SECURITIES AND EXCHANGE COMMISSION
                                    WASHINGTON, D. C. 20549


                                           FORM 10-Q
            (Mark One)

                     |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                            OF THE SECURITIES EXCHANGE ACT OF 1934

                         For the quarterly period ended March 31, 1999

                                              OR

                     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                            OF THE SECURITIES EXCHANGE ACT OF 1934

                               For the transition period from to


                                 Commission file number 1-8607


                                     BELLSOUTH CORPORATION
                    (Exact name of registrant as specified in its charter)


                   Georgia                                   58-1533433
           (State of Incorporation)                         (I.R.S. Employer
                                                         Identification Number)


     1155 Peachtree Street, N. E.,                             30309-3610
            Atlanta, Georgia                                   (Zip Code)
  (Address of principal executive offices)

                   Registrant's telephone number 404 249-2000

     Indicate  by check mark  whether the  registrant  (1) has 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  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___

At April 30, 1999, 1,894,062,053 common shares were outstanding.


<PAGE>



                                                  Table of Contents


   Item                                                                     Page
                                                       Part I
     1.      Financial Statements
                Consolidated Statements of Income ........................    3
                Consolidated Balance Sheets ..............................    4
                Consolidated Statements of Cash Flows ....................    5
                Consolidated Statements of Shareholders' Equity
                   and Comprehensive Income ..............................    6
                Notes to Consolidated Financial Statements ...............    8

    2.       Management's Discussion and Analysis of Results of
                Operations and Financial Condition .......................   13

    3.       Qualitative and Quantitative Disclosures about Market Risk ..   25

                                                       Part II
    6.       Exhibits and Reports on Form 8-K ............................   27



<PAGE>


 PART I - FINANCIAL INFORMATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                  BELLSOUTH CORPORATION
                                            CONSOLIDATED STATEMENTS OF INCOME
                                                       (Unaudited)
                                         (In Millions, Except Per Share Amounts)

                                                                  For the Three Months
                                                                     Ended March 31,
                                                                 1999              1998
<S>                                                                  <C>                <C>   
Operating Revenues:
   Wireline communications:
      Local service .....................................            $2,654             $2,414
      Network access ....................................             1,191              1,151
      Long distance .....................................               150                175
      Other wireline ....................................               280                236
        Total wireline communications ...................             4,275              3,976
   Domestic wireless ....................................               744                644
   International operations .............................               561                452
   Advertising and publishing ...........................               343                336
   Other ................................................                50                 18
      Total Operating Revenues...........................             5,973              5,426

Operating Expenses:
   Operational and support expenses .....................             3,253              2,929
   Depreciation and amortization ........................             1,113              1,043
     Total Operating Expenses ...........................             4,366              3,972

Operating Income ........................................             1,607              1,454

Interest Expense ........................................               226                190
Gain on Sale of Operations ..............................                --                155
Net Equity in Earnings (Losses) of
   Unconsolidated Businesses ............................              (266)                11
Other Income, net .......................................                59                 17

Income Before Income Taxes ..............................             1,174              1,447
Provision for Income Taxes ..............................               559                555

     Net Income .........................................            $  615              $ 892

Weighted-Average Common Shares
  Outstanding (Note C):
   Basic ................................................             1,932              1,983
   Diluted ..............................................             1,951              1,993
Dividends Declared Per Common Share .....................             $ .19              $ .18
Earnings Per Share:
   Basic ................................................             $ .32              $ .45
   Diluted ..............................................             $ .32              $ .45
</TABLE>


                 The accompanying notes are an integral part of
                    these consolidated financial statements.

<PAGE>


<TABLE>
<CAPTION>
                                                  BELLSOUTH CORPORATION
                                               CONSOLIDATED BALANCE SHEETS
                                         (In Millions, Except Per Share Amounts)

                                                                                                    March 31,         December 31,
                                                                                                       1999               1998
                                                                                                   (Unaudited)
<S>                                                                                                         <C>              <C>    
ASSETS
Current Assets:
 Cash and cash equivalents ................................................................                $1,779           $ 3,003
 Temporary cash investments ...............................................................                   209               184
 Accounts receivable, net of allowance for uncollectibles of $246 and $251 ................                 4,450             4,629
 Material and supplies ....................................................................                   426               431
 Other current assets .....................................................................                   526               459
   Total Current Assets ...................................................................                 7,390             8,706

Investments and Advances ..................................................................                 2,515             2,861

Property, Plant and Equipment .............................................................                58,944            57,974
Less: accumulated depreciation ............................................................                34,874            34,034
   Property, Plant and Equipment, net .....................................................                24,070            23,940

Deferred Charges and Other Assets .........................................................                 1,066             1,028
Intangible Assets, net ....................................................................                 3,134             2,875

Total Assets ..............................................................................               $38,175           $39,410

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
 Debt maturing within one year ............................................................                $4,570            $3,454
 Accounts payable .........................................................................                 1,492             2,219
 Other current liabilities ................................................................                 3,863             3,477
   Total Current Liabilities ..............................................................                 9,925             9,150

Long-Term Debt ............................................................................                 8,406             8,715

Noncurrent Liabilities:
 Deferred income taxes ....................................................................                 2,656             2,512
 Unamortized investment tax credits .......................................................                   157               167
 Other noncurrent liabilities  ............................................................                 2,629             2,756
   Total Noncurrent Liabilities ...........................................................                 5,442             5,435


Shareholders' Equity:
 Common stock, $1 par value (4,400 shares authorized; 1,907 and 1,950
    shares outstanding) ...................................................................                 2,020             2,020
 Paid-in capital ..........................................................................                 6,766             6,766
 Retained earnings ........................................................................                 9,718             9,479
 Accumulated other comprehensive income ...................................................                  (222)              (64)
 Shares held in trust and treasury ........................................................                (3,577)           (1,752)
 Guarantee of ESOP debt....................................................................                  (303)             (339)
   Total Shareholders' Equity .............................................................                14,402            16,110

Total Liabilities and Shareholders' Equity ................................................               $38,175           $39,410

</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.

<PAGE>


<TABLE>
<CAPTION>
                                                   BELLSOUTH CORPORATION
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (Unaudited)
                                                       (In Millions)
                                                                                                             For the Three Months
                                                                                                               Ended March 31,
                                                                                                           1999               1998
<S>                                                                                                       <C>                 <C>  
        Cash Flows from Operating Activities:
         Net income ......................................................................                $ 615               $ 892
         Adjustments to net income:
             Depreciation and amortization ...............................................                1,113               1,043
             Gain on sale of operations ..................................................                   --                (155)
             Net equity in losses (earnings) of unconsolidated businesses  ...............                  266                 (11)
             Provision for uncollectibles ................................................                   84                  76
             Deferred income taxes and unamortized investment tax credits ................                  104                 (16)
             Dividends received from unconsolidated businesses............................                   14                  48
         Net change in:
             Accounts receivable and other current assets ................................                  (11)                 88
             Accounts payable and other current liabilities ..............................                 (308)                 30
             Deferred charges and other assets ...........................................                 (128)                 (9)
             Other liabilities and deferred credits ......................................                 (113)                 46
         Other reconciling items, net ....................................................                    6                  24
             Net cash provided by operating activities ...................................                1,642               2,056

        Cash Flows from Investing Activities:
         Capital expenditures ............................................................               (1,387)             (1,226)
         Purchases of licenses and other intangible assets ...............................                  (38)               (105)
         Proceeds from sale of operations ................................................                   --                 155
         Proceeds from disposition of short-term investments .............................                  181                  19
         Purchases of short-term investments .............................................                 (205)                (11)
         Investments in and advances to unconsolidated businesses ........................                  (55)               (483)
         Proceeds from repayment of loans and advances....................................                   15                   1
         Other investing activities, net .................................................                   11                  57
             Net cash used for investing activities ......................................               (1,478)             (1,593)

        Cash Flows from Financing Activities:
         Net borrowings (repayments) of short-term debt ..................................                  982                (499)
         Proceeds from long-term debt ....................................................                    6                 231
         Repayments of long-term debt ....................................................                 (181)               (199)
         Dividends paid ..................................................................                 (371)               (357)
         Purchase of treasury shares .....................................................               (1,841)                (80)
         Other financing activities, net .................................................                   17                  (9)
             Net cash used for financing activities ......................................               (1,388)               (913)

        Net Decrease in Cash and Cash Equivalents ........................................               (1,224)               (450)
        Cash and Cash Equivalents at Beginning of Period .................................                3,003               2,570
        Cash and Cash Equivalents at End of Period .......................................               $1,779             $ 2,120

</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements.

