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 June 30, 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 1-1049


                           BELLSOUTH TELECOMMUNICATIONS, INC.
                 (Exact name of registrant as specified in its charter)


           Georgia                               58-0436120
   (State of Incorporation)                  (I.R.S. Employer
                                             Identification Number)


                     675 West Peachtree Street, N. E., 30375
                           Atlanta, Georgia (Zip Code)
                    (Address of principal executive offices)

                   Registrant's telephone number 404 927-1909

THE REGISTRANT,  A WHOLLY-OWNED  SUBSIDIARY OF BELLSOUTH CORPORATION,  MEETS THE
CONDITIONS SET FORTH IN GENERAL  INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS
THEREFORE  FILING THIS FORM WITH REDUCED  DISCLOSURE  FORMAT PURSUANT TO GENERAL
INSTRUCTION H(2).

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 ___
<PAGE>
                                Table of Contents


Item                                                                Page
                                              Part I
1. Financial Statements
       Consolidated Statements of Income and Retained Earnings ...... 3
       Consolidated Balance Sheets .................................. 4
       Consolidated Statements of Cash Flows ........................ 5
       Notes to Consolidated Financial Statements ................... 6

2.  Management's Discussion and Analysis of Results of Operations ... 8

                                              Part II
6.  Exhibits and Reports on Form 8-K ................................14

<PAGE>
 PART I - FINANCIAL INFORMATION
------------------------------------------------------------------------------

                       BELLSOUTH TELECOMMUNICATIONS, INC.
             CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                   (Unaudited)
                              (Dollars In Millions)
<TABLE>
<CAPTION>

                                           For the Three Months                    For the Six Months
                                              Ended June 30,                         Ended June 30,
                                         1999               1998                1999                1998
<S>                                     <C>                <C>                 <C>                <C>
Operating Revenues:
   Local service ...................... $2,712             $2,502              $ 5,366            $ 4,916
   Network access .....................  1,187              1,160                2,378              2,311
   Long distance ......................    153                177                  303                352
   Other ..............................    374                297                  702                577
     Total Operating Revenues..........  4,426              4,136                8,749              8,156

Operating Expenses:
   Operational and support expenses ...  2,380              2,121                4,649              4,092
   Depreciation and amortization ......    850                836                1,683              1,662
     Total Operating Expenses .........  3,230              2,957                6,332              5,754

Operating Income ......................  1,196              1,179                2,417              2,402

Interest Expense ......................    133                144                  268                277
Other Income, net .....................     --                  2                    1                  4

Income Before Income Taxes ............  1,063              1,037                2,150              2,129
Provision for Income Taxes ............    401                393                  805                802

     Net Income ....................... $  662              $ 644              $ 1,345            $ 1,327

Retained Earnings:
  At beginning of period ..............$ 1,466            $ 1,270              $ 1,354            $ 1,140
  Add:  Net Income ....................    662                644                1,345              1,327
  Deduct:  Dividends Declared .........  (651)              (662)              (1,222)            (1,215)
  At end of period ....................$ 1,477            $ 1,252              $ 1,477            $ 1,252

</TABLE>


  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>
                       BELLSOUTH TELECOMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                  (In Millions)
<TABLE>
<CAPTION>

                                              June 30,             December 31,
                                                1999                   1998
                                             (Unaudited)
<S>                                                <C>                  <C>
ASSETS
Current Assets:
 Cash and cash equivalents ..................      $  179               $  337
 Accounts receivable, net of allowance for
    uncollectibles of $70 and $75 ...........       2,887                2,952
 Material and supplies ......................         280                  248
 Other current assets .......................         181                  177
   Total Current Assets .....................       3,527                3,714

Investments and Advances ....................         318                  310

Property, Plant and Equipment ...............      51,827               50,248
Less: accumulated depreciation ..............      32,412               31,240
   Property, Plant and Equipment, net .......      19,415               19,008

