<PAGE>


                       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 September 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.,
     Atlanta, Georgia                                     30375
(Address of principal executive offices)                (Zip Code)


                   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 Nine Months
                                           Ended September 30,             Ended September 30,
                                         1999                1998         1999                1998
<S>                                     <C>                  <C>          <C>                 <C>
Operating Revenues:
   Local service .....................  $2,747              $2,542       $ 8,113            $ 7,458
   Network access ....................   1,200               1,147         3,578              3,458
   Long distance .....................     158                 180           461                532
   Other .............................     376                 326         1,078                903
     Total Operating Revenues.........   4,481               4,195        13,230             12,351

Operating Expenses:
   Operational and support expenses ..   2,372               2,266         7,021              6,358
   Depreciation and amortization .....     868                 847         2,551              2,509
     Total Operating Expenses ........   3,240               3,113         9,572              8,867

Operating Income .....................   1,241               1,082         3,658              3,484

Interest Expense .....................     142                 132           410                409
Other Income (Expense), net ..........      17                 (2)            18                  2

Income Before Income Taxes ...........   1,116                 948         3,266              3,077
Provision for Income Taxes ...........     420                 322         1,225              1,124

     Net Income ......................    $696                $626       $ 2,041            $ 1,953

Retained Earnings:
  At beginning of period ............. $ 1,477             $ 1,252       $ 1,354            $ 1,140
  Add:  Net Income ...................     696                 626         2,041              1,953
  Deduct:  Dividends Declared ........   (626)                (567)       (1,848)            (1,782)
  At end of period ................... $ 1,547             $ 1,311       $ 1,547            $ 1,311

</TABLE>


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


                       BELLSOUTH TELECOMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                  (In Millions)

<TABLE>
<CAPTION>
                                                September 30,       December 31,
                                                    1999                1998
                                                 (Unaudited)
<S>                                             <C>                  <C>
ASSETS
Current Assets:
 Cash and cash equivalents ....................  $  135               $  337
 Accounts receivable, net of allowance
  for uncollectibles of $80 and $75 ...........   3,075                2,952
 Material and supplies ........................     242                  248
 Other current assets .........................     173                  177
   Total Current Assets .......................   3,625                3,714

Investments and Advances ......................     317                  310

Property, Plant and Equipment .................  52,208               50,248
Less: accumulated depreciation ................  32,613               31,240
   Property, Plant and Equipment, net .........  19,595               19,008

Deferred Charges and Other Assets .............   1,638                  884

Total Assets ..................................$ 25,175              $23,916

LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
 Debt maturing within one year ................ $ 2,541              $ 1,556
 Accounts payable .............................   1,516                1,586
 Other current liabilities ....................   2,573                2,090
   Total Current Liabilities ..................   6,630                5,232

Long-Term Debt ................................   6,145                6,523

Noncurrent Liabilities:
 Deferred income taxes ........................   1,468                1,274
 Unamortized investment tax credits ...........     137                  167
 Other noncurrent liabilities  ................   1,858                1,945
   Total Noncurrent Liabilities ...............   3,463                3,386

Shareholder's Equity:
 Common stock, one share, no par value ........   7,390                7,421
 Retained earnings ............................   1,547                1,354
   Total Shareholder's Equity .................   8,937                8,775

Total Liabilities and Shareholder's Equity ....$ 25,175              $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 Nine Months
                                                                           Ended September 30,
                                                                         1999               1998
<S>                                                                   <C>                 <C>
Cash Flows from Operating Activities:
  Net income ......................................................... $2,041              $1,953
  Adjustments to net income:
      Depreciation and amortization ..................................  2,551               2,509
      Provision for uncollectibles ...................................    110                 101
      Deferred income taxes and unamortized investment tax credits ...    161                  39
  Net change in:
      Accounts receivable and other current assets ...................  (260)               (151)
      Accounts payable and other current liabilities .................    502                 416
      Deferred charges and other assets ..............................  (429)               (228)
      Other liabilities and deferred credits .........................  (167)                (34)
  Other reconciling items, net .......................................     83                 77
      Net cash provided by operating activities ......................  4,592               4,682

 Cash Flows from Investing Activities:
  Capital expenditures ...............................................(3,468)             (2,593)
  Other investing activities, net ....................................    39                  26
      Net cash used for investing activities .........................(3,429)             (2,567)