<PAGE>


<TABLE>
<CAPTION>
                                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                 AND COMPREHENSIVE INCOME
                                                        (Unaudited)
                                                       (In Millions)

                                                                 For the Three Months Ended March 31, 1999

                                  Number of Shares                                      Amount    

                                 ------------------------ --------------------------------------------------------------------------
                                                                                        Accum.
                                             Shares                                      Other      Shares     Guarantee
                                             Held In                                    Compre-    Held In       of ESOP
                                 Common     Trust and    Common    Paid-in   Retained   hensive   Trust and       Debt
                                 Stock      Treasury      Stock    Capital   Earnings   Income     Treasury                Total
                                               (a)                                                   (a)
<S>                                  <C>          <C>       <C>       <C>        <C>        <C>       <C>           <C>     <C>    
Balance at December
   31, 1998 ................         2,020        (70)      $2,020    $6,766     $9,479     $(64)     $(1,752)      $(339)  $16,110

Net income .................                                                        615                                         615

Other comprehensive income, net of tax:

  Foreign currency 
   translation adjustment ..                                                                (158)                              (158)

Total comprehensive income .                                                                                                    457

Dividends declared .........                                                       (369)                                       (369)

Share issuances for 
  employee benefit plans ...                                                        (10)                    20                   10

Purchase of treasury 
  stock ....................                      (43)                                                  (1,841)              (1,841)

Purchase of stock by 
  grantor trust ............                                                                                (4)                  (4)

ESOP activities and 
  related tax benefit ......                                                          3                                36        39
                                     -----        ----      ------    ------     ------       ---       ------      ------  -------
Balance at March 31, 1999 ..         2,020       (113)      $2,020    $6,766     $9,718    $(222)     $(3,577)      $(303)  $14,402


</TABLE>


     (a) Trust and treasury  shares are not  considered  to be  outstanding  for
financial  reporting  purposes.  As of March 31, 1999, there were  approximately
35.7 shares held in trust and 76.9 shares held in treasury.


              The accompanying notes are an integral part of these
                       consolidated financial statements.



<PAGE>


<TABLE>
<CAPTION>
                                                   BELLSOUTH CORPORATION
                                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                 AND COMPREHENSIVE INCOME
                                                        (Unaudited)
                                                       (In Millions)

                                                                 For the Three Months Ended March 31, 1998

                                  Number of Shares                                      Amount     

                                 ------------------------ --------------------------------------------------------------------------
                                                                                       Accum.
                                             Shares                                     Other     Shares     Guarantee
                                             Held In                                   Compre-   Held In       of ESOP
                                 Common     Trust and    Common    Paid-in  Retained   hensive  Trust and       Debt
                                 Stock      Treasury      Stock    Capital  Earnings   Income    Treasury                   Total
                                                (a)                                                 (a)
<S>                                <C>          <C>       <C>       <C>       <C>         <C>       <C>         <C>        <C>      
Balance at December 
  31, 1997 ..................      1,010        (18)      $1,010    $7,714    $7,382      $ 36      $(575)      $(402)     $15,165

Net income ..................                                                    892                                           892

Other comprehensive income, net of tax:

  Foreign currency 
    translation adjustment ..                                                               4                                    4

Total comprehensive income ..                                                                                                  896

Dividends declared ..........                                                   (357)                                         (357)

Share issuances for 
  employee benefit plans ....                                          (13)                            32                       19

Acquisition-related 
  transactions ..............                      1                     5                             33                       38

Purchase of treasury 
  stock .....................                     (2)                                                 (80)                     (80)

Purchase of stock 
  by grantor trust ..........                                                                         (24)                     (24)

ESOP activities and 
  related tax benefit .......                                                      2                                33          35
                                    -----        ----    --------  --------    ------       ---      ------      ------     -------
Balance at March 31, 1998 ...      1,010         (19)      $1,010    $7,706    $7,919       $40      $(614)      $(369)    $15,692
</TABLE>


     (a) Trust and treasury  shares are not  considered  to be  outstanding  for
financial  reporting  purposes.  As of March 31, 1998, there were  approximately
17.6 shares held in trust and 1.6 shares held in treasury.

   The accompanying  notes  are an  integral  part of
      these consolidated financial statements.



<PAGE>


                                         BELLSOUTH CORPORATION
                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                              (Unaudited)
                                        (Dollars In Millions)

Note A - Preparation of Interim Financial Statements

     In this report,  BellSouth Corporation and its subsidiaries are referred to
as "we" or "BellSouth."

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared based upon Securities and Exchange Commission rules that permit reduced
disclosure for interim periods.  In our opinion,  these  statements  include all
adjustments  necessary  for a fair  presentation  of the  results of the interim
periods shown. All adjustments are of a normal recurring nature unless otherwise
disclosed.  Revenues,  expenses,  assets and  liabilities  can vary  during each
quarter  of the  year.  Therefore,  the  results  and  trends  in these  interim
financial  statements may not be the same as those for the full year. For a more
complete   discussion  of  our   significant   accounting   policies  and  other
information,  you should read this report in conjunction  with the  consolidated
financial statements included in our latest annual report on Form 10-K.

     Certain amounts have been reclassified  within the prior year's information
to conform to the current year's presentation.

Note B - New Accounting Pronouncements

     In the first  quarter of 1999,  we adopted a new  accounting  standard (SOP
98-1) related to the  capitalization of certain costs for internal-use  software
development. Adoption of the new standard resulted in an increase in earnings as
a result of the capitalization of costs which had previously been expensed.  The
first  quarter  impact was an increase in income before income taxes of $108 and
net  income  of  $65  or  $.03  per  share.   The  adoption   also  changed  the
classification  of these  expenditures  in the  consolidated  statements of cash
flows from operating to investing activities.


Note C -  Earnings Per Share

     Prior  period  amounts  related  to  weighted-average   common  shares  and
dividends declared per common share have been adjusted for the two-for-one-stock
split which occurred in December 1998. The following is a reconciliation  of the
weighted-average  share amounts (in millions) used in  calculating  earnings per
share:

                                             For the Three Months
                                               Ended March 31,
                                              1999         1998
Basic common shares outstanding ........     1,932        1,983
Incremental shares from stock options ..        19           10
Diluted common shares outstanding ......     1,951        1,993

     The earnings amounts used for per share  calculations are the same for both
the basic and diluted methods.



<PAGE>


                               BELLSOUTH CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                    (Unaudited)
                               (Dollars In Millions)


Note D - Segment Information

     We have four reportable  operating segments:  (1) Wireline  communications;
(2) Domestic  wireless;  (3) International  operations;  and (4) Advertising and
publishing.  We have  included the  operations of all other  businesses  falling
below the reporting  threshold in the "Other" segment.  The "reconciling  items"
shown below  include  Corporate  Headquarters  and capital  funding  activities,
intercompany  eliminations  and other  nonoperating  items.  The following table
provides information for each operating segment:


                                                First Quarter            %
                                               1999         1998       Change
Wireline communications
External revenues .......................    $ 4,275       $ 3,976          7.5
Intersegment revenues ...................         48            44          9.1
  Total revenues ........................    $ 4,323       $ 4,020          7.5
Operating income ........................    $ 1,413       $ 1,223         15.5
Segment net income ......................    $   801       $   683         17.3

Domestic wireless
External revenues .......................    $   744       $   644         15.5
Intersegment revenues ...................          4             2          N/M*
  Total revenues ........................    $   748       $   646         15.8
Operating income ........................    $    87       $    91         (4.4)
Net equity in earnings (losses) of
  unconsolidated  businesses ............    $    31       $    35        (11.4)
Segment net income ......................    $    60       $    69        (13.0)

International operations
External revenues .......................    $   561       $   452         24.1
Intersegment revenues ...................         --            --           -- 
  Total revenues ........................    $   561       $   452         24.1
Operating income ........................    $    51       $    51           --
Net equity in earnings (losses) of
  unconsolidated  businesses ............    $    (13)     $   (21)        38.1
Segment net loss ........................    $    (20)     $    (5)         N/M