Deferred Charges and Other Assets ...........       1,318                  884

Total Assets ................................    $ 24,578              $23,916

LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
 Debt maturing within one year ..............     $ 2,196              $ 1,556
 Accounts payable ...........................       1,484                1,586
 Other current liabilities ..................       2,348                2,090
   Total Current Liabilities ................       6,028                5,232

Long-Term Debt ..............................       6,243                6,523

Noncurrent Liabilities:
 Deferred income taxes ......................       1,427                1,274
 Unamortized investment tax credits .........         147                  167
 Other noncurrent liabilities  ..............       1,823                1,945
   Total Noncurrent Liabilities .............       3,397                3,386

Shareholder's Equity:
 Common stock, one share, no par value ......       7,433                7,421
 Retained earnings ..........................       1,477                1,354

   Total Shareholder's Equity ...............       8,910                8,775

Total Liabilities and Shareholder's Equity ..     $24,578              $23,916

</TABLE>

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

                       BELLSOUTH TELECOMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                  (In Millions)
<TABLE>
<CAPTION>

                                                                   For the Six Months Ended June 30,
                                                                        1999               1998
<S>                                                                     <C>                 <C>
 Cash Flows from Operating Activities:
  Net income .......................................................... $1,345              $1,327
  Adjustments to net income:
      Depreciation and amortization ...................................  1,683               1,662
      Provision for uncollectibles ....................................     68                  68
      Deferred income taxes and unamortized investment tax credits ....    129                  22
  Net change in:
      Accounts receivable and other current assets ....................   (52)                  61
      Accounts payable and other current liabilities ..................    280                  18
      Deferred charges and other assets ...............................  (257)               (177)
      Other liabilities and deferred credits ..........................  (122)                (21)
  Other reconciling items, net ........................................     60                  50
      Net cash provided by operating activities .......................  3,134               3,010

 Cash Flows from Investing Activities:
  Capital expenditures ................................................(2,255)             (1,723)
  Other investing activities, net .....................................     6                  27

      Net cash used for investing activities ..........................(2,249)             (1,696)

 Cash Flows from Financing Activities:
  Net borrowings (repayments) of short-term debt ......................   313               (232)
  Proceeds from long-term debt.........................................    --                 994
  Repayments of long-term debt.........................................   (7)               (571)
  Advances from parent and affiliates .................................   224                 288
  Repayments of advances from parent and affiliates ...................  (215)               (289)
  Dividends paid to parent ............................................(1,358)             (1,202)
  Other financing activities, net......................................    --                  25
      Net cash used for financing activities ..........................(1,043)               (987)

 Net (Decrease) Increase in Cash and Cash Equivalents .................  (158)                 327
 Cash and Cash Equivalents at Beginning of Period .....................    337                  49
 Cash and Cash Equivalents at End of Period ........................... $  179               $ 376

</TABLE>



  The accompanying notes are an integral part of these consolidated financial
                                  statements.
<PAGE>
                       BELLSOUTH TELECOMMUNICATIONS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                  (In Millions)

Note A - Preparation of Interim Financial Statements

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

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 and
previous quarterly report on Form 10-Q.

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 that had previously been expensed.  The
1999  year-to-date  impact was an increase in income before income taxes of $217
and net income of $135. The adoption also changed the classification of these
expenditures  in the  consolidated  statements  of cash flows from  operating to
investing activities.

Note C - Segment Information

Our  predominant  products are local  exchange and long distance  communications
services  within LATAs  (referred to as intraLATA) and network access  services,
all of which are provided over a single network.  Operating  decisions regarding
resource  allocation  and  performance   evaluation  are  made  based  on  total
operations.  Based on these factors,  we have  determined that we operate as one
operating segment as defined by Statement of Financial  Accounting Standards No.
131.


