6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

July 22, 2004

Commission File Number: 001-10579

COMPANIA DE TELECOMUNICACIONES DE CHILE S.A.
(Exact name of registrant as specified in its charter)

TELECOMMUNICATIONS COMPANY OF CHILE

(Translation of registrant's name into English)

Avenida Providencia No. 111, Piso 22

Providencia, Santiago, Chile

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F   X   Form 40-F ___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes        No X  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes        No X  

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes        No  X   

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A 

Compañía de Telecomunicaciones de Chile, S.A.

TABLE OF CONTENTS

Item

1. Press release dated July 21, 2004 announcing 2^nd Quarter 2004 results.

Exhibit 99.1 Physical Statistics for 2Q 2004

Exhibit 99.2 Statements of Income for 2Q 2004

Exhibit 99.3 Balance Sheets for 2Q 2004

Exhibit 99.4 Cash Flows for 2Q 2004

Item 1.

News Release

FOR IMMEDIATE RELEASE

COMPAÑIA DE TELECOMUNICACIONES DE CHILE S.A.

ANNOUNCES RESULTS FOR THE SECOND QUARTER 2004 (2Q04)

Highlights:

• The Company recorded a profitof Ch$6,320 million (US$9.9 million) in 2Q04, compared to a profit of Ch$917 million (US$1.4 million) in 2Q03
• EBITDA amounted to Ch$85,814 million (US$134.9 million) in 2Q04, compared to Ch$93,773 million (US$147.4 million) in 2Q03
• EBITDA margin reached 42.6% in 2Q04, compared to 46.8% in 2Q03

(Santiago, Chile July 21, 2004) Compañía de Telecomunicaciones de Chile S.A. (NYSE: CTC) ("Telefónica CTC Chile" or the "Company") today announced its financial results, submitted to an internal financial review by independent auditors, stated in Chilean GAAP (in constant Chilean pesos as of June 30, 2004) for the second quarter of 2004. U.S. dollar equivalent information is based on the Observed Exchange Rate (as defined by the Chilean Central Bank) for June 30, 2004, which was Ch$636.30 = US$1.00. This information will be made publicly available through the Chilean Superintendencia de Valores y Seguros ("SVS") and the Securities and Exchange Commission of the United States of America (www.sec.gov), as well as at the Company's website, www.telefonicactcchile.cl.

CONSOLIDATED RESULTS FOR 2Q04ONSOLIDATED RESULTS FOR 2Q04

(Comparisons refer to 2Q03)

REVENUES

Telefónica CTC Chile's revenues increasedby 0.5% in 2Q04 as compared to 2Q03, amounting to Ch$201,665 million (US$316.9 million). Regarding the evolution in the different business areas, fixed telephony and long distance revenues negatively impacted the consolidated revenues during 2Q04, with decreases of 5.7% and 9.4%, respectively, compared to 2Q03. These declines were partially offset by increases of 11.1% in mobile services, 1.3% in corporate communications and 9.3% in other businesses, which includes revenues from public telephones, interior installations and from the subsidiary Telemergencia (home security services).

OPERATING COSTS AND EXPENSES

Operating costs and expenses increased by 4.4% in 2Q04, to Ch$180,758 million (US$284.1 million), as compared to Ch$173,145 million (US$272.1 million) in 2Q03.

Salary expenses increased1.5% in 2Q04 when compared to 2Q03, to Ch$14,282 million (US$22.4 million), mainly due to higher salaries in the mobile business.

Other operating costs and expenses increased by 13.9% in 2Q04 as compared to 2Q03, to Ch$57,263 million (US$90.0 million). This increaseis attributable to growth in the mobile business and the associated increase in costs for equipment sales.

Administrative and selling expenses increased by 7.9% in 2Q04 as compared to 2Q03, to Ch$46,031 million (US$72.3 million), due to higher marketing costs associated with the growth which in turn have generated an increase in sales costs and advertising.

EBITDA

As a result of the above, EBITDA in 2Q04 fell by 8.5% to Ch$85,814 million (US$134.9 million), compared to Ch$93,773 million (US$147.4 million) recorded in 2Q03.

EBITDA margin in 2Q04 was 42.6%, compared to 46.8% recorded in 2Q03.

DEPRECIATION

As of 4Q03, depreciation of assets related to the sales and administration will be accounted for under "Administrative and selling expenses". Exhibits were adjusted accordingly in the four quarters of 2003.

Total depreciation in 2Q04 decreased by 2.2% to Ch$64,907 million (US$102.0 million), as compared to 2Q03.

OPERATING INCOME

OPERATING INCOME decreased by 23.8% to Ch$20,907 million (US$32.8 million) in 2Q04 when compared to Ch$27,421 million (US$43.1 million) recorded in 2Q03. The operating margin amounted to 10.4% in 2Q04 as compared to 13.7% in 2Q03.