Advertising and publishing
External revenues .......................    $   343       $   336          2.1
Intersegment revenues ...................          3             2          N/M
  Total revenues ........................    $   346       $   338          2.4
Operating income ........................    $   140       $   137          2.2
Net equity in earnings (losses) of
  unconsolidated  businesses ............    $    (1)      $    --          N/M
Segment net income ......................    $    84       $    86         (2.3)



*  Not Meaningful


<PAGE>


                                     BELLSOUTH CORPORATION
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                          (Unaudited)
                                     (Dollars In Millions)

Note D - Segment Information (continued)

                                                  First Quarter             %
                                                 1999         1998        Change

Other
External revenues ...........................     $  50       $  18         N/M
Intersegment revenues .......................        70          54        29.6
  Total revenues ............................     $ 120       $  72        66.7
Operating loss ..............................     $ (84)      $ (64)      (31.3)
Net equity in earnings (losses) of
  unconsolidated  businesses ................     $   1       $  (3)        N/M
Segment net loss ............................     $ (57)      $ (40)      (42.5)

Reconciling items
External revenues ...........................     $  --       $  --         N/M
Intersegment revenues .......................      (125)       (102)      (22.5)
  Total revenues ............................     $(125)      $(102)      (22.5)
Operating income ............................     $  --       $  11         N/M
Net equity in earnings (losses) of
  unconsolidated  businesses
  (Note E) ..................................     $(284)      $  --         N/M
Segment net (loss) income ...................     $(253)      $  99         N/M


Note E -  Devaluation of Brazilian Currency

     We hold equity  interests  in two  wireless  communications  operations  in
Brazil.  During  January 1999,  the government of Brazil allowed its currency to
trade  freely  against  other  currencies.  As  a  result,  the  Brazilian  Real
experienced a devaluation against the US Dollar. The devaluation resulted in the
entities  recording  exchange losses related to their net US  Dollar-denominated
liabilities. Our share of the foreign exchange rate losses for the first quarter
was $280.

     These exchange losses are subject to further upward or downward  adjustment
based on  fluctuations  in the  exchange  rates  between  the US Dollar  and the
Brazilian Real.

Note F -  Gain on Sale of Operations

     In 1997, we sold our 20% interest in ITT World  Directories  (ITTWD) to ITT
Corporation  (ITT).  The sale  agreement  contained  provisions  that called for
additional  sales  proceeds to be paid to us in the event that ITT  subsequently
resold  ITTWD above a certain  price.  As a result of ITT's  subsequent  sale of
ITTWD,  we received  additional  proceeds that resulted in a pretax gain of $155
($96 after tax) in the first quarter of 1998.

Note G - Lease of Communications Towers

     In March  1999,  we  signed  a  preliminary  agreement  with  Crown  Castle
International, Inc. (Crown) for the lease of approximately 1,850 of our wireless
communications  towers in exchange for $610, to be paid in a combination of cash
and Crown common stock. We will retain,  outside of the leases, a portion of the
towers  for  use  in  operating  our  wireless  network.  Under  the  definitive
agreement,  Crown will manage,  maintain and remarket the remaining space on the
towers.  In  addition,  we  agreed  to  enter  into a  five-year,  build-to-suit
agreement with Crown covering up to 500 towers.


<PAGE>


                                  BELLSOUTH CORPORATION
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                       (Unaudited)
                                  (Dollars In Millions)

Note H - Supplemental Cash Flow Information

                                                      For the Three Months
                                                         Ended March 31,
                                                        1999          1998

Cash Paid For:

   Income taxes ............................             $ 57          $ 45
   Interest ................................             $159          $149



Note I - Summary Financial Information for Equity Investees

     The following table displays the summary  unaudited  financial  information
for our equity  method  businesses.  These  amounts  are shown on a 100  percent
basis.

                                        For the Three Months
                                           Ended March 31,          %
                                          1999         1998       Change
  Revenues  .........................   $ 1,210       $ 715        69.2
  Operating income ..................   $    33       $ (31)        N/M
  Net loss ..........................   $  (938)      $  (6)        N/M


Note J - Contingencies

     Following  the  enactment  of  the  Telecommunications  Act  of  1996,  our
telephone company subsidiary, BellSouth Telecommunications,  Inc. (BST), entered
into interconnection agreements with various competitive local exchange carriers
(CLECs).  These  agreements  provide  for,  among other  things,  the payment of
reciprocal  compensation  for local  calls  initiated  by the  customers  of one
carrier that are completed on the network of the other  carrier.  Numerous CLECs
have claimed entitlement from BST for compensation associated with dial-up calls
originating  on BST's network and  connecting  with Internet  service  providers
(ISPs) served by the CLECs' networks. It is BST's position that dial-up calls to
ISPs are not local  calls for which  terminating  compensation  is due under the
interconnection   agreements.   The  courts  and  state  commissions  that  have
considered  the matter to date,  however,  have ruled that such calls invoke the
reciprocal compensation obligation.

     In February  1999,  the Federal  Communications  Commission  (FCC) issued a
decision that such ISP traffic does not terminate at the ISP and, therefore,  is
interstate in nature,  rather than local.  The FCC stated  further that it would
not interfere with prior state commissions'  decisions regarding this matter. We
continue  to believe  that we have a good basis for our claims that BST does not
owe such reciprocal  compensation to the CLECs.  BST has,  however,  received an
unfavorable  ruling before a state commission  subsequent to the FCC's decision.
BST has appealed this decision like those released prior to the FCC's order.

     At March 31,  1999,  our  exposure  related  to these  disputed  claims was
approximately $240, including accrued interest.





<PAGE>

                                     BELLSOUTH CORPORATION
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                          (Unaudited)
                                     (Dollars In Millions)


Note K - Subsequent Events

     Qwest agreement.  During April 1999, we announced a new business  agreement
with Qwest Communications International Inc. (Qwest). As part of this agreement,
and subject to customary regulatory  approvals,  we would purchase a ten percent
ownership  interest  in Qwest for  approximately  $3.5  billion.  We expect  the
purchase to be completed during second quarter 1999.

     South  Carolina.  In 1994, the South Carolina  General  Assembly  adopted a
statute which gave the South  Carolina  Public  Service  Commission  (SCPSC) the
authority to regulate telephone utilities by alternative regulation.  In January
1996, the SCPSC issued an order approving BST's price  regulation plan. In April
1999, the South Carolina  Supreme Court ruled that the SCPSC's approval of BST's
price regulation plan did not meet the statutory  requirements.  BST has filed a
petition for rehearing with the Court.





<PAGE>


                               BELLSOUTH CORPORATION
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                        OPERATIONS AND FINANCIAL CONDITION
                  (Dollars in Millions, Except Per Share Amounts)

     For a more  complete  understanding  of our  industry,  the  drivers of our
business,  and our  current  period  results,  you  should  read  the  following
Management's  Discussion  and Analysis of Results of  Operations  and  Financial
Condition  (MD&A) in  conjunction  with the MD&A in our latest  annual report on
Form 10-K.

--------------------------------------------------------------------------------
Consolidated Results of Operations
--------------------------------------------------------------------------------

     Key financial and operating data for the first quarter of 1999 and 1998 are
as follows:

                                          ---------------------- ----------
                                              First Quarter          %
                                          ---------------------- 
                                            1999        1998      Change
                                          ---------- ----------- ----------
Revenues                                    $ 5,973     $ 5,426       10.1
---------------------------------------------------- ----------- ----------
Expenses                                    $ 4,366     $ 3,972        9.9
---------------------------------------------------- ----------- ----------
EBITDA(a)                                   $ 2,720     $ 2,497        8.9
---------------------------------------------------- ----------- ----------
EBITDA margin                                  45.5%       46.0%    -50bps
---------------------------------------------------- ----------- ----------
Access line counts (000's):
---------------------------------------------------- ----------- ----------
   Switched access lines                     24,361      23,548        3.5
---------------------------------------------------- ----------- ----------
   Access line equivalents                   16,065      11,537       39.2
---------------------------------------------------- ----------- ----------
     Total equivalent access lines           40,426      35,085       15.2
---------------------------------------------------- ----------- ----------
Digital and data revenues                     $ 555        $426       30.3
---------------------------------------------------- ----------- ----------
Convenience feature revenues                  $ 434        $357       21.6
---------------------------------------------------- ----------- ----------
Access minutes of use (millions)             26,825      25,082        6.9
---------------------------------------------------- ----------- ----------
Proportionate wireless customers (000's):
---------------------------------------------------- ----------- ----------
   Domestic(b)                                5,005       4,185       19.6
---------------------------------------------------- ----------- ----------
   International(c)                           4,012       2,031       97.5
---------------------------------------------------- ----------- ----------

     (a) EBITDA  represents  income before net interest  expense,  income taxes,
depreciation and amortization, net equity in earnings (losses) of unconsolidated
businesses  and other income,  net.  EBITDA is presented  because it is a widely
accepted  financial  indicator used by certain investors and analysts to analyze
and compare  companies  on the basis of  operating  performance  and because our
management  believes  that  EBITDA  is  an  additional   meaningful  measure  of
performance and liquidity.  EBITDA is not intended to present cash flows for the
period,  nor has it been presented as an alternative to operating  income (loss)
as an  indicator  of  operating  performance  and  should not be  considered  in
isolation or as a substitute for measures of performance  prepared in accordance
with  generally  accepted  accounting  principles.  The items  excluded from the
calculation of EBITDA are significant  components in understanding and assessing
our financial  performance.  Our  computation of EBITDA may not be comparable to
the computation of similarly titled measures of other companies. EBITDA does not
represent funds available for discretionary uses.