Note D - Supplemental Cash Flow Information

                            For the Six Months
                              Ended June 30,
                           1999            1998
Cash Paid For:

   Income taxes .......... $ 304           $ 639
   Interest .............. $ 251           $ 266


<PAGE>
                       BELLSOUTH TELECOMMUNICATIONS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)
                                  (In Millions)


Note E - Contingencies

Following the enactment of the  Telecommunications  Act of 1996, we 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 us for compensation  associated with dial-up calls
originating on our network and connecting with Internet service providers (ISPs)
served by the CLECs' networks. It is our 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 regulatory commissions in our
operating territory 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.
Because previous state regulatory decisions were based upon a view that Internet
access calls are "local" rather than  interstate in nature,  we have asked those
regulators to revisit their prior interpretations. We have subsequently received
unfavorable rulings in Florida and Alabama but have appealed these decisions. We
believe  that we have a good  basis  for our  position.  At June 30,  1999,  our
exposure  related to these disputed  claims was  approximately  $140,  including
accrued interest.

Other reciprocal compensation issues

In a related matter, we uncovered other service  arrangements for which at least
one CLEC is claiming  terminating  compensation of approximately $115 that we do
not believe involves traffic under our interconnection  agreement. We have filed
a complaint with the state  regulatory  commission  asking that agency to hold a
hearing  regarding this arrangement and to declare that we do not owe reciprocal
compensation  for these minutes of use. The CLEC has filed a complaint  with the
state  regulatory  commission  asking it to order us to pay the amounts the CLEC
claims it is owed.  Hearings on this matter are  scheduled  for August 1999.  We
believe  that we  have a good  basis  for  our  position  and,  accordingly,  no
provision has been recorded for this claim in these financial statements.

<PAGE>
                       BELLSOUTH TELECOMMUNICATIONS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)
                                  (In Millions)


Note F - South Carolina Regulatory Matters

Beginning in 1996,  we operated  under a price  regulation  plan approved by the
South Carolina Public Service  Commission  (SCPSC) under existing state laws. In
April 1999,  however,  the South Carolina Supreme Court  invalidated the SCPSC's
order  approving  this price  regulation  plan.  In July 1999,  we elected to be
regulated under a new state statute,  adopted subsequent to the SCPSC's approval
of the  earlier  plan.  The new  statute  allows  telephone  companies  in South
Carolina to operate under price regulation  without obtaining  approval from the
SCPSC. The election will become effective August 13, 1999.

The South Carolina  Consumer Advocate has petitioned the SCPSC seeking review of
the level of our earnings during the 1996-1998 period when we operated under the
previously  invalidated price regulation plan. We have filed a motion seeking to
have that petition dismissed.

During the second  quarter of 1999, we settled  several other  challenges to our
earnings and rates in South Carolina. Under the terms of the settlement, we have
reduced access charges and other services (principally  convenience features) by
an  aggregate  of $21 on an annual basis and will,  as of January  2000,  reduce
certain business and residence rates by one dollar per line, per month to remain
in effect for a minimum of five years.
<PAGE>


                       BELLSOUTH TELECOMMUNICATIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                              RESULTS OF OPERATIONS
                              (Dollars in Millions)

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  (MD&A) in conjunction with the
MD&A in our latest annual report on Form 10-K and previous  quarterly  report on
Form 10-Q.
-------------------------------------------------------------------------------
Results of Operations
-------------------------------------------------------------------------------

Our reported  results  include the effect of charges from an affiliated  company
for use of intellectual property rights related to trademarks, service marks and
patents.  These charges  increased our reported second quarter and  year-to-date
1999  operational  and  support  expenses  by $194 and $386,  respectively,  and
reduced our reported net income by $119 and $237, respectively, when compared to
the  same  1998  periods.  To  assist  your  understanding  of  the  results  of
operations, the following discussion excludes the effect of these charges, which
are  eliminated in the  consolidated  financial  results of our parent  company,
BellSouth Corporation.