NON-OPERATING INCOME

NON-OPERATING INCOME (LOSS): Telefónica CTC Chile recorded a lower non-operating loss, meaning a 68.6% decrease to Ch$5,959 million (US$9.4 million) in 2Q04, as compared to a non-operating loss of Ch$18,991 million (US$29.8 million) in 2Q03. Thisimprovementis basically the result of:

1. A decrease of 34.4% in financial interest expenses in 2Q04 with respect to 2Q03 as a result of a 2.4% reduction in average interest-bearing debt (US$1,421 million in 2T04) and a lower exchange rate for the Chilean peso vs. US dollar;
2. A monetary correction gain of Ch$4,154 million (US$6.5 million) in 2Q04, compared to a monetary correction loss of Ch$2,435 million (US$3.8 million) registered in 2Q03, mainly explained by the positive CPI in 2Q04 and the gain for exchange rate gain resulting from the hedging of financial expenses;
3. A 42.2% increase in other non-operating income due to the profit of Ch$6,397 million (US$10.1 million) obtained from the sale of Publiguías, and
4. A 24.9% decrease in the amortization of goodwill as a result of the accounting of the amortization of Sonda's goodwill up to July 2003.

The above was partially offset by:(i) a 24.6% decrease in interest income due to lower local interest rates and a lower cash position resulting from the Company's reduction in interest-bearing debt, and (ii) a 74.4% increase in other non-operating expenses due to costs from the business restructuring incurred in 2Q04.

INCOME TAXES

INCOME TAXES: In 2Q04, Telefónica CTC Chile recorded a total income tax charge in the amount of Ch$8,658 million (US$13.6 million) as compared to the Ch$7,516 million (US$11.8 million) tax charge registered in 2Q03. This total income tax is composed of Ch$5,333 million (US$8.4 million) in current income tax and a Ch$3,324 million (US$5.2 million) charge for deferred taxes for the period as well as amortization of deferred taxes for previous periods.

NET RESULT

The Company recorded a net income of Ch$6,320 million (US$9.9 million) in 2Q04 as compared to a net income of Ch$917 million (US$1.4 million) recorded in 2Q03.

Net income per ADR in 2Q04 amounted to US$0.042, compared to a net income per ADR of US$0.005 recorded in 2Q03. Furthermore, net income per share in 2Q04 equaled Ch$6.6 as compared to the net income of Ch$1.0 in 2Q03.

CAPEX

Capital expenditures for Telefónica CTC Chile and its consolidated subsidiaries amounted to US$45 million in 2Q04 compared to US$61 million in 2Q03, given the higher capital expenditures devoted to deployment of the GSM network in 2003.

CASH FLOW

The consolidated free cash flow from operations in 2Q04 reached Ch$42,051 million (US$66.1 million) as compared to Ch$37,810 million (US$59.4 million) in 2Q03.

REVENUES BY BUSINESS UNIT

REVENUES BY BUSINESS UNIT

FIXED TELEPHONY

Higher contribution to consolidated revenues coming from access charges and interconnections due to the impact of the new Tariff Decree

Revenues from fixed telephony services include Primary Service, Access Charges and Interconnections and Directory Advertising. Fixed telephony revenues, which represented 43.6% of total operating revenues in 2Q04, decreased by 5.7% to Ch$88,010 million (US$138.3 million) as compared to 2Q03. Since May 2004, the Company has made the appropriate provisions regarding new tariffs imposed under the Tariff Decree No. 169. These tariffs, once they receive approval from the Chilean Controller, will become effective retroactively to May 6, 2004.

Primary service revenues, which include the fixed monthly charge, variable charge, connections and other installations, value-added services and equipment marketing, plus others (ADSL, IP flat fee, rural telephony, among others), decreased by 8.4% to Ch$80,263 million (US$126.1 million) in 2Q04 as compared to 2Q03. This decrease is mainly attributable to a 4.2% decrease in the fixed monthly charge and a 19.9% decrease in the variable charge due to: (i) a 7.2% decrease in average lines in service in 2Q04 vs. 2Q03, as result of higher disconnections in 2003 from tighter control of non-payment; (ii) the provisioning for the effects from applying the new Tariff Decree, and (iii) a 10.2% decrease in total local traffic for 2Q04 compared to 2Q03. However, the above was partially offset by a 75.0% increase in other fixed telephony revenues primarily due to the growth in new services over fixed line, such as ADSL (a 95.4% growth in lines in service in 2Q04 vs. 2Q03) and flat fee plans.

Access charges and interconnections include revenues from access charges generated by LD carriers, as well as those paid by other telecommunications operators that use Telefónica CTC Chile's network. They also include other interconnection services apart from access charges, such as interconnection of networks and information services to carriers, among others. These revenues increased by 38.7% in 2Q04 to Ch$7,428 million (US$11.7 million) as compared to 2Q03. This increase was mainly due to 80.7% increase in other interconnection services due to the effect of the new Tariff Decree No. 169 since May 2004 and the regularization of revenues from other fixed telephony operators.

Revenues from directory advertising, generated by the Company's contract with Publiguías, decreased by 11.1% in 2Q04 to Ch$319 million (US$0.5 million) as compared to 2Q03.

LONG DISTANCE

DLD and ILD market shares increase to 44.2% and 32.0%, respectively

Long distance revenues include revenues from domestic and international long distance traffic carried by 188 Telefónica Mundo and Globus 120, as well as revenues from the rental of the long distance network to other telecom operators. Total long distance revenues, which accounted for 7.3% of consolidated operating revenues in 2Q04, decreased by 9.4% as compared to 2Q03, to Ch$14,760 million (US$23.2 million). This decrease in revenues was mainly due to: (i) lower revenues from domestic long distance services ("DLD") due to the 13.4% decrease in the average price for this service, although DLD traffic carried by 188 Telefónica Mundo and Globus 120 grew 7.4% in 2Q04 as compared to 2Q03, and (ii) lower revenues from international long distance services ("ILD") due to a reduction of 11.0% in the outgoing ILD average price in 2Q04 vs. 2Q03, although outgoing ILD average traffic increased 7.0% in 2Q04 compared to 2Q03, and (iii) lower revenues from the rental of the long distance network to other telecom operators due to lower prices and lower industry traffic in general.