     (b)  During  fourth  quarter  1998,  we  reorganized  our Los  Angeles  and
Houston/Galveston  cellular  partnerships  with  AT&T.  We  have  restated  1998
domestic wireless  customers to reflect this  reorganization  and provide a more
meaningful presentation of existing properties.

     (c) During  fourth  quarter  1998,  we sold our interest in  BellSouth  New
Zealand.  We have restated 1998 international  wireless customers to exclude the
customers of BellSouth New Zealand and provide a more meaningful presentation of
existing operations.

-------------------------------------------------------------------------------
Overview
-------------------------------------------------------------------------------

     Net income and  earnings  per share for the first  quarter of 1999 and 1998
are as follows (all references to earnings per share are on a diluted basis):
                                            ----------------------- -----------
                                                First Quarter           %
                                            ----------------------- 
                                               1999        1998       Change
                                            ----------- ----------- -----------
As Reported:
------------------------------------------- ----------- ----------- -----------
  Net income                                     $ 615       $ 892   (31.1)
------------------------------------------- ----------- ----------- -----------
  Earnings per share                             $ .32       $ .45   (28.9)
------------------------------------------- ----------- ----------- -----------
Normalized:
------------------------------------------- ----------- ----------- -----------
  Net income                                     $ 895       $ 796    12.4
------------------------------------------- ----------- ----------- -----------
  Earnings per share                             $ .46       $ .40    15.0
------------------------------------------- ----------- ----------- -----------

<PAGE>
     First quarter 1999 reported results were greatly affected by the impacts of
the  devaluation  of the Brazilian  Real in early January 1999. Our share of the
foreign exchange losses in our Brazilian wireless  properties reduced net income
for the  quarter by $280 or $.14 per share  (included  in Net Equity in Earnings
(Losses) of Unconsolidated Businesses).  The quarter-over-quarter  comparison is
also  impacted  by the  first  quarter  1998  gain  related  to the  sale of our
investment in ITT World Directories of $96 or $.05 per share.

     On a normalized  basis,  results  reflect strong revenue growth in our core
wireline  business,  a 30.3%  growth in digital and data  services  revenues and
significant increases in our international and domestic wireless customer bases.
Expense  growth was driven by increased  spending in our core wireline  business
for customer service and network support functions,  volume-driven  increases at
our international and domestic wireless  businesses and expenses for development
and promotion of new business initiatives including high-speed data and Internet
service offerings.

     On January 1, 1999 we adopted a new accounting  standard on  capitalization
of  internal-use  software.  The  quarter-over-quarter  impact  of  capitalizing
software  costs under the new standard was a benefit of $65 or $.03 per share to
first quarter 1999 net income.

--------------------------------------------------------------------------------
Results by Segment
--------------------------------------------------------------------------------

     Our  reportable  segments  reflect  strategic  business  units  that  offer
different products and services and/or serve different  customers.  We have four
reportable  operating  segments:  (1)  Wireline  communications;   (2)  Domestic
wireless; (3) International  operations;  and (4) Advertising and publishing. We
have included the operations of all other businesses falling below the reporting
threshold in the "Other" segment.  We evaluate the performance of each strategic
business unit based on net income,  exclusive of charges for use of intellectual
property rights and  adjustments for special items that may arise.  Intersegment
revenues and expenses are not  eliminated.  Special  items are  transactions  or
events that are included in reported  consolidated results but are excluded from
segment results due to their non-recurring or non-operational nature.

     The results of businesses in which we own noncontrolling  interests are not
included in our  reported  revenues  and  expenses  but are  included in the Net
Equity in Earnings (Losses) of Unconsolidated Businesses line item.



<PAGE>
--------------------------------------------------------------------------------
Wireline Communications
--------------------------------------------------------------------------------

     Wireline   communications  include  local  exchange,   network  access  and
intraLATA  long  distance  services to business and  residential  customers in a
nine-state region located in the southeastern United States.

------------------------------------------ ----------------------- -----------
                                               First Quarter           %
                                              1999        1998       Change
------------------------------------------ ----------- ----------- -----------

Operating revenues:
   Local service                               $2,654      $2,414         9.9
   Network access                               1,191       1,151         3.5
   Long distance                                  150         175       (14.3)
   Other wireline                                 328         280        17.1
------------------------------------------ ----------- ----------- -----------
     Total operating revenues                  $4,323      $4,020         7.5
------------------------------------------ ----------- ----------- -----------
Operating expenses                             $2,910      $2,797         4.0
------------------------------------------ ----------- ----------- -----------
Operating income                               $1,413      $1,223        15.5
------------------------------------------ ----------- ----------- -----------
Segment net income                             $  801      $  683        17.3
------------------------------------------ ----------- ----------- -----------

------------------------------------------ ----------- ----------- -----------
EBITDA                                         $2,246      $2,049         9.6
------------------------------------------ ----------- ----------- -----------
EBITDA margin                                    52.0%       51.0%    +100bps
------------------------------------------ ----------- ----------- -----------


Operating Revenues

Local service
     The $240 increase in local service  revenues is  attributable  to growth in
access lines and strong  demand for digital and data  services  and  convenience
features.

     We ended the first  quarter with over 40 million  total  equivalent  access
lines,  an  increase  of 15.2% over the prior  year.  Residential  access  lines
increased 3.9% to 16,764,000 in first quarter 1999, driven by economic growth in
our nine-state region as well as demand for additional  residence lines for home
office purposes,  Internet access and children's phones. We added 385,000 second
lines since last year, increasing the penetration rate to 16.6%. Business access
lines, including data circuits, grew 25.2% propelled by expanding demand for our
digital and data services. Switched business access lines grew 2.5% to 7,325,000
lines in service.  This growth rate reflects the continued  migration of new and
existing business customers to high-capacity data lines.

     Revenues from optional convenience features such as custom calling features
(e.g., Caller ID, Call Waiting, Call Return) and MemoryCall(R) service increased
$77 or 21.6%. We continued to drive growth of convenience  feature usage through
our Complete Choice Package, a one-price bundled offering of over 20 features.

     Increased  penetration  of extended local area calling plans also increased
revenues by approximately $44 over first quarter 1998.

Network access
     Network  access  revenues grew $40 in first  quarter  1999,  due largely to
higher  demand.  Access  minutes  of use rose  6.9% to 26,825  million  in first
quarter 1999 from 25,082  million in first quarter  1998.  Increases in switched
access lines and promotional activities by long distance carriers continue to be
the primary  drivers of the increase in minutes of use. The growth rate in total
minutes of use  continues  to be  negatively  impacted  by  competition  and the
migration of long  distance  carriers to  categories of service (such as special
access) that have a fixed  charge and are  excluded  from minutes of use counts.
Revenues from special access services grew approximately $34 as Internet service
providers and high-capacity users increased their use of our network.

     These  increases  were  largely  offset by rate  reductions  related to the
Federal  Communications  Commission's  productivity factor adjustment and access
reform that decreased revenues by $38 compared to first quarter 1998.


<PAGE>

Long distance
     The $25 decrease is primarily  attributable to a regulatory  ruling related
to compensation we receive from long distance  carriers for  interconnection  to
our public payphones.  Also contributing to the decline in revenues was an 11.9%
decrease in long distance  message  volumes since first quarter 1998.  Partially
offsetting these decreases were increased revenues from the provision of digital
and data services and independent company settlements occurring in first quarter
1999.