Key financial and operating  data for second quarter and  year-to-date  1999 and
1998,  adjusted  to exclude the effect of the charges  discussed  above,  are as
follows:
<TABLE>
<CAPTION>

                                   ----------------------- -------------- -- ------------------------- --------
                                       Second Quarter            %                 Year-to-Date            %
                                   -----------------------                   -------------------------
                                      1999        1998        Change             1999         1998      Change
                                    ----------- ----------- ----------- -- ------------- ----------- ------------

<S>                                   <C>         <C>             <C>          <C>         <C>              <C>
Revenues.                             $ 4,426     $ 4,136         7.0          $ 8,749     $ 8,156          7.3
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Expenses.                             $ 3,036     $ 2,957         2.7          $ 5,946     $ 5,754          3.3
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Operating income..                    $ 1,390     $ 1,179        17.9          $ 2,803     $ 2,402         16.7
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Net income........                      $ 781       $ 644        21.3          $ 1,582     $ 1,327         19.2
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
EBITDA... (a)                         $ 2,240     $ 2,015        11.2          $ 4,486     $ 4,064         10.4
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
EBITDA margin.....                      50.6%       48.7%     +190bps            51.3%       49.8%      +150bps
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Access line counts (000's):
  Switched access lines                24,370      23,660         3.0
  Access line equivalents(b)           16,925      12,346        37.1
    Total equivalent access lines      41,295      36,006        14.7
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Access minutes of use (millions)       27,627      26,240         5.3           54,452      51,322          6.1
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Digital and data services revenues      $ 592        $451        31.3          $ 1,127       $ 866         30.1
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
Convenience feature revenues            $ 466        $390        19.5            $ 900       $ 747         20.5
---------------------------------------------- ----------- ----------- -- ------------- ----------- ------------
</TABLE>

(a)  EBITDA  represents  income before  net  interest  expense,  income   taxes,
     depreciation  and  amortization  and other income,  net. We present  EBITDA
     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 we believe that EBITDA is an additional
     meaningful measure of performance and liquidity.  EBITDA does not represent
     cash flows for the period,  nor is it an  alternative  to operating  income
     (loss) as an indicator of operating performance. You should not consider it
     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)  Represents the  approximate  number of switched  access lines that would be
     functionally equal to non-switched, high-capacity digital and data circuits
     in service.

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

Our 1999 year-to-date  results reflect strong revenue growth driven by growth in
digital  and data  services  revenues  when  compared to the first six months of
1998.  Expense growth was driven by increased  spending for customer service and
network  support  functions  and expenses for  development  and promotion of new
business initiatives including high-speed data and Internet service offerings.
<PAGE>

In  addition,  on January  1, 1999,  we  adopted a new  accounting  standard  on
capitalization of internal-use software. The year-to-date impact of capitalizing
software costs under the new standard was a benefit of $135 to net income.
--------------------------------- ----------------------- -----------
                                       Year-to-Date           %
                                  -----------------------
                                     1999        1998       Change
--------------------------------- ----------- ----------- -----------

Operating revenues:
   Local service ................     $5,366      $4,916         9.2
   Network access ...............      2,378       2,311         2.9
   Long distance ................        303         352      (13.9)
   Other wireline................        702         577        21.7
--------------------------------- ----------- ----------- -----------
     Total operating revenues ...     $8,749      $8,156         7.3
--------------------------------- ----------- ----------- -----------


Operating Revenues

Local service
The $450 increase in local service revenues on a year-to-date  comparative basis
is attributable to growth in access lines and strong demand for digital and data
services and convenience features.

We ended the second quarter with over 41 million total equivalent  access lines,
an increase of 14.7% since June 30, 1998.  Residential access lines rose 3.7% to
16,782,000, 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 363,000 second lines since June 30, 1998,  extending
the total to over 2.4  million  lines and  increasing  the  penetration  rate to
17.0%.  Business  access lines,  including  both switched  access lines and data
circuits,  grew 24.0%  propelled  by  expanding  demand for our digital and data
services.