MOBILE COMMUNICATIONS

A 32.1% increase in the average subscriber base, where higher traffic offset the tariff decrease

Mobile communications revenues include revenues from outgoing cellular traffic and interconnection revenues from Calling Party Pays (incoming traffic to the mobile network), as well as revenues from mobile equipment sales. Total revenues from mobile communications, which accounted for 31.5% of total operating revenues in 2Q04, amounted to Ch$63,577 million (US$99.9 million), representing an increase of 11.1% when compared to 2Q03. This increase is mainly the result of a 32.1% increase in average cellular subscribers which fuelled an increase in sales of prepaid equipments in relation to contract equipments. This was partially offset by a decrease in the average monthly revenue per user ("ARPU"), due to the application of new CPP tariffs as of February 12, 2004 and an increase in the proportion of prepaid customers in Telefónica Móvil's subscriber base. Prepaid customers represented 83.8% of total cellular subscribers as of June 30, 2 004, as compared to 77.2% on the same date of the previous year. As of June 30, 2004, Telefónica Móvil had 2,738,580 customers, of which, 923,071 are GSM customers.

CORPORATE CUSTOMER COMMUNICATIONS

Continued increase in revenues from connectivity services through the IP network

Corporate customer communications include revenues from (i) telecommunications equipment sales, which refers to voice equipment (fax, PABX, etc.); (ii) complementary telephone services, such as 600, 700, 800 numbers and digital communications; (iii) data services, including ATM, Frame Relay, data equipment and services related to the IP network, and (iv) dedicated links and others, including videoconference, Datared, E1 Links and VSAT, "ISP Empresas" revenues, services such as housing and hosting and consulting services to corporate customers.

Revenues from corporate customer communications increased by 1.3% to Ch$20,013million (US$31.5 million) in 2Q04 as compared to 2Q03. The 9.9% contribution to consolidated operating revenues, remained stable vs. 2Q03. The increase in revenues was mainly due to: (i) a 15.0% increase in data services revenues in 2Q04 as compared to 2Q03 from increased connectivity services through the IP network, and (ii) a 13.6% increase in complementary services to corporate customers. This was partially offset by: (i) an 18.9% reduction in revenues from telecommunications equipment sales due to higher competition and lower sales of PABX equipment, and (ii) a 8.2% decrease in dedicated links and others, due to a 2.6% decrease in revenues from Datared services in favor of more advanced technologies, such as Frame Relay and ATM. In fact, ATM links increased by 2.2% while data links through the IP network grew by 57.5%. Moreov er, the average number of customers for switched IP network decreased by 21.9% in 2Q04 as compared to 2Q03.

OTHER BUSINESSES

These revenues include public telephones, as well as revenues from interior installations and equipment marketing by the subsidiary CTC Equipos, among others. These revenues which represented 7.6% of total operating revenues in 2Q04, grew 9.3% to Ch$15,305 million (US$24.1 million) in 2Q04 vs. 2Q03.

Public telephone revenues increased by 7.7% in 2Q04 to Ch$2,730 million (US$4.3 million) as compared to 2Q03.

Interior installations and equipment marketing revenues increased by 4.2% in 2Q04 to Ch$7,779 million (US$12.2 million) compared to 2Q03.

Other businesses revenues, that include revenues from other subsidiaries such as Telemergencia and t-gestiona, among others, reached Ch$4,796 million (US$7.5 million) in 2Q04, with a 20.1% increase compared to 2Q03, mainly due to security services, connection services to Internet and from Telepeajes.

BUSINESS UNIT PERFORMANCE FOR 2Q04

BUBUSDBUSINESS UNIT PERFORMANCE FOR 2Q04

Contribution to

EBITDA EBITDA Margin Net Result

(Ch$ mn) (Ch$mn)

Consolidated 85,814 42.6% 6,320

Individual by Business Unit

Fixed telephony 47,707 45.7% 1,457

Long distance 8,572 40.5% 4,476

Mobile 14,484 22.1% -5,051

Corp. Communications (incl. Data) 8,094 33.9% 4,090

COMPANY NEWS

SALE OF STAKE IN PUBLIGUIAS

On April 26, 2004, Telefónica CTC Chile sold its 9% stake in Sociedad Impresora y Comercial Publiguías to Telefónica Publicidad e Información S.A. (TPI). The sale price of US$14.8 million (equivalent to Ch$9,013 million) resulted in a net profit of Ch$4,940 million during the quarter.

SUBTEL ISSUES NEW TARIFF DECREE No. 169 WHICH REGULATES FIXED TELEPHONY TARIFFS FOR TELEFONICA CTC CHILE FOR THE PERIOD 2004-2009

On May 4, 2004, the Company was informed of the Subtel's issuance of Tariff Decree No. 169 in relation to the maximum tariffs for regulated fixed telephony services applicable to the Company's clients.

Since appeals were filed by Telefónica CTC Chile, among other, the Tariff Decree is not yet in effect. Once it is published in the Official Gazette, tariffs will be applied to clients retroactively to May 6, 2004.