     Competition from alternative intraLATA long distance carriers and increased
penetration  of extended  local area calling  plans  continue to have an adverse
impact  on our long  distance  message  volumes.  Effective  February  1999,  we
implemented  1+ dialing  parity for all states in our region,  which  allows our
customers to choose an intraLATA long distance  carrier without having to dial a
special access code. We believe that  competition in the intraLATA long distance
market will  continue to  adversely  impact long  distance  message  volumes and
revenues.

Other wireline
     The $48 increase is  attributable  to higher revenues in first quarter 1999
from sales of customer  premises  equipment,  revenues from our Internet  access
offering and  interconnection  revenues  from  wireless  carriers.  We ended the
quarter with over 469,000  subscribers  to our  BellSouth.net  (sm) service,  an
increase of 125% compared to first quarter 1998.


Operating Expenses

Operational and support expenses
     Operational  and support  expenses  increased $106 (5.4%) for first quarter
1999 when compared to first  quarter  1998.  Adjusted for the impact of adopting
the new rules on software capitalization, expenses increased $197 (10.0%).

     Increased  labor  costs,  primarily  in our  customer  service  and network
support  functions,  and  other  increased  costs  in the  telephone  operations
associated  with  higher  business  volumes  were the main  contributors  to the
increase.  Also  contributing to the increase were expenses  related to new data
initiatives,  including Asymmetric Digital Subscriber Line (ADSL) and integrated
fiber-in-the-loop  (IFITL),  and promotional  expenses  related to expanding our
Internet customer base.

     We anticipate  making ADSL service  available in 30 markets this year, with
an  addressable  market  of  approximately  5.2  million  access  lines.  We are
currently  deploying  IFITL in nearly  all newly  built  neighborhoods  and some
200,000 homes in Atlanta and Miami.

Depreciation and amortization
     Depreciation and  amortization  expense was relatively flat compared to the
prior year,  increasing $7 or 0.8%. While gross  depreciable  plant increased by
$2,614 or 5.4% over the prior year, the overall composite  depreciation rate was
slightly lower, resulting in flat depreciation expense.


<PAGE>

--------------------------------------------------------------------------------
Domestic Wireless
--------------------------------------------------------------------------------

     Domestic  wireless is comprised  of cellular  and  personal  communications
service (PCS) businesses principally within the southeastern United States.

------------------------------------------ ----------------------- -----------
                                               First Quarter           %
                                              1999        1998       Change
------------------------------------------ ----------- ----------- -----------

------------------------------------------ ----------- ----------- -----------
Operating revenues                               $748        $646        15.8
------------------------------------------ ----------- ----------- -----------
Operating expenses                               $661        $555        19.1
------------------------------------------ ----------- ----------- -----------
Operating income                                  $87         $91        (4.4)
------------------------------------------ ----------- ----------- -----------
Net equity in earnings (losses) of
  unconsolidated businesses                       $31         $35       (11.4)
------------------------------------------ ----------- ----------- -----------
Segment net income                                $60         $69       (13.0)
------------------------------------------ ----------- ----------- -----------

------------------------------------------ ----------- ----------- -----------
EBITDA                                           $225        $214         5.1
------------------------------------------ ----------- ----------- -----------
EBITDA margin                                    30.1%       33.1%    -300bps
------------------------------------------ ----------- ----------- -----------

Operating Revenues

     Revenue growth of $102 in our consolidated  domestic  wireless business can
be attributed to a 22.0% increase in the customer base since first quarter 1998,
partially  offset  by  a  decline  in  average  monthly  revenue  per  customer.
Advertising,  enhanced volume pricing  strategies  (including bundled minutes at
lower rates) and  competitive  incentive  programs (such as discounted  cellular
handsets)  were key  drivers of the  customer  growth.  The  decrease in average
monthly revenue per customer is due to rate reductions and discounts  offered to
customers in response to an increasingly competitive environment.

     We expect  competition to intensify in our markets and continue to pressure
pricing. This should,  however,  stimulate demand and lead to increased usage as
the overall market is expanded.

Operating Expenses

Operational and support expenses
     These  expenses  increased  $91 or 21.1% to $523 as a result  of  increased
customer  acquisition  costs associated with higher customer  additions in first
quarter 1999 compared to first  quarter  1998. We have  continued our efforts to
migrate our customer base from analog to digital service. We have moved over 40%
of our subscriber  base to digital and have increased  digital minutes of use to
over 50% of total network usage.  The combination of higher  customer  additions
and digital  conversion  negatively  impacted  the  quarter-over-quarter  margin
comparison but will enable greater  revenue growth and  operational  efficiency.
Expenses  related  to our new PCS  markets  also  contributed  to the  increase.
Operational   and  support   expenses  have  benefited  from  reduced   customer
acquisition costs as we shift to lower cost, direct sales channels.

Depreciation and amortization
     Depreciation and amortization  increased $15 or 12.2% to $138. The increase
was primarily  attributable  to higher  levels of property,  plant and equipment
since first quarter 1998. The increased investment is the result of the buildout
of PCS markets,  expansion of the network related to growth in the customer base
and deployment of digital cellular across all of our consolidated markets.

Net Equity in Earnings (Losses) of Unconsolidated Businesses

     Equity in earnings (losses) of unconsolidated  domestic wireless businesses
decreased $4 compared to first quarter 1998 principally due to lower earnings at
our  business  in Los  Angeles.  Earnings  were lower due to  acquisition  costs
associated with higher  customer  additions and increased  amortization  expense
which  resulted from the  reorganization  of our  ownership  interests in fourth
quarter 1998. This decrease was partially offset by stronger  operating  results
at our other unconsolidated markets.


<PAGE>

--------------------------------------------------------------------------------
International Operations
--------------------------------------------------------------------------------

     International  operations is comprised  principally  of our  investments in
cellular  and PCS  businesses  in nine  countries  in Latin  America  as well as
Denmark, Germany, India and Israel.

------------------------------------------ ----------------------- -----------
                                               First Quarter           %
                                              1999        1998       Change
------------------------------------------ ----------- ----------- -----------

------------------------------------------ ----------- ----------- -----------
Operating revenues                               $561        $452        24.1
------------------------------------------ ----------- ----------- -----------
Operating expenses                               $510        $401        27.2
------------------------------------------ ----------- ----------- -----------
Operating income                                  $51         $51          --
------------------------------------------ ----------- ----------- -----------
Net equity in earnings (losses) of
  unconsolidated businesses                      $(13)       $(21)        N/M
------------------------------------------ ----------- ----------- -----------
Segment net loss                                 $(20)        $(5)        N/M
------------------------------------------ ----------- ----------- -----------

------------------------------------------ ----------- ----------- -----------
EBITDA                                           $154        $121        27.3
------------------------------------------ ----------- ----------- -----------
EBITDA margin                                    27.5%       26.8%     +70bps
------------------------------------------ ----------- ----------- -----------

Operating Revenues

     Consolidated  revenues are from our  operations  in  Venezuela,  Argentina,
Chile,  Ecuador and Peru and, in the prior year, New Zealand.  The $109 increase
since first quarter 1998 is primarily due to substantial  growth in the customer
bases of these operations, which collectively have grown over 61% to 2.9 million
total  customers  at the end of  first  quarter  1999.  Much of this  growth  is
attributable  to the  continued  success of prepaid  calling  programs  in these
operations.  Partially  offsetting  the  increase is the loss of  revenues  from
BellSouth  New Zealand,  which was sold during fourth  quarter  1998,  and lower
revenues  in Chile due to intense  price  competition  in that  market.  Overall
weakening of local currencies also impacted revenue growth on a US Dollar basis.

Operating Expenses

Operational and support expenses
     The $76  increase is  primarily  the result of customer  acquisition  costs
associated with significant  increases in customer additions.  The increase also
reflects additional operational costs associated with higher customer levels and
expanded  operations.  Offsetting  this  increase  were  prior  period  expenses
incurred by BellSouth New Zealand.

Depreciation and amortization
     Depreciation   expense   increased   $18  due  primarily  to  higher  gross
depreciable  plant  resulting  from the  continued  investment  in our  wireless
network  infrastructure  and digital  conversion  of our  network in  Venezuela.
Amortization expense increased $15 as a result of increased  intangibles related
to our purchase of  additional  ownership  interests in several  Latin  American
operations as well as new wireless licenses.