1999  year-to-date  revenues from optional  convenience  features such as custom
calling features (e.g., Caller ID, Call Waiting,  Call Return) and MemoryCall(R)
service  increased  $153 or 20.5%  when  compared  to the same 1998  period.  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 $92 compared to the first six months of 1998.

Network access
Network access  revenues grew $67 for the first six months of 1999 when compared
to the same 1998 periods,  due largely to higher  demand.  Access minutes of use
rose 6.1% to 54,452  million at June 30,  1999 from  51,322  million at June 30,
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 February 1999  introduction  of 1+ dialing parity for intraLATA long
distance  calls in all  states  in our  wireline  territory  has  also  begun to
contribute to growth in minutes.

The growth rate in total minutes of use  continues to be negatively  impacted by
the trend of business customers migrating from traditional  switched circuits to
higher  capacity  dedicated  circuits which are  fixed-charge  based rather than
per-minute-of-use  based.  Revenues from these dedicated  circuit  services grew
approximately  $72  year-to-date  on a  comparative  basis as  Internet  service
providers and high-capacity users increased their use of our network. The growth
rate in switched minutes of use has also been negatively impacted by competition
from competitive local exchange carriers whose traffic  completely  bypasses our
network.

Volume-related  growth  was  largely  offset by rate  reductions  related to the
Federal  Communications  Commission's  productivity factor adjustment and access
reform that decreased revenues by $63 compared to the first six months of 1998.
<PAGE>
Long distance
The decrease  for the  year-to-date  period  compared to the same 1998 period is
primarily  attributable to a decrease in long distance  message volumes (14.2%).
The year-to-date  period also includes the impact of a regulatory ruling related
to compensation we receive from long distance  carriers for  interconnection  to
our public  payphones.  Partially  offsetting  these  decreases  were  increased
revenues from the provision of digital and data services and independent company
settlements occurring in 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
customers to choose a competing  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 increase is attributable to higher revenues in the 1999 year-to-date  period
from sales of customer premises equipment,  sales of unbundled network elements,
revenues from our Internet  access  offering and  interconnection  revenues from
wireless  carriers.  We ended  the first  six  months of 1999 with over  565,000
subscribers to our BellSouth.net (sm) service, an increase of 125.1% compared to
the same 1998 period.  The higher  revenues also  represent  increased  business
activity with other subsidiaries of our parent, BellSouth Corporation.

Operating Expenses

Operational and support expenses
Operational and support expenses  increased $171 or 4.2% for  year-to-date  1999
when compared to year-to-date 1998.  Adjusted for the impact of adopting the new
rules on software capitalization, expenses increased $409 (10.0%).

Increased  labor  costs,  primarily  in customer  service  and  network  support
functions, growth in reciprocal compensation expense, increased spending related
to Year 2000  remediation and other increased costs in the telephone  operations
associated  with  higher  business  volumes  were  the  primary  drivers.   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  6 million access lines.  We are deploying
IFITL in nearly all newly built  neighborhoods  and also expect to retrofit some
200,000 existing homes in Atlanta and Miami by the end of 1999.

Depreciation and amortization
Year-to-date  depreciation and amortization expense was relatively flat compared
to the same 1998 period,  increasing $21 or 1.3%. While gross  depreciable plant
increased  by  $2,690  or 5.5%  since  June  30,  1998,  the  overall  composite
depreciation rate was slightly lower resulting in flat depreciation expense.


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

                                     Year-to-Date           %
                                -----------------------
                                   1999        1998       Change
------------------------------- ----------- ----------- -----------

Interest Expense ..............       $268        $277       (3.2)
Other Income, net .............          1           4         N/M
Provision for Income Taxes ....        954         802        19.0

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

Provision for income taxes
The  provision for income taxes  increased  $152 on a  year-to-date  comparative
basis due  primarily to higher  operating  income during the first six months of
1999  compared to the same 1998 period.  The  effective  income tax rate for the
six-month  period  ended  June 30,  1999 was  37.4%  compared  to 37.7%  for the
six-month  period ended June 30, 1998 and is in line with our expected  rate for
1999.