The comparison of the new tariffs with respect to the tariffs existing prior to May 2004 (Tariff Decree No. 187), is the following:

In Ch$ of December 2002 (excluding VAT)	Average Tariffs* T.D. 187	Average Tariffs* T.D. 169	Var. %
Fixed charge	6,348	6,808	+7.2%
LMS	13.61	10.94	-19.7%
Local Tranche mobile and rural	6.03	8.82	+46.4%
Local Tranche Complem. Serv. (Internet) /10X	4.17	5.27	+26.3%
Prepaid	-	148.8	-
Access charge	3.16	4.50	+42.3%

* Based on traffics for the year 2003

In addition to the new tariffs, to which a prepaid tariff was incorporated, 7 tariff areas were defined along with 3 time slots.

The Company estimates that if the new local telephone tariffs defined by Tariff Decree No. 169 were applied and considering the resulting redistribution of traffic toward lower tariff levels, regulated local telephony revenues would decrease approximately 3% over a twelve month period.

ISSUANCE OF COMERCIAL PAPER AGAINST THE LINE APPROVED IN JANUARY 2003

On May 12, 2004, the Company issued Commercial Paper for Ch$35,000 million. The issuance was drawn against the line approved on January 27, 2003, and is made up of two series, series C, with maturity in 328 days, and series D, with maturity in 358 days. The average monthly nominal rate of the issuance was 0.227% (TAB 360 days + 0.085%).

Additionally, on May 12, 2004, the Company also took out its second Commercial Paper Line for an amount of Ch $35,000 million.

CHANGES TO THE COMPANY'S ORGANIZATIONAL STRUCTURE

During 2Q04, the Company's Board of Directors defined a new structure for the business designed to ensure a customer focus and improve client service as a way to strengthen the Company's business units. This restructuring resulted in a reduction of approximately 49 Company executives.

This new structure segments clients into the following areas:

(i) Households

(ii) Small and Medium Businesses

(iii) Corporate Communications

(iv) Wholesalers

TELEFONICA CTC CHILE SHAREHOLDERS APROVED THE SALE OF TELEFONICA MOVIL DE CHILE S.A.

At the Extraordinary Shareholders' Meeting held on July 15, 2004, shareholders approved the sale of Telefónica Móvil de Chile S.A. to Telefónica Móviles S.A. (TEM) with 69.1% of votes in favor of the transaction.

After being examined and approved by the Company's Directors' Committee, the Board of Directors approved to recommended to shareholders the approval of the offer made by TEM (Telefonica S.A. holds a 92.44% controlling interest in TEM) to acquire 100% of the Company's subsidiary, Telefónica Móvil de Chile S.A.

The sale price of US$1,250 million includes US$1,007 million for 100% of the shares, with the buyer bearing taxes generated by the transaction for an amount of up to US$51 million, plus all amounts owed by Telefónica Móvil de Chile S.A. to Telefónica CTC Chile. As of March 31, 2004, this inter-company debt totaled US$243 million. The sale price will be adjusted to reflect the increase in said debt at the closing date of the transaction. The closing of the transaction will require the acceptance by the buyer of the matters approved at the Meeting.

Additionally, shareholders approved the payment of a gross dividend of US$0.626856 per share to be charged against retained earnings. Similarly, the Board of Directors approved the distribution of an interim dividend of US$0.208952 per share, to be charged againstnet income for the year 2004. The total amount of approximately US$800 million for the aforementioned dividends will be paid in Chilean pesos on August 31, 2004.

Finally, shareholders also approved the modification of the Company's Investment and Financing Strategy to eliminate any reference to the assets of Telefónica Móvil de Chile S.A..

The dividend payment and modification of the Investment and Financing Strategy are subject to the closing of the transaction.

MODIFICATIONS APPROVED AT THE LOCAL BONDHOLDERS MEETING

As part of the sale transaction of Telefónica Móvil de Chile S.A., Telefónica CTC Chile reached an agreement with its local bondholders to exclude the transaction as a violation of the following obligations:

For the syndicated and bilateral loans totaling US$647 million, which had restricted the sale of more than 5% of consolidated assets, waivers were obtained from 28 local and international banks.

For the local bonds Series F, for a total amount of US$23 million, the contract was modified to allow the sale of Telefónica Móvil de Chile S.A.. An 84.5% of outstanding bonds approved the modification.

CHANGES TO THE BOARD OF DIRECTORS OF TELEFONICA CTC CHILE

On July 20, 2004, Telefónica CTC Chile's Board of Directors approved several changes to the Board:

Series A Directors Alternate Series A Directors

Bruno Philippi Antonio Viana Baptista

Narcis Serra I Serra José María Alvarez Pallete

Andrés Concha Juan Carlos Ros

Fernando Bustamante Juan Claro

Felipe Montt Alvaro Clarke

Hernán Cheyre Carlos Díaz

Series B Director Alternate Series B Director

Luis Cid Alfonso Ferrari

It is important to mention the incorporation of Mr. Narcís Serra as a new Series A Director and Deputy Chairman of the Company's Board. Mr. Serra is Ph.D. in Economics by the Universidad Autonoma of Barcelona and Honory Fellow from the London School of Economics, as well as having held important politic positions in Spain between 1979 and 1995.