Net Equity in Earnings (Losses) of Unconsolidated Businesses

     The  improvement  in equity in earnings  (losses)  from our  unconsolidated
international  businesses  is due to stronger  results from our  investments  in
Germany,  Panama,  Nicaragua and Israel,  all of which  experienced  substantial
growth in their customer bases compared to first quarter 1998. Offsetting  these
improvements  were start-up  losses related to our  operations in Brazil,  which
were  launched in May 1998,  and less  favorable  results  from our  business in
Denmark due to customer  acquisition  costs  associated with higher net customer
additions.

     In Brazil,  the economic  situation resulted in weaker than expected growth
during first quarter 1999.  This is indicated by slower than expected  growth in
total  customers.  While  the  Brazilian  Real  has  strengthened  and  begun to
stabilize, the long-term impact on our operations is not known.


<PAGE>

--------------------------------------------------------------------------------
Advertising and Publishing
--------------------------------------------------------------------------------

     Our  advertising  and  publishing  business is comprised of companies  that
publish,  print,  sell advertising in, and perform related  services  concerning
alphabetical  and  classified  telephone   directories  and  electronic  product
offerings.

----------------------------------------- ----------------------- -----------
                                              First Quarter           %
                                             1999        1998       Change
----------------------------------------- ----------- ----------- -----------

----------------------------------------- ----------- ----------- -----------
Operating revenues                              $346        $338         2.4
----------------------------------------- ----------- ----------- -----------
Operating expenses                              $206        $201         2.5
----------------------------------------- ----------- ----------- -----------
Operating income                                $140        $137         2.2
----------------------------------------- ----------- ----------- -----------
Net equity in earnings (losses) of
  unconsolidated businesses                      $(1)        $--         N/M
----------------------------------------- ----------- ----------- -----------
Segment net income                               $84         $86        (2.3)
----------------------------------------- ----------- ----------- -----------

----------------------------------------- ----------- ----------- -----------
EBITDA                                          $146        $143         2.1
----------------------------------------- ----------- ----------- -----------
EBITDA margin                                   42.2%       42.3%     -10bps
----------------------------------------- ----------- ----------- -----------

Operating Results

     Operating  revenues were up $8 principally as a result of increased pricing
and volumes,  offset by the effects of shifts in directory production schedules.
Adjusted for book shifts,  revenues would have increased by approximately  4.6%.
Also contributing to the increased  revenues are our electronic media offerings,
but to a lesser extent.

     Operational  and support  expenses  increased $5 due to higher salaries and
wages and marketing expenses offset by lower production costs.  Depreciation and
amortization was flat as there were no appreciable increases in property,  plant
and equipment.

     Net equity in earnings (losses) of unconsolidated  businesses  includes the
results of our new international investments in directory publishers in Peru and
Brazil. We plan to continue exploring  international  growth  opportunities that
capitalize on existing directory core competencies.

--------------------------------------------------------------------------------
Other
--------------------------------------------------------------------------------

     This segment is primarily  comprised of our communications  group companies
-- including new business  initiatives such as entertainment (cable television),
wireless data and plans for interLATA long distance.

     In  addition,  the  stand-alone  results of our Internet  access  marketing
company are included in this segment. These revenues and expenses are eliminated
in consolidation and reported as part of the wireline communications results.


<PAGE>

     Also included are businesses  whose primary purpose is to support our other
operating segments.

------------------------------------------ ----------------------- -------------
                                               First Quarter            %
                                              1999        1998        Change
------------------------------------------ ----------- ----------- -------------

------------------------------------------ ----------- ----------- -------------
Operating revenues                               $120         $72          66.7
------------------------------------------ ----------- ----------- -------------
Operating expenses                               $204        $136          50.0
------------------------------------------ ----------- ----------- -------------
Operating loss                                   $(84)       $(64)        (31.3)
------------------------------------------ ----------- ----------- -------------
Net equity in earnings (losses) of
  unconsolidated businesses                       $ 1         $(3)          N/M
------------------------------------------ ----------- ----------- -------------
Segment net loss                                 $(57)       $(40)        (42.5)
------------------------------------------ ----------- ----------- -------------

------------------------------------------ ----------- ----------- -------------
EBITDA                                           $(53)       $(42)        (26.2)
------------------------------------------ ----------- ----------- -------------
EBITDA margin                                   (44.2%)     (58.3%)         N/M
------------------------------------------ ----------- ----------- -------------

Operating Results

     External  revenues nearly tripled to $50 from $18 since first quarter 1998,
driven by growth in our  communications  group  companies.  Since first  quarter
1998,  we have  rolled  out cable  television  service in four new  markets  and
introduced interactive paging service with nationwide coverage.

     Operating expenses reflect increased  spending  associated with new product
and/or  market  introductions  in  all of  these  businesses.  Higher  headcount
associated with customer support and installation  functions also contributed to
the increase in expenses. Depreciation and amortization has increased reflecting
our  continuing  investment  of  resources  associated  with the growth of these
businesses.

--------------------------------------------------------------------------------
Other Nonoperating Items
--------------------------------------------------------------------------------


------------------------------------------ ----------------------- -----------
                                               First Quarter           %
                                              1999        1998       Change
------------------------------------------ ----------- ----------- -----------

Interest Expense                                 $226        $190        18.9
Gain on Sale of Operations                          -         155         N/M
Net Equity in Earnings (Losses) of
  Unconsolidated Businesses                      (266)         11         N/M
Other Income, net                                  59          17         N/M
Provision for Income Taxes                        559         555         0.7

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

Interest expense
     Higher  interest  expense  is  attributable  to  a  higher   proportion  of
capitalized  interest in first quarter 1998 and higher  average debt balances in
first quarter 1999. We capitalized a greater  proportion of our interest in 1998
due to our start-up  investments  in Brazil.  Our average debt  balances were as
follows:

----------------------------------------- ----------------------- -----------
                                              First Quarter           %
                                             1999        1998       Change
----------------------------------------- ----------- ----------- -----------

----------------------------------------- ----------- ----------- -----------
Average short-term debt balance               $3,928      $3,506        12.0
----------------------------------------- ----------- ----------- -----------
Average long-term debt balance                $8,847      $7,524        17.6
----------------------------------------- ----------- ----------- -----------
 Total average debt balance                  $12,775     $11,030        15.8
----------------------------------------- ----------- ----------- -----------

     We expect interest expense to increase  beginning in second quarter 1999 as
we plan to fund the  announced  investment  in Qwest  Communications  with  $2.5
billion of debt.


<PAGE>

Gain on sale of operations
     During first quarter 1998, we received  additional  proceeds from the prior
sale of our interest in ITT World  Directories  resulting in a gain of $155 ($96
or $.05 per share after tax).

Net  equity in earnings (losses) of  unconsolidated  businesses 
     The decrease was driven by foreign  exchange  losses of $280 related to our
Brazilian  properties (see Note E to the consolidated  financial  statements for
further discussion of this matter).  Excluding the impact of this event, the net
results  of our  unconsolidated  businesses  remained  relatively  flat  and are
discussed in the results for the Domestic wireless and International  operations
segments.

Other income, net
     Other income, net includes interest income,  gains/losses on disposition of
assets, foreign currency gains/losses and miscellaneous nonoperating income. The
increase of $42 over the prior year is attributable to accruals  recorded in the
prior year and  increases in other  nonoperating  income in first  quarter 1999.
Partially  offsetting these increases were higher foreign exchange losses in our
consolidated international businesses and decreased interest income due to lower
average cash balances.

Provision for income taxes
     The provision for income taxes was flat quarter-over-quarter. The effective
rate for first  quarter 1999 was 47.6%  compared to 38.4% in first quarter 1998.
The effective tax rate was significantly impacted by the foreign exchange losses
recorded at our  unconsolidated  Brazilian  businesses.  Excluding the effect of
these  losses,  our effective  rate in first quarter 1999 was 38.4%,  consistent
with the prior year and in line with our expected rate for 1999.

--------------------------------------------------------------------------------
Financial Condition
--------------------------------------------------------------------------------

     Cash flows from  operations  are our primary  source of funding for capital
requirements  of  existing  operations,   debt  service,   dividends  and  share
repurchases.  We  also  have  ready  access  to  capital  markets  in the  event
additional  funding is  necessary.  While  current  liabilities  exceed  current
assets,  our sources of funds -- primarily  from  operations  and, to the extent
necessary,  from  readily  available  external  financing  arrangements  --  are
sufficient to meet all current  obligations  on a timely basis.  We believe that
these  sources of funds will be sufficient to meet the needs of our business for
the foreseeable future.

