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 25, 2006

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, 2006 announcing 2^nd Quarter 2006 results.

Exhibit 1 Physical Statistics for 2Q 2006

Exhibit 2 Statements of Income for 2Q 2006

Exhibit 3 Balance Sheets for 2Q 2006

Exhibit 4 Cash Flows for 2Q 2006

Quarterly Earnings Release

FOR IMMEDIATE RELEASE

COMPAÑIA DE TELECOMUNICACIONES DE CHILE S.A.

ANNOUNCES RESULTS FOR THE SECOND QUARTER 2006 (2Q06)

Highlights:

• Digital TV service launched in June, reaching more than 10,000 clients in the first month of operations.
• EBITDA in 2Q06 reached Ch$70,520 million (US$130.7 million) compared to Ch$77,736 million (US$144.1 million) in 2Q05. EBITDA margin reached 49.7% in 2Q06 compared to 51.6% in 2Q05.
• The Company recorded a net income of Ch$6,306 million (US$11.7 million) in 2Q06 compared to a net income of Ch$13,629 million (US$25.3 million) in 2Q05.
• Average financial debt decreased 22.9% from US$1,070 million in 2Q05 to US$824 million in 2Q06.

Santiago, Chile - July 21, 2006, Compania de Telecomunicaciones de Chile S.A. (NYSE: CTC) ("Telefonica Chile" or the "Company") today announced its consolidated quarterly financial results, submitted to an interim financial review of independent auditors, stated in Chilean GAAP (in constant Chilean pesos as of June 30, 2006) for the second quarter of 2006. U.S. dollar equivalent information is based on the Observed Exchange Rate (as defined by the Chilean Central Bank) for June 30, 2006, which was Ch$539.44 = 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.telefonicachile.cl.

CONSOLIDATED RESULTS FOR 2Q06 (Comparisons refer to 2Q05)

REVENUES

Telefónica Chile's revenues decreasedby 5.8% in 2Q06 as compared to 2Q05, amounting to Ch$141,969 million (US$263.2 million). This variation is mainly the result of lower revenues from basic telephony and long distance businesses, which were partly compensated by the increase in revenues from broad band (ADSL) and flexible plans.

OPERATING COSTS AND EXPENSES

Operating costs and expenses (excluding depreciation) decreased 2.1% in 2Q06, to Ch$71,448 million (US$132.5 million), mainly explained by a 17.6% decrease in salary costs, mainly due to a 10.2% reduction in average personnel as compared to 2Q05 and a 2.1% reduction in uncollectables due to bad debt containment efforts. These were partly offset by higher costs of sales and commissions (+31.5%) resulting from higher commercial activity of ADSL and the Digital Television service launched, as well as, an increase of 40.8% in interconnections costs and a 15.1% increase in rental capacity costs.

EBITDA

As a result, EBITDA in 2Q06 fell 9.3% to Ch$70,520 million (US$130.7 million), compared to Ch$77,736 million (US$144.1 million) recorded in 2Q05.

EBITDA margin in 2Q06 was 49.7%, compared to the 51.6% recorded in 2Q05.

DEPRECIATION

Total depreciation in 2Q06 increased 7.3% to Ch$52,448 million (US$97.2 million), as compared to 2Q05. This increase is mainly explained by the accelerated depreciation of out of service assets such as the Cable TV network in the city of Concepción and other assets such as ADSL modems and home security equipments not be recuperated from former clients.

OPERATING INCOME

OPERATING INCOME decreased 37.4% to Ch$18,072 million (US$33.5 million) in 2Q06 when compared to Ch$28,848 million (US$53.5 million) in 2Q05.

Operating margin reached 12.7% in 2Q06 vs. 19.1% in 2Q05.

NON-OPERATING RESULTS

NON-OPERATING RESULTregistered a non-operating loss of Ch$2,713 million (US$5.0 million) in 2Q06 as compared to a non-operating loss of Ch$3,702 million (US$6.9 million) in 2Q05.