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

Regulatory Developments

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

South Carolina  Regulatory  Matters.  See Note F to the  consolidated  financial
statements.

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  Remaining  implementation  and  testing  could  reveal the need for
     additional unplanned remedial efforts and

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

          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.

During 1997, we 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.

As of July 1999, we have  completed  the majority of our Year 2000  conversions,
tests and  implementations.  We have completed all the work on systems that make
up our key business  processes,  and they have been tested in our labs in a Year
2000  environment.  All  of our  landline  central  office  switches  have  been
remediated, tested and implemented into our production environment. We have also
completed 100% of the upgrades and  replacements to the equipment  necessary for
E9-1-1 services within our nine-state wireline region.

Our Year 2000 program is divided into six phases:  planning;  inventory;  impact
analysis;  conversion;  testing;  and implementation.  Our progress within these
phases is based on the number of inventoried  items that have been addressed and
covers those business  processes that we consider  "mission  critical."  Mission
critical applications include those that:
<PAGE>
o        directly affect delivery of primary services to our customers;

o        directly affect our revenue recognition and collection; and

o        would create noncompliance with any statutes or laws.

The three main areas of focus for our Year 2000 program are 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.  We have  completed  the  planning,  inventory  and  impact
analysis  phases  and our  completion  status  for the  remaining  phases  is as
follows:  Network  components - 99%;  Information  technology systems - 95%; and
Building and environmental systems - 99%.

We will continue to monitor and track the conversion, testing and implementation
for all remaining mission-critical and non-mission-critical  applications.  Many
of the  applications  scheduled to be completed after July 1999 are of low or no
impact to our customers and/or internal  business  operations and were therefore
specifically targeted for remediation after the more critical applications.

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. At June 30, 1999, we have spent  approximately  $148 in external costs
towards  Year 2000  compliance.  We  estimate  the total  external  costs of our
compliance efforts will be approximately $225 over the life of the project.

Expected  completion.  We currently  anticipate that the remaining  applications
will be Year 2000  compliant  between  September and December  1999.  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 (FASB) 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.  During June 1999,  the FASB  postponed the required  adoption date
until  January 1, 2001. We plan to adopt SFAS No. 133 on January 1, 2001 and are
currently  assessing  the  impact  that  adoption  will have on our  results  of
operations and financial position.
<PAGE>
-----------------------------------------------------------------------
Cautionary Language Concerning Forward-Looking Statements
-----------------------------------------------------------------------

In addition to  historical  information,  management's  discussion  and analysis
contains  forward-looking  statements regarding events and financial trends that
may affect our future operating results and financial position. 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 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  BellSouth  Corporation's  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.

This  list  of  cautionary  statements  is  not  exhaustive.   These  and  other
developments  could  cause our actual  results to differ  materially  from those
forecast or implied in the 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>


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PART II -- OTHER INFORMATION
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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 hereby agree
          to furnish a copy of any such instrument to the SEC upon request.

     12   Computation of Ratio of Earnings to Fixed Charges.

     27   Financial Data Schedule as of June 30, 1999.



(b) Reports on Form 8-K:

      None.
<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 TELECOMMUNICATIONS, INC.

                              By /s/ Isaiah Harris
                                     ISAIAH HARRIS
                              Vice President, Chief Financial Officer
                              and Comptroller
                              (Principal Financial and Accounting Officer)


August 6, 1999
<PAGE>
                               EXHIBIT INDEX

     Exhibit
     Number

         12       Computation of Ratio of Earnings to Fixed Charges.

         27       Financial Data Schedule as of June 30, 1999.