Net cash provided by (used for):
----------------------------- ----------- ------------- ------------------------
                                  1999         1998              Change

Operating activities.....       $ 1,642      $ 2,056        $(414)     (20.1%)
Investing activities.....       $(1,478)     $(1,593)       $ 115        7.2%
Financing activities.....       $(1,388)     $  (913)       $(475)     (52.0%)

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

Net cash provided by operating activities
     The  decrease  in cash from  operations  primarily  reflects an increase in
working capital requirements offset by higher EBITDA.

Net cash used in investing activities
     During  first   quarter   1999,   we  invested  $1.4  billion  for  capital
expenditures  to support our  wireline  and  wireless  networks,  to promote the
introduction of new products and services and increase operating  efficiency and
productivity.  Significant investments are also being made to support deployment
of ADSL and fast packet switching  technologies as well as our IFITL initiative.
Included in these  expenditures for first quarter 1999 are approximately $114 in
costs related to internal-use software.

     During  April  1999,  we  announced  a new  business  agreement  with Qwest
Communications  that  includes  our  purchasing  a ten  percent  stake  for $3.5
billion.  This  transaction  is expected to close during second quarter 1999. We
intend to finance this investment with $2.5 billion of long-term debt.


<PAGE>

     Our  previously  announced  agreement to lease our wireless  communications
towers to Crown Castle  International  is expected to generate  cash proceeds in
excess of $400. This transaction is scheduled to close in phases  throughout the
remainder of 1999.

     First  quarter 1998  includes  $155 in proceeds  related to the sale of our
investment in ITT World Directories.

Net cash used in financing activities
     During the first  quarter of 1999,  we purchased  approximately  43 million
shares as part of our $3 billion  repurchase  plan  announced in December  1998.
Combined with our 1998  repurchases,  we have reduced our number of  outstanding
shares by 74 million  since March 31,  1998.  We expect to complete  the buyback
plan by the end of May 1999.

     Our debt to total capitalization ratio was 47.3% at March 31, 1999 compared
to 43.0% at December  31, 1998.  The increase is a function of the  reduction in
shareholders'  equity,  driven by the effect of our stock buyback  program,  and
increases in short-term debt attributable to higher net borrowings of commercial
paper.

     At May 6, 1999, we have shelf registration  statements on file with the SEC
under which $5.2 billion of debt securities could be publicly offered.

Market Risk

     For a complete  discussion  of our market  risks,  you should  refer to the
caption  "Market  Risk" in our 1998  Annual  Report on Form  10-K.  Our  primary
exposure to market risks relates to unfavorable  movements in interest rates and
foreign currency exchange rates. There have been no additional  material changes
to the market risks described at December 31, 1998.

Anticipated transactions
     Our exposure to market risk is expected to increase in second  quarter 1999
related to financing our investment in Qwest  Communications  with new long-term
debt.  We do not  anticipate  any  significant  changes  in our  objectives  and
strategies with respect to managing such exposures.


--------------------------------------------------------------------------------
Operating Environment and Trends of the Business
--------------------------------------------------------------------------------

Regulatory Developments

Reciprocal Compensation. See Note J  to the consolidated financial statements.

South Carolina Supreme Court Decision. See Note K to the consolidated  financial
statements.

International Operations

Fluctuations in foreign exchange rates
     Our equity  investments  in  international  wireless  systems are viewed as
long-term assets valued in the local currency,  translated into US Dollars,  and
reported in our consolidated  financial  statements.  Foreign currency  exchange
rate  fluctuations  may be  material  to results of  operations.  A  significant
weakening  against  the Dollar of the  currency  of a country  where we generate
revenues  and  earnings may  adversely  impact our results,  such as occurred in
Brazil during the first quarter.

     Any  weakening  of the  Dollar  against  foreign  currencies  could have an
adverse  impact  on  cash  flows  if  we  are  obligated  to  make   significant
foreign-currency-denominated  capital  investments.  We attempt to mitigate  the
effect of  certain  foreign  currency  fluctuations  through  the use of foreign
currency contracts.


<PAGE>

     During January 1999, the government of Brazil allowed its currency to trade
freely against other  currencies.  As a result,  the Brazilian Real  experienced
devaluation  against the US Dollar.  The  devaluation  resulted in the  entities
recording   exchange   losses   related  to  their  net  US   Dollar-denominated
liabilities.  Our share of the foreign  exchange  rate losses for first  quarter
1999 was $280.

     The impact of the devaluation on an operation  depends on the devaluation's
effect on the local  economy and the  ability of an  operation  to raise  prices
and/or reduce expenses.  Additionally, the economies of other countries in Latin
America could be adversely impacted by economic and monetary problems in Brazil.
For instance,  Ecuador  recently  experienced  devaluation in its currency.  The
impact,  however, was not material to our operations.  The likelihood and extent
of further devaluation and deteriorating  economic conditions in Brazil or other
Latin  American  countries  experiencing  similar  conditions  and the resulting
impacts on our results of operations,  financial  position and cash flows is not
known.

Euro conversion
     In January 1999, certain member countries of the European Union established
permanent,  fixed  conversion  rates between their  existing  currencies and the
European  Union's common currency (the Euro).  The Euro will be phased in over a
transition  period  culminating  on January  1, 2002 at which time all  existing
currencies will be withdrawn from circulation.  We have investments in companies
operating  in  Germany,   Denmark,  Belgium  and  the  Netherlands,   which  are
participating in the Euro conversion. We do not believe that the Euro conversion
will have a material effect on these investments.

Year 2000 Readiness Disclosure

 You should  note that the  following  discussion  about the Year 2000  includes
certain forward-looking  statements that are subject to risks and uncertainties.
Factors  that  could  cause  actual  results  to differ  materially  from  those
expressed in the forward-looking statements include, but are not limited to:

 o Our Year 2000 program is not  complete;  ongoing  implementation  and testing
could reveal the need for additional unplanned remedial efforts;

 o Third party vendors and suppliers could fail to meet their stated objectives,
timetables or cost estimates; and

 o Our timetable or cost estimates could be impacted by unforeseen  shortages of
skilled personnel.

 We have  initiated  a  company-wide  program to  identify  and  address  issues
associated  with the ability of our  date-sensitive  information,  telephony and
business systems and certain equipment to properly  recognize the Year 2000 as a
result of the century change on January 1, 2000. The program is also designed to
assess the readiness of other entities with which we do business.

 Inability to reach substantial Year 2000 compliance in our systems and integral
third party systems could result in interruption of telecommunications services,
interruption or failure of our customer billing, operating and other information
systems and failure of certain  date-sensitive  equipment.  These failures could
result in  substantial  claims by  customers  as well as loss of revenue  due to
service interruption, delays in our ability to bill our customers accurately and
timely,  and increased  expenses  associated with  litigation,  stabilization of
operations following such failures or execution of contingency plans.

 Our  Year  2000  program  is  being  conducted  by a  management  team  that is
coordinating  efforts of internal resources as well as third party providers and
vendors in identifying  and making  necessary  changes to our systems  hardware,
software  and   date-sensitive   equipment.   The  program  also   includes  the
international and domestic  companies in which we hold an interest.  Some of the
changes that are necessary in our operations are being made as a part of ongoing
systems upgrades.


<PAGE>

 Our Year 2000 program has been divided  into six phases:  planning;  inventory;
impact  analysis;  conversion;  testing;  and  implementation.  We  monitor  our
progress  within these six phases based on the number of inventoried  items that
have been addressed.  Management's  target date for completion of all phases for
most of our  mission  critical  applications  is  July  1999.  Mission  critical
applications include those that:

o directly affect delivery of primary services to our customers;  
o directly affect our revenue recognition and collection; 
o would create noncompliance with any statutes or laws; and 
o would require significant costs to address in the event of noncompliance.