 Cash Flows from Financing Activities:
  Net borrowings (repayments) of short-term debt .....................    521               (646)
  Proceeds from long-term debt........................................      -               1,000
  Repayments of long-term debt........................................    (8)               (560)
  Advances from parent and affiliates ................................    539                 462
  Repayments of advances from parent and affiliates ..................  (517)               (465)
  Dividends paid to parent ...........................................(1,921)             (1,825)
  Other financing activities, net.....................................     21                 25
      Net cash used for financing activities .........................(1,365)             (2,009)

 Net (Decrease) Increase in Cash and Cash Equivalents ................  (202)                 106
 Cash and Cash Equivalents at Beginning of Period ....................   337                   49
 Cash and Cash Equivalents at End of Period ..........................$  135                $ 155

</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 reports on Form 10-Q.

Certain amounts within the prior year's  information  have been  reclassified 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  caused 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 $319
and net income of $199.  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 Nine Months
                                                    Ended September 30,
                                                    1999            1998
Cash Paid For:

   Income taxes .................................. $ 695          $ 1,002
   Interest ...................................... $ 353            $ 357




<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.

In  February  1999,  the 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,  however,  that  it  would  not  interfere  with  prior  state
commissions'  decisions  regarding this matter.  The courts and state regulatory
commissions in our operating territory that have considered the matter, however,
have  generally  ruled  that  such  calls  invoke  the  reciprocal  compensation
obligation.  We  continue  to believe  that we have a good  legal  basis for our
position.  At September 30, 1999, our exposure  related to these disputed claims
was approximately $210, including accrued interest.

Other reciprocal compensation issues

In a related matter, at least one CLEC is claiming  terminating  compensation of
approximately  $140 for service  arrangements  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 declare  that we do not owe
reciprocal  compensation for these arrangements.  The CLEC has filed a complaint
with the state regulatory  commission  asking it to order us to pay the disputed
amounts.  Hearings  on this  matter  were held in August  1999 and a decision is
pending.  We  believe  that we have a good  legal  basis for our  position  and,
accordingly,  no provision has been  recorded for this claim in these  financial
statements.

Note F - South Carolina Regulatory Matters

Beginning in 1996,  we operated  under a price  regulation  plan approved by the
South  Carolina  Public Service  Commission  under existing state laws. In April
1999,  however,   the  South  Carolina  Supreme  Court  invalidated  this  price
regulation  plan.  In July 1999,  we elected to be  regulated  under a new state
statute,  adopted  subsequent to the Commission'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 Commission.  The election
became effective during August 1999.

The South Carolina Consumer Advocate petitioned the Commission seeking review of
the level of our earnings during the 1996-1998 period when we operated under the
subsequently  invalidated  price  regulation  plan. The  Commission  granted our
motion to dismiss the petition on November 4, 1999.





<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 reports 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.  When  compared to the same 1998 periods,  these charges  increased our
reported year-to-date 1999 operational and support expenses by $520, and reduced
our reported net income by $317. 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 third quarter and  year-to-date  1999 and
1998,  adjusted  to exclude the effect of the charges  discussed  above,  are as
follows:

<TABLE>
<CAPTION>

                                          Third Quarter             %           Year-to-Date              %
                                      -----------------------              -----------------------
                                         1999        1998        Change       1999         1998        Change
                                      ----------- ----------- ------------ ----------- ----------- ------------
<S>                                       <C>         <C>          <C>         <C>         <C>           <C>
Revenues                                  $4,481     $ 4,195       6.8       $13,230   $ 12,351          7.1
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
Expenses                                  $3,043     $ 3,050     (0.2)        $8,989    $ 8,804          2.1
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
Operating income                          $1,438     $ 1,145      25.6        $4,241    $ 3,547         19.6
------------------------------------- ----------- ----------- ------------
Net income                                 $ 817       $ 667      22.5        $2,399    $ 1,994         20.3
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
EBITDA    (a)                             $2,306     $ 1,992      15.8        $6,792     $6,056         12.2
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
EBITDA margin                              51.5%       47.5%   +400bps         51.3%      49.0%      +230bps
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
Access line counts (000's):
------------------------------------- ----------- ----------- ------------
  Switched access lines                   24,440      23,869       2.4
------------------------------------- ----------- ----------- ------------
  Access line equivalents(b)              18,349      13,470      36.2
------------------------------------- ----------- ----------- ------------
    Total equivalent access lines         42,789      37,339      14.6
------------------------------------- ----------- ----------- ------------
Access minutes of use (millions)          27,858      26,438       5.4        82,310     77,760       5.9
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
Digital and data services revenues          $667        $519      28.5        $1,919     $1,447      32.6
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
Convenience feature revenues                $481        $428      12.4        $1,381     $1,175      17.5
------------------------------------- ----------- ----------- ------------ ----------- ----------- ------------
</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 nine 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 $199 to net income.