The non-operating loss in 2Q06 was basically due to i) interest expenses of Ch$5,354 million (US$9.9 million), which decreased by 27.3% on account of the 22.9% reduction in the average interest bearing debt in pesos (US$ 824 million) and (ii) other non-operating expenses of Ch$1,530 million (US$2.8 million) in 2Q06, as compared to Ch$2,361 million (US$4.4 million) in 2Q05; this difference is mainly the result of a write-off in 2T05 for out of service assets.

These non-operating losses were partly offset by (i) a gain for monetary correction (price level restatement) in the amount Ch$2,474 million (US$4.6 million), resulting in a gain of Ch$2,023 million (US$3.8 million) from the impact of the positive CPI of 1.4% during 2Q06 and a gain of Ch$451 million (US$0.8 million) in exchange differences due to the impact of the Chilean peso depreciation against the US dollar. This compared to a gain for monetary correction (price level restatement) in the amount Ch$3,377 million (US$6.9 million) in 2Q05, explained by the impact of a higher CPI of 1.8% during 2Q05 and (ii) a 28.9% increase in financial income as compared with 2Q05 due to short-term investments made in 2Q06 with funds used to pay dividends in June 2006.

INCOME TAXES

INCOME TAXES: In 2Q06, Telefónica Chile recorded a total income tax charge in the amount of Ch$9,189 million (US$17.0 million). The above is compared to the Ch$11,514 million (US$21.3 million) tax charge in 2Q05.

Total income tax in 2Q06 consists of Ch$9,242 million (US$17.5 million) in current income taxes, partly offset by a Ch$3,418 million (US$6.3 million) charge for deferred taxes for previous periods (complementary accounts) and a positive charge of Ch$3,471 million (US$6.4 million) due to tax liabilities (deferred taxes) reverted due to lower levels of depreciation in the taxable income base as result of lower investments as compared to previous years.

NET RESULT

The Company recorded net income of Ch$6,306 million (US$11.7 million) in 2Q06 vs. net income of Ch$13,629 million (US$25.9 million) in 2Q05.

Net income per ADR in 2Q06 amounted to US$0.049, compared to the net income per ADR of US$0.098 recorded in 2Q05. Furthermore, net income per share in 2Q06 equaled Ch$6.6 as compared to Ch$14.2 in 2Q05.

CAPEX

Capital expenditures for Telefónica Chile and its consolidated subsidiaries amounted to US$48.8 million in 2Q06 compared to US$31.3 million in 2Q05. Capital expenditures were mainly focused on the development of broadband (ADSL), television and data transmission.

REVENUES BY BUSINESS UNIT

FIXED TELECOMMUNICATIONS

Bundled services Increased rate of ADSL growth. Connections increased 69.3% in 2Q06 as compared to 2Q05

Fixed Telecommunications is divided into Basic Telephony, Broadband, Access Charges and Interconnections and Other Fixed Telecommunications Businesses (including equipment marketing, directory advertising, public telephones and Digital TV, among others). Fixed telecommunications revenues, which represented 76.6% of total operating revenues in 2Q06, decreased 5.7% to Ch$108,730million (US$201.6 million) in the period as compared to 2Q05.

Basic Telephony revenues, which include the fixed monthly charge, variable charge, connections and other installations, plans of minutes (allowed under tariff flexibility), value-added services and other basic telephony revenues (services through operator and rural telephony, among others), decreased 15.5% to Ch$66,278 million (US$122.9 million) in 2Q06 as compared to 2Q05. This decrease is mainly attributable to a 36.8% decrease in the fixed monthly charge and a 29.1% decrease in the variable charge, was partially compensated by an increase in revenue from flexible plans, that as of June 30, 2006 represented 41.0% of total lines in service as compared to 20.1% in June 2005. The aggregate 13.8% decline in these items is mainly due to: (i) a 17.8% decrease in local traffic for 2Q06 compared to 2Q05 (ii) average lines in service decreased 2.6% compared to 2Q05, mainly as result of a revision of customer base and a change in the criteria to cut-off lines to 90 days for prepaid lines wi thout traffic and immediately for voluntary cut-offs, whereas previously, they were taken out of customer base after 120 days and 60 days, respectively, and (iii) the average revenue per line fell due to a higher proportion of economic lines and a lower number of work days in 2T06 as compared to the same quarter 2005.