 We have identified three main areas of focus for our Year 2000 program: network
components;  information  technology  systems;  and building  and  environmental
systems. Each focus area includes the hardware,  software, embedded chips, third
party vendors and suppliers as well as third party  networks that are associated
with the  identified  systems.  At March 31, 1999,  the planning,  inventory and
impact  analysis  phases have been  substantially  completed and the conversion,
testing  and  implementation  phases  are well  under  way.  Our  status for the
conversion, testing and implementation phases is as follows:

Network components
-------------------------------------------------- -------------------------
                                                      Overall Completion
                                                          Percentage
-------------------------------------------------- -------------------------

Wireline Communications........................              85%
Other Domestic Operations......................              35%
International Operations.......................              85%

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

 This focus area consists of the switches,  transmission  systems and associated
software that comprise the core of our telephony systems including  landline and
wireless  domestic and  international  services.  Outside  suppliers provide all
hardware and most  software that comprise our  networks;  these  components  are
being remediated by those third party  suppliers.  Either we, our vendors and/or
industry  groups  such as the Telco  Year 2000 Forum are  performing  testing of
these components for compliance.

     By the end of April 1999, our other  domestic  operations had increased the
completion   of  its  overall   conversion,   testing  and   implementation   to
approximately  65%.  Progress in all areas is  expected  to continue  throughout
second quarter 1999.

Information technology systems
-------------------------------------------------- -------------------------
                                                      Overall Completion
                                                          Percentage
-------------------------------------------------- -------------------------

Wireline Communications........................              70%
Other Domestic Operations......................              80%
International Operations.......................              75%

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

 This focus area  consists of those  systems that  primarily  support  "customer
care"  operations  such as order  taking and  billing.  The  software  for these
systems was developed by both us and vendors and is being  remediated and tested
by both.


<PAGE>

Building and environmental systems
-------------------------------------------------- -------------------------
                                                      Overall Completion
                                                          Percentage
-------------------------------------------------- -------------------------

Wireline Communications........................              40%
Other Domestic Operations......................              30%
International Operations.......................              85%

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

 This focus area  includes  various  products  and systems  that are not used in
support  of network or  customer  care  functions.  Building  and  environmental
systems are primarily provided by third parties and include building operations,
office equipment, utilities, etc.

 Buildings are not considered  fully  converted,  tested and  implemented  until
every  environmental  component  within the building is  complete.  The wireline
communications  segment has completed  approximately  85% of the  conversion and
testing efforts for individual environmental components,  and our other domestic
operations have completed approximately 45% of their individual components.

 Contingency plans. We have developed  numerous  continuity plans for conducting
our business  operations  in the event of crises  including  system  outages and
natural disasters.  We have chartered a Year 2000 Business  Contingency Planning
project to ensure that contingency  plans are developed and tested,  and support
infrastructures  are in place.  This effort is not limited to the risks posed by
the potential Year 2000 failures of our networks,  internal  information systems
or  infrastructures,  but also includes the potential  secondary impact on us of
Year 2000 failures,  including  potential  systems failures of business partners
and  infrastructure  service  providers.  Business impact  assessments have been
substantially  completed,  and the  completion of  contingency  plan testing and
sign-off is scheduled for third quarter 1999.

 Costs of project.  Some of the costs  associated  with our Year 2000 compliance
efforts were incurred in 1997 and 1998. We will incur the remainder  during 1999
and 2000. You should note that costs are not incurred equally over all phases of
the project,  but increase  over time.  We anticipate  that the  conversion  and
testing  phases will require an increase in spending over the earlier  phases of
the project.  At March 31, 1999,  we have spent  approximately  $123 in external
costs towards Year 2000  compliance.  We estimate the total external cost of our
compliance  efforts  will be between $250 and $350 over the life of the project.
We intend to  continually  reassess the estimated  costs and status of Year 2000
remediation efforts.

 Expected completion.  We currently anticipate that most of our mission critical
applications  will be Year 2000  compliant  by July  1999.  However,  unforeseen
circumstances  such as those  discussed  previously  could  affect  our  current
assessments.  As a result, we are unable to determine the impact that any system
interruption  would have on our results of  operations,  financial  position and
cash flows.

New Accounting Pronouncements

 In June 1998,  the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities." The standard  requires that all derivative
instruments  be recognized as assets or  liabilities  and adjusted to fair value
each  period.  We will adopt  SFAS No. 133 on January 1, 2000 and are  currently
assessing the impact that  adoption  will have on our results of operations  and
financial position.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 See the caption labeled  "Market Risk" in Management's  Discussion and Analysis
of Results of Operations and Financial Condition.


<PAGE>

--------------------------------------------------------------------------------
            Cautionary Language Concerning Forward-Looking Statements
--------------------------------------------------------------------------------

 In addition to historical  information,  management's  discussion  and analysis
includes  certain  forward-looking  statements  regarding  events and  financial
trends  that may affect our future  operating  results and  financial  position.
Words such as "expect,"  "forecast,"  "intend,"  "plan," "will,"  "anticipates,"
"achieve,"  "initiatives"  or similar  expressions are intended to identify such
forward-looking  statements.  These  statements are based on our assumptions and
estimates and are subject to risks and uncertainties.  For these statements,  we
claim the protection of the safe harbor for forward-looking  statements provided
by the Private Securities Litigation Reform Act of 1995.

 Factors that could affect future operating  results and financial  position and
could cause  actual  results to differ  materially  from those  expressed in the
forward-looking statements are:

 o a change in economic conditions in domestic or international markets where we
operate or have material investments which would affect demand for our services;
 
 o the intensity of  competitive  activity and its  resulting  impact on pricing
strategies  and new  product  offerings;  
 
 o further  delay in our entry into the interLATA long distance market;
 
 o higher than anticipated  start-up costs or significant  up-front  investments
associated with new business initiatives;
 
 o   unanticipated   higher   capital   spending  from  the  deployment  of  new
technologies;
 
 o  unsatisfactory  results  in  regulatory  actions  including  access  reform,
universal service,  terms of interconnection  and unbundled network elements and
resale rates; and
 
 o failure to  satisfactorily  identify  and  complete  Year 2000  software  and
hardware revisions by us and entities with which we do business.

 These cautionary  statements  should not be construed as exhaustive.  These and
other  developments  could cause our actual  results to differ  materially  from
those forecast or implied in the aforementioned  forward-looking statements. You
are cautioned not to place undue reliance on these  forward-looking  statements,
which are current only as of the date of this filing.  We have no  obligation to
publicly  release  the  results  of  any  revisions  to  these   forward-looking
statements to reflect events or circumstances after the date of this filing.



<PAGE>



--------------------------------------------------------------------------------
PART II -- OTHER INFORMATION
--------------------------------------------------------------------------------


Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:

     Exhibit
     Number

 4a      No  instrument  which  defines  the  rights of holders of our long- and
         intermediate-term  debt is filed herewith  pursuant to Regulation  S-K,
         Item  601(b)(4)(iii)(A).  Pursuant  to this  regulation,  we  agree  to
         furnish a copy of any such instrument to the SEC upon request.

 10q-2   Amendment  dated March 22, 1999 to the  BellSouth  Personal  Retirement
         Account Pension Plan.

 10q-3   Amendment  dated  April 7, 1999 to the  BellSouth  Personal  Retirement
         Account Pension Plan.

 10z     BellSouth Compensation Deferral Plan, as amended and restated effective
         September 28, 1998.

 11      Computation of Earnings Per Common Share.

 12      Computation of Ratio of Earnings to Fixed Charges.

 27      Financial Data Schedule as of March 31, 1999.



(b) Reports on Form 8-K:

 Date of Event             Subject

January 20, 1999  BellSouth Recognizes Brazilian Currency Devaluation
January 25, 1999  Fourth Quarter 1998 Earnings Release and 1999 Financial 
                  Projection
March 30, 1999    Segment Reporting





<PAGE>



                                                         SIGNATURE


 Pursuant  to the  requirements  of the  Securities  Exchange  Act of 1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                                   BELLSOUTH CORPORATION
                                             By    /s/  W. Patrick Shannon
                                                   W. PATRICK SHANNON
                                             Vice President and Controller
                                             (Principal Accounting Officer)


May 10, 1999


<PAGE>


                                                       EXHIBIT INDEX

     Exhibit
     Number

 10q-2  Amendment  dated March 22,  1999 to the  BellSouth  Personal  Retirement
        Account Pension Plan.

 10q-3  Amendment  dated  April 7,  1999 to the  BellSouth  Personal  Retirement
        Account Pension Plan.

 10z    BellSouth  Compensation Deferral Plan, as amended and restated effective
        September 28, 1998.

 11     Computation of Earnings Per Common Share.

 12     Computation of Ratio of Earnings to Fixed Charges.

 27     Financial Data Schedule as of March 31, 1999.