these regulations.

Security services -
-----------------
services that help secure people and property, including burglar and
fire alarm systems, closed circuit cameras and electronic card
access.  Most of our revenue is from the installation and monitoring
of alarm systems.

Switched Minutes of Use -
-----------------------
the measure of time used to bill IXC's for access to our public
switched network.

Universal service -
-----------------
a concept designed to ensure access to the telecommunications network
in rural and low-income areas at affordable prices.  Funding
typically comes from urban telecommunication operators.

Unbundled network element -
-------------------------
any feature, function or capability used in the provision of
telecommunications service that is made available by local exchange
carriers to other telecommunications providers separate from other
network elements and for a separate fee.

                                  
                                  
                               Page 31