WE INVITE YOU TO VISIT TELEFONICA CTC CHILE'S INVESTOR RELATIONS WEBSITE AT: www.telefonicactcchile.cl (Investor Relations)

For more information contact:

Sofía Chellew - Verónica Gaete

María José Rodríguez - Florencia Acosta Kevin Kirkeby

TELEFONICA CTC CHILE THE GLOBAL CONSULTING GROUP

Tel.: 562-691-3867 646-284-9416

Fax: 562-691-2392

E-mail: E-mail:

schelle@ctc.cl, vgaete@ctc.cl kkirkeby@hfgcg.com

mjrodri@ctc.cl, macosta@ctc.cl

Compañía de Telecomunicaciones de Chile S.A., the first South American company to list shares on the New York Stock Exchange, is the largest telecommunications enterprise in Chile, providing local service, as well as domestic and international long distance services throughout the country. Additionally, the Company provides equipment marketing, data transmission, value-added services and information systems services and operates a nationwide cellular network

This news release contains certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1996, including but not limited to Compañía de Telecomunicaciones de Chile S.A.'s expectations for its performance for the quarter. Forward looking statements may also be identified by words such as "believes", "expects", "anticipates", "projects", "intends", "should", "seeks", "estimates", "future", or similar expressions. The forward-looking statements included in this news release are based on current expectations, but actual results may differ materially from anticipated future results due to various factors many of which are beyond the control of Compañía de Telecomunicaciones de Chile S.A. and its subsidiaries. Certain factors which could cause the actual results of Compañía de Telecomunicaciones de Chile S.A. a nd its subsidiaries to differ materially from the expected results include, among others, changes in Chile's regulatory framework, impact of increased competition and other factors beyond Compañía de Telecomunicaciones de Chile S.A.'s control

==================

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.

Date: July 22, 2004

COMPAÑÍA DE TELECOMUNICACIONES DE CHILE S.A.

By: /s/ Julio Covarrubias F. 

Name: Julio Covarrubias F.

Title: Chief Financial Officer

EX-1

PHYSICAL STATISTICS
	IT	IIT	IIIT	IVT	IT	IIT
	2003	2003	2003	2003	2004	2004
Total lines in service at the end of period	2,630,223	2,566,384	2,486,885	2,416,779	2,419,587	2,397,404
Average number of lines in service (quarterly)	2,655,948	2,594,404	2,524,124	2,458,688	2,412,799	2,407,635
Number of lines installed (1)	3,026,374	3,030,377	3,033,792	3,037,267	3,040,989	3,041,713
Lines per 100 Inhabitants (2)	17.4%	17.0%	16.5%	16.0%	16.0%	15.9%
Public telephones in service at end of period	35,396	35,366	34,699	34,519	32,692	31,497
Effective minutes of local traffic measured by second (million)	3,552	3,866	3,894	3,867	3,409	3,471
Local calls MLS (millions)	1,201	1,247	1,254	1,282	1,156	1,167
DLD traffic of 188 Telefónica Mundo + Globus 120 (thousands of minutes)	164,958	157,372	150,550	165,506	167,930	169,043
Outgoing ILD traffic of 188 Telefónica Mundo +Globus 120 (thousands of minutes)	16,146	16,293	16,003	15,875	16,943	17,436
Access charge traffic (thousands of minutes)	1,460,389	1,437,348	1,366,297	1,318,012	1,201,741	1,210,418
Number of lines connected	65,045	59,378	67,304	116,539	82,307	81,818
Number of CTC's employees (end of period) (3)	2,569	2,631	2,670	2,624	3,029	2,972
Number of subsidiaries' employees (end of period) (3)	2,121	2,176	2,126	2,096	1,770	1,772
Number of cellular subscribers (end of period)	1,883,837	1,944,393	2,030,761	2,269,757	2,500,135	2,738,580
ADSL connections (end of period)	66,060	84,202	107,580	125,262	143,108	164,513
(1) Includes circuits and ISDN lines in order to indicate the real capacity of the network.
(2) 2002 Poll (15.1 million inhabs.) identified that estimated Chilean population by the "INE", Statistic National Institute, (15.7 million inhabs.) was overestimated
(3) It is included the permanent personnel plus personnel with fixed term contracts.
ANNUAL VARIATION
	IT	IIT	IIIT	IVT	IT	IIT
	2003	2003	2003	2003	2004	2004
Total lines in service at the end of period	-4.2%	-6.5%	-8.6%	-10.0%	-8.0%	-6.6%
Average number of lines in service (quaterly)	-2.9%	-5.1%	-7.9%	-9.0%	-9.2%	-7.2%
Numbers of lines installed	0.1%	0.2%	0.1%	0.5%	0.5%	0.4%
Lines per 100 Inhabitants	-0.4%	-2.8%	-5.0%	-6.5%	-8.1%	-6.4%
Public telephones in service at the end of period	-6.2%	-6.3%	-4.3%	-3.2%	-7.6%	-10.9%
Effective minutes of traffic measured by second (million)	-2.7%	5.9%	-2.3%	-7.4%	-4.0%	-10.2%
Local calls MLS (millions)	-3.5%	0.2%	-0.9%	-10.2%	-3.7%	-6.4%
DLD traffic of 188 Telefónica Mundo + Globus 120 (thousands of minutes)	-10.0%	-14.2%	-14.5%	-4.3%	1.8%	7.4%
Outgoing ILD traffic of 188 Telefónica Mundo +Globus 120 (thousands of minutes)	6.1%	7.1%	-8.0%	-8.7%	4.9%	7.0%
Access charge traffic (thousands of minutes)	-12.7%	-14.0%	-20.0%	-19.9%	-17.7%	-15.8%
Number of lines connected	-9.5%	-17.4%	-12.5%	19.0%	26.5%	37.8%
Number of CTC's employees (end of period)*	-20.8%	-18.8%	-17.9%	2.5%	17.9%	13.0%
Number of subsidiaries' employees (end of period)*	-54.2%	-53.0%	-13.9%	0.6%	-16.5%	-18.6%
Number of cellular subscribers (end of period)	14.1%	17.8%	15.3%	22.7%	32.7%	40.8%
ADSL connections (end of period)	236.3%	328.7%	160.7%	131.3%	116.6%	95.4%
* In January 2004 certain labor contracts with some employees, that corresponded to the local business after the restructuring in 2002, were regularized
since these contracts were still linked to other subsidiaries of the Company