Operating Revenues

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

Operating revenues:
   Local service ..................      $8,113       $7,458        8.8
   Network access .................       3,578        3,458        3.5
   Long distance ..................         461          532     (13.3)
   Other wireline..................       1,078          903       19.4
----------------------------------- ------------ ------------ ----------
     Total operating revenues .....     $13,230      $12,351        7.1
----------------------------------- ------------ ------------ ----------

Local service
The $655 increase in local service revenues on a year-to-date  comparative basis
is attributable to growth in switched access lines and strong demand for digital
and data services and convenience features.

We ended the third quarter with over 42 million total  equivalent  access lines,
an increase of 14.6% since  September  30, 1998.  Residential  access lines rose
3.4% to 16,889,000,  driven by economic growth in our nine-state  region as well
as demand for  secondary  residence  lines for home  office  purposes,  Internet
access and children's  phones. We added 329,000 secondary  residence lines since
September  30,  1998,  extending  the  total to  almost  2.5  million  lines and
increasing the penetration rate to 17.3%. Business access lines,  including both
switched  access  lines and data  circuits,  grew 23.6%  propelled  by expanding
demand for our digital and data services.  Switched  business access line growth
was flat reflecting  continued  migration of new and existing business customers
to high-capacity data lines.

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  $206  (17.5%)  when  compared  to the same 1998  period.  We
continued  to drive growth of  convenience  feature  usage  through our Complete
Choice(R) Package, a one-price bundled offering of over 20 features.

Increased  penetration of extended local area calling plans also increased local
service  revenues  by  approximately  $139  compared to the first nine months of
1998. Also contributing to the increase in revenues for the year-to-date  period
were net rate  impacts of $115,  which were  primarily  attributable  to sharing
accruals recorded in the prior periods. The growth in local service revenues for
the 1999 periods was  partially  offset by declines in revenues  from our public
payphone subsidiary.

Network access
Network  access  revenues  grew  $120 for the  first  nine  months  of 1999 when
compared to the same 1998 period,  due largely to higher demand.  Access minutes
of use rose 5.9% to 82,310  million at September 30, 1999 from 77,760 million at
September  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 is
also contributing 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  $107  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 CLECs whose traffic completely bypasses our network.
<PAGE>
Volume-related  growth was largely  offset by net rate  impacts  that  decreased
revenues  by $103  compared to the first nine  months of 1998.  Rate  reductions
related to the FCC's  productivity  factor  adjustment  and access  reforms were
partially offset by recoveries of local number portability costs.

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 (16.0%).
The decrease in 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,  resale  of paging  products  and
services, sales of unbundled network elements, revenues from our Internet access
offering and interconnection  revenues from wireless carriers.  At September 30,
1999 we had 626,000  subscribers to our BellSouth.net (sm) service,  an increase
of 107% 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 $143 (2.3%) 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 $506 (8.0%).

For the  year-to-date  period,  the  increase  was driven by higher labor costs,
primarily in customer service and network support functions,  increased spending
related to Year 2000 remediation,  growth in reciprocal compensation expense and
other  increased  costs  in the  telephone  operations  associated  with  higher
business volumes.

Also  contributing  to the increase for the  year-to-date  period 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  increased $42 (1.7%).  The
increase is primarily  attributable to  amortization  of capitalized  internally
developed  software.  While gross  depreciable  plant increased by $2,537 (5.1%)
since September 30, 1998, the overall  composite  depreciation rate was slightly
lower resulting in flat depreciation expense.
<PAGE>
-------------------------------------------------------------------------------
Other Nonoperating Items
-------------------------------------------------------------------------------


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

Interest Expense ............        $410        $409         N/M
Other Income, net ...........          18           2         N/M
Provision for Income Taxes ..       1,450       1,146        26.5

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

Provision for income taxes
The  provision for income taxes  increased  $304 on a  year-to-date  comparative
basis due primarily to higher  operating  income during the first nine months of
1999  compared to the same 1998 period.  The  effective  income tax rate for the
nine-month  period ended  September 30, 1999 was 37.5% compared to 36.5% for the
nine-month period ended September 30, 1998 and is in line with our expected rate
for 1999.



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

Regulatory Developments

FCC order on Unbundled Network Elements
In 1996, the FCC issued an order adopting rules  governing  interconnection  and
related matters. In 1999 the U.S. Supreme Court remanded aspects of the rules to
the FCC for further consideration of the requirements in the  Telecommunications
Act of 1996; those requirements  specify that access to certain network elements
can be required only when  necessary or when the failure to provide access would
impair the ability of the requesting carrier to provide services. On remand from
the  Supreme  Court,  the FCC  issued an order on  November  5, 1999  adopting a
revised list of network elements that incumbent local exchange  carriers (ILECs)
such as ourselves must make available to competitors.

The FCC's list, together with its regulations  prohibiting ILECs from separating
currently  combined  elements,  means  that ILECs  will be  required  to provide
certain  combinations  of network  elements that  competitors may substitute for
certain  higher  priced ILEC  services.  This  substitution  may lead to further
increases in competition  for certain local exchange  access  services.  The FCC
determined that it would not apply these new rules to allow the  substitution of
certain network elements for special access services, and announced that it will
conduct  a further  inquiry  into the use of  network  element  combinations  to
provide special access services.

The FCC's revised list does not, however, require ILECs to make network elements
used to provide advanced data services available to competitors,  except in very
limited circumstances. This outcome removes a disincentive to ILEC investment in
these rapidly expanding services.

FCC Announcement on Universal Service
On October 21, 1999 the FCC  announced a new  universal  service  mechanism  for
non-rural  carriers  serving  high-cost  areas to ensure that customers in those
areas  receive  telephone  service  at  affordable  rates.  We expect to receive
support for service to residents in Alabama, Kentucky and Mississippi.  Although
the FCC has not yet issued the formal  order and thus the details are not known,
we do not  believe  the net  financial  effect  of the new  arrangement  will be
material.

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

South Carolina  Regulatory  Matters.  See Note F to the  consolidated  financial
statements.
<PAGE>
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:

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

     *    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.

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:

     *    directly affect delivery of primary services to our customers;

     *    directly affect our revenue recognition and collection; and

     *    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.

As of September 1999, we have  substantially  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.  The
applications  scheduled to be completed  after  September  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.
<PAGE>
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 third  parties.
During third quarter 1999, contingency plans were completed and tested.

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 September 30, 1999,  we have spent  approximately  $175 in external
costs towards Year 2000 compliance.  We estimate the total external costs of our
compliance efforts will be approximately $210 over the life of the project.

Expected  completion.  We currently  anticipate that the remaining  applications
will be Year 2000  compliant in fourth  quarter 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.


-------------------------------------------------------------------------------
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:

     *    a change in economic  conditions  in markets  where we operate or have
          material investments which would affect demand for our services;

     *    the  intensity of  competitive  activity and its  resulting  impact on
          pricing strategies and new product offerings;

     *    further delay in BellSouth Corporation's entry into the interLATA long
          distance market;

     *    higher  than  anticipated   start-up  costs  or  significant  up-front
          investments associated with new business initiatives;

     *    unanticipated  higher  capital  spending  from the  deployment  of new
          technologies;

     *    unsatisfactory  results in regulatory actions including access reform,
          universal  service,  terms of  interconnection  and unbundled  network
          elements and resale rates; and

     *    failure to satisfactorily identify and complete Year 2000 software and
          hardware revisions by us and third parties.
<PAGE>
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>



-------------------------------------------------------------------------------
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.

     12           Computation of Ratio of Earnings to Fixed Charges.

     27           Financial Data Schedule as of September 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)


November 9, 1999


<PAGE>


                                  EXHIBIT INDEX

     Exhibit
     Number

         12       Computation of Ratio of Earnings to Fixed Charges.

         27       Financial Data Schedule as of September 30, 1999.