Última actualización 22/07/04
Por Telefónica CTC Chile

EX-2

QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (CHGAAP)
( Ch$ millions as of June 30, 2004)
	ENE-JUN	IQ	IIQ	IIIQ	IVQ	ENE-JUN	IQ	IIQ	VARIATION
	2003	2003	2003	2003	2003	2004	2004	2004	IIQ04/IIQ03	2004/2003
OPERATING REVENUES
FIXED TELEPHONY	187,958	94,668	93,290	95,010	94,570	175,546	87,536	88,010	-5.7%	-6.6%
Primary Service	175,435	87,858	87,577	85,620	85,226	160,827	80,564	80,263	-8.4%	-8.3%
Telephone Line Serv.Fee (Fixed Monthly Charge)	79,110	40,107	39,003	37,682	36,567	73,215	35,836	37,379	-4.2%	-7.5%
Variable Charge	72,867	36,298	36,569	35,998	35,935	60,840	31,557	29,283	-19.9%	-16.5%
Connections and other installations	3,017	1,627	1,390	1,328	1,323	2,021	1,252	769	-44.7%	-33.0%
Value added services	9,339	4,553	4,786	4,549	4,387	8,584	4,069	4,515	-5.7%	-8.1%
Equipment Marketing	4,570	2,270	2,300	1,909	2,397	5,043	2,901	2,142	-6.9%	10.4%
Other fixed telephony revenues	6,532	3,003	3,529	4,154	4,617	11,124	4,949	6,175	75.0%	70.3%
Access Charges and Interconnections	11,192	5,838	5,354	6,429	8,213	13,229	5,801	7,428	38.7%	18.2%
Domestic long distance	4,523	2,341	2,182	2,162	2,152	4,212	1,863	2,349	7.7%	-6.9%
International long distance	1,459	737	722	641	606	1,163	512	651	-9.8%	-20.3%
Other interconnection services	5,210	2,760	2,450	3,626	5,455	7,854	3,426	4,428	80.7%	50.7%
Directory Advertising	1,331	972	359	2,961	1,131	1,490	1,171	319	-11.1%	11.9%
LONG DISTANCE	33,822	17,533	16,289	14,995	13,332	29,984	15,224	14,760	-9.4%	-11.3%
Domestic Long Distance	14,650	7,817	6,833	6,268	5,501	12,773	6,305	6,468	-5.3%	-12.8%
International Service	13,480	6,884	6,596	6,013	5,280	12,205	6,356	5,849	-11.3%	-9.5%
Rental of LD Network	5,692	2,832	2,860	2,714	2,551	5,006	2,563	2,443	-14.6%	-12.1%
MOBILE COMMUNICATIONS	112,862	55,635	57,227	60,343	66,316	130,061	66,484	63,577	11.1%	15.2%
Outgoing Traffic	68,035	32,754	35,281	39,561	43,026	92,025	46,135	45,890	30.1%	35.3%
Interconnection under Calling Party Pays	44,827	22,881	21,946	20,782	23,290	38,036	20,349	17,687	-19.4%	-15.1%
CORPORATE CUSTOMER COMMUNICATIONS	37,969	18,206	19,763	19,761	21,225	38,972	18,959	20,013	1.3%	2.6%
Equipment	7,973	3,670	4,303	4,158	5,455	6,312	2,821	3,491	-18.9%	-20.8%
Complementary Services	7,442	3,804	3,638	4,233	4,376	8,792	4,658	4,134	13.6%	18.1%
Data services	12,904	6,275	6,629	6,542	7,325	15,343	7,722	7,621	15.0%	18.9%
Dedicated links and others	9,650	4,457	5,193	4,828	4,069	8,525	3,758	4,767	-8.2%	-11.7%
OTHER BUSINESSES	28,672	14,675	13,997	17,193	15,266	30,373	15,068	15,305	9.3%	5.9%
Public Telephones	5,482	2,948	2,534	3,018	2,670	5,495	2,765	2,730	7.7%	0.2%
Interior installation and equipment marketing	14,963	7,494	7,469	8,089	8,133	15,862	8,083	7,779	4.2%	6.0%
Other Operating Revenues	8,227	4,233	3,994	6,086	4,463	9,016	4,220	4,796	20.1%	9.6%
TOTAL OPERATING REVENUES	401,283	200,717	200,566	207,302	210,709	404,936	203,271	201,665	0.5%	0.9%
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (CHGAAP), continued
( Ch$ millions as of June 30, 2004)
	ENE-JUN	IQ	IIQ	IIIQ	IVQ	ENE-JUN	IQ	IIQ	VARIATION
	2003	2003	2003	2003	2003	2004	2004	2004	IIQ04/IIQ03	2004/2003
OPERATING COSTS AND EXPENSES
Salaries	27,195	13,123	14,072	15,150	14,949	28,192	13,910	14,282	1.5%	3.7%
Depreciation	131,941	65,804	66,137	67,378	66,478	127,975	64,793	63,182	-4.5%	-3.0%
Other Operating Costs	99,724	49,466	50,258	50,379	56,992	114,940	57,677	57,263	13.9%	15.3%
Adm. & Selling Expenses	81,674	38,996	42,678	46,504	44,647	88,863	42,832	46,031	7.9%	8.8%
TOTAL OPERATING COSTS AND EXPENSES	340,534	167,389	173,145	179,411	183,066	359,970	179,212	180,758	4.4%	5.7%
OPERATING INCOME	60,749	33,328	27,421	27,891	27,643	44,966	24,059	20,907	-23.8%	-26.0%
EBITDA	192,983	99,210	93,773	95,437	96,499	176,030	90,216	85,814	-8.5%	-8.8%
Operating Margin	15.1%	16.6%	13.7%	13.5%	13.1%	11.1%	11.8%	10.4%	-3.3pp	-4.0pp
EBITDA Margin	48.1%	49.4%	46.8%	46.0%	45.8%	43.5%	44.4%	42.6%	-4.2pp	-4.6pp
NON-OPERATING INCOME
Interest Income	4,619	2,313	2,306	1,360	1,155	3,603	1,864	1,739	-24.6%	-22.0%
Other Non-Operating Income	6,803	1,815	4,988	4,626	1,004	7,795	703	7,092	42.2%	14.6%
Revenues from Related Companies	212	155	57	430	43	83	23	60	5.3%	-60.8%
Interest Expense	-34,844	-17,456	-17,388	-14,805	-12,086	-22,905	-11,494	-11,411	-34.4%	-34.3%
Amortization of Goodwill	-7,591	-3,779	-3,812	-12,747	-2,931	-5,726	-2,863	-2,863	-24.9%	-24.6%
Other Non-Operating Expenses	-4,527	-1,820	-2,707	-2,626	-5,418	-5,727	-1,006	-4,721	74.4%	26.5%
Monetary Correction	-318	2,117	-2,435	1,274	-318	2,833	-1,312	4,145	-270.2%	-990.9%
TOTAL NON-OPERATING INCOME	-35,646	-16,655	-18,991	-22,488	-18,551	-20,044	-14,085	-5,959	-68.6%	-43.8%
INCOME BEFORE INCOME TAX	25,103	16,673	8,430	5,403	9,092	24,922	9,974	14,948	77.3%	-0.7%
Income Tax	-16,817	-9,301	-7,516	-4,020	-8,404	-15,163	-6,506	-8,657	15.2%	-9.8%
Minority Interest	-12	-15	3	-92	-38	74	45	29	866.7%	-716.7%
Amortization of Negative Goodwill	0	0	0	0	0	0	0	0	-	-
NET INCOME	8,274	7,357	917	1,291	650	9,833	3,513	6,320	589.2%	18.8%
Observed exchange rate (end of the period)		731.56	699.12	660.97	593.80		616.41	636.30
		IQ	IIQ	IIIQ	IVQ		IQ	IIQ
		2003	2003	2003	2003		2004	2004
Earnings per Common Share (Ch$)		7.7	1.0	1.3	0.7		3.7	6.6
Earnings per ADR (US$)		0.042	0.005	0.008	0.005		0.024	0.042
Weighted Average Number of Shares Fully Paid (millions)		957.2	957.2	957.2	957.2		957.2	957.2

Última actualización 22/07/04
Por Telefónica CTC Chile

EX-3

CONSOLIDATED BALANCE SHEET (ChGAAP)
(Figures in thousands of Ch$ as of June 30, 2004)
ASSETS			2004	2003	LIABILITIES			2004	2003
			Ch$	Ch$				Ch$	Ch$
CURRENT ASSETS					CURRENT LIABILITIES
	Cash and banks		14,842,724	10,440,390		Banks and financial institutions - short-term		19,188,243	9,364,256
	Time deposits		55,901,258	269,644		Banks and financial institutions - current maturities		88,452,923	68,120,363
	Marketable securities		49,920,719	42,742,457		Promisory Notes		34,271,450	19,922,031
	Trade receivables		210,532,769	205,458,140		Debentures		116,451,506	19,265,496
	Notes receivable		8,148,694	5,220,182		Current maturities of other long-term liabilities		451,300	473,851
	Sundry debtors		11,067,541	12,302,660		Dividends payable		96,248	150,434
	Due from related companies		18,513,300	20,242,149		Accounts payable		125,971,902	128,964,045
	Inventories		28,287,141	18,867,710		Notes payable		136,526	153,874
	Refundable taxes		8,086,475	21,493,889		Sundry creditors		13,376,802	23,214,363
	Prepaid expenses		7,417,858	9,302,932		Due to related companies		24,503,140	22,388,168
	Deferred taxes		18,560,583	28,767,374		Provisions		7,089,018	6,642,863
	Other current assets		78,759,036	33,422,202		Withholdings		7,943,188	10,781,000
		Total current assets	510,038,098	408,529,729		Unearned income		9,965,733	7,676,480
						Other current liabilities		3,052,087	2,891,331
FIXED ASSETS
	Land		27,877,130	27,861,031			Total current liabilities	450,950,066	320,008,555
	Construction and infrastructure works		187,377,097	187,562,539	LONG-TERM LIABILITIES
	Machinery and equipment		3,519,095,352	3,433,837,877
	Other fixed assets		337,133,731	381,969,479		Banks and financial institutions		321,842,299	397,487,784
	Technical revaluation		9,297,385	9,295,493		Debentures		327,725,952	474,965,270
	Less: accumulated depreciation		2,324,270,126	2,127,318,970		Due to related companies		22,181,473	24,038,068
		Fixed assets-net	1,756,510,569	1,913,207,449		Sundry creditors		3,408,791	12,075,174
						Provisions		18,575,835	18,734,549
OTHER ASSETS						Deferred Taxes		50,912,310	50,805,912
	Investments in related companies		7,736,017	41,717,314		Other long-term liabilities		4,324,106	4,852,586
	Investments in other companies		3,885	3,885			Total long term liabilities	748,970,766	982,959,343
	Goodwill		153,667,705	175,061,408	MINORITY INTEREST			1,253,942	1,176,940
	Long-term debtors		35,261,201	40,961,407
	Intangibles		42,776,178	34,693,696	EQUITY
	Amortization (less)		5,842,624	3,554,407
	Other long-term assets		8,539,217	11,445,881		Paid-in capital		859,490,281	741,625,583
						Reserve		6,875,921	8,157,880
						Share premium		0	116,582,739
		Total other assets	242,141,579	300,329,184		Other reserves		-584,245	1,653,415
						Retained earnings:		441,733,515	449,901,907
							Prior years	431,900,550	441,627,672
							(Losses) Income for the period	9,832,965	8,274,235
							Total equity	1,307,515,472	1,317,921,524
TOTAL ASSETS			2,508,690,246	2,622,066,362	TOTAL LIABILITIES AND EQUITY			2,508,690,246	2,622,066,362

Última actualización 22/07/04
Por Telefónica CTC Chile

EX-4

COMPAÑÍA DE TELECOMUNICACIONES DE CHILE S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS PERIODS ENDED AS OF JUNE 30, 2004 AND 2003
Figures in Thousands of Constant Ch$ as of June 30, 2004
	2004	2003
NET CASH PROVIDED BY USING IN OPERATING ACTIVITIES	84,109,068	157,699,318
Net income (Gain/Losses)	9,832,965	8,274,235
Result in sales of assets	8,118	27,717
Gain (loss) in sale of fixed assets	8,118	27,717
Charges (credits) to income not affecting cash flows:	150,552,142	155,126,974
Depreciation	132,319,041	133,270,126
Intangibles amortization	1,247,273	873,837
Write-off and provisions	14,293,841	15,511,230
Equity earnings from related companies (less)	-177,740	-487,860
Equity losses from related companies	93,651	275,552
Amotization of goodwill	5,726,496	7,590,345
Price-level restatement (net)	-702,772	1,277,345
Gain (loss) on foreign currency transactions	-2,131,583	-959,173
Other credits not affecting cash flows	-592,339	-4,128,316
Other charges not affecting cash flows	476,274	1,903,888
Decrease (increase) in current assets:	-36,110,412	4,336,966
(Increase) Decrease in trade receivables	-12,717,231	-16,036,232
(Increase) Decrease in inventories	-14,411,579	-6,443,781
(Increase) Decrease in other current assets	-8,981,602	26,816,979
Increase (decrease) in current liabilities:	-40,101,878	-10,079,161
Increase (decrease) in due to related companies,
related with operating activities	-40,117,704	-16,731,284
Increase (decrease) in accrued interest payable	2,659,686	1,499,559
Increase (decrease) in income tax payable, net	7,268,258	9,473,639
Increase (decrease) in other accounts payable
related with non operating result	-8,873,036	-7,745,532
Increase (decrease) in value-added tax, net, and other	-1,039,082	3,424,457
Income ( loss) of minority interest	-71,867	12,587
COMPAÑÍA DE TELECOMUNICACIONES DE CHILE S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS PERIODS ENDED AS OF JUNE 30, 2004 AND 2003
Figures in Thousands of Constant Ch$ as of June 30, 2004
	2004	2003
NET CASH PROVIDED BY FINANCING ACTIVITIES	23,702,084	-117,676,773
Liabilities with the public	34,292,228	19,914,500
Other financing disbursements	74,592	0
Repayment of dividends (less)	-3,135,079	-
Repayment of loans (less)	-3,187,674	-89,748,270
Repayment of liabilities with the public (less)	-4,341,983	-47,843,003
NET CASH USED IN INVESTING ACTIVITIES	-48,388,884	-39,785,324
Sale of fixed assets	76,605	-
Sale of permanent investments	9,130,225	-
Sale of other investments	-	50,048,175
Other revenues from investments	-	206
Additions to fixed assets (less)	-53,308,018	-73,055,747
Investments in financial instruments (less)	-3,082,801	-15,006,535
Other investment disbursements (less)	-1,204,895	-1,771,423
NET CASH FLOW FOR THE PERIOD	59,422,268	237,221
PRICE-LEVEL RESTATEMENT EFFECT ON CASH AND CASH EQUIVALENTS	-640,197	-535,244
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	58,782,071	-298,023
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	33,597,302	21,413,474
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	92,379,373	21,115,451

Última actualización 22/07/04
Por Telefónica CTC Chile