Broadband (ADSL) revenues grew 44.6% to Ch$15,542 million (US$28.8 million) in 2Q06, due to the 69.3% growth in ADSL connections in the quarter. This growth in ADSL connections was driven by the successful marketing of joint offers of voice plus broadband and others, such as with digital TV starting on June 14, 2006 .

Access charges and interconnection revenues include revenues from access charges generated by LD carriers, as well as those paid by other telecommunications operators that use Telefónica Chile's network. They also include other interconnection services apart from access charges, such as interconnection of networks and information services to carriers and services to wholesalers, among others. These revenues increased by 6.5% in 2Q06 to Ch$12,373 million (US$22.9 million) as compared to 2Q05. This increase was mainly due to a 22.7% increase in other interconnections revenues due to higher revenues from rental capacity to other telecom operators and higher revenues from access charges from mobile operators. This was partly compensated by a decrease of 24.9% and 46.8% in revenues of access charges from DLD and ILD, respectively, mainly due to a 20.4% drop in traffic of LD access charges.

Revenues from Other fixed telecommunications businesses, includes revenues generated as a result of the Company's contract with Publiguías, those generated by the subsidiaries Telemergencia (home security services) and Telefónica Internet Empresas (TIE) related to internet access, public telephone revenues, interior installations, equipment marketing and digital TV starting in June 14, 2006. These revenues increased slightly by 0.5% in 2Q06 to Ch$14,587 million (US$27.0 million) as compared to 2Q05. This is mainly due to an increase in equipment marketing revenues (23.1%) associated to PABX, fax machines and telephone equipments for small and medium business and a 11.7% increase in revenues from home security services, which were partly compensated by lower revenues from directory advertising and ISP due to the migration of clients to broad band (ADSL).

LONG DISTANCE

Increased market share in DLD and ILD to 46.7% and 39.2%, respectively

Long distance revenues include revenues from domestic and international long distance traffic, as well as revenues from the rental of the long distance network to other telecom operators. Total long distance revenues, which accounted for 9.8% of consolidated operating revenues in 2Q06, decreased 11.1% as compared to 2Q05, amounting to Ch$13,978 million (US$25.9 million). The decrease in revenues is explained by (i) a 16.3% and 5.7% decrease in DLD and ILD revenues, respectively; and, (ii) a 10.9% decrease in revenues from rental of the long distance network as compared to 2Q05. This is mainly explained by a 14.2% decrease in DLD traffic and a 2.5% decrease in average rate, and additionally, the 2.4% decrease in ILD traffic and the 18.5% decrease in ILD average rate.

The Company's advertising campaign as well as the successful commercial activities focused on regional small and medium business, resulted in an increase in DLD market share from 46.2% in 2Q05 to 46.7% in 2Q06 and in ILD from 31.9% in 2Q05 to 39,2% in 2Q06.

CORPORATE CUSTOMER COMMUNICATIONS

Revenues from corporate customer communications represented 13% of consolidated revenues

Corporate customer communications include revenues from (i) telecommunications equipment, which mainly refers to the sale of voice equipment; (ii) complementary telephone services, such as digital communications; (iii) data services, including ATM, Frame Relay, housing and hosting services and services related to the IP network, and (iv) dedicated links and others, including videoconference, Datared, E1 Links and VSAT, e-solutions, and consulting services to corporate customers.

Revenues from corporate customer communications, which represented 13.2% of consolidated revenues, decreased 0.9% to Ch$18,722million (US$34.7 million) in 2Q06 as compared to 2Q05. The decrease in these revenues was mainly due to: (i) a 16.6% decrease in equipment marketing revenues, (ii) a 3.6% decrease in complementary services revenues and (iii) a 2.1% decrease in revenues from data services. The above was partly offset by a 15.5% increase in revenues from dedicated links and others, due to higher revenues from advanced voice services, hosting and data equipment rental. This industry continues with the migration of traditional data technologies to IP technologies which face pricing competition. In 2Q06, ATM links and Datared decreased by 33.2% and 40.6%, while data links through the IP network (dedicated IP) grew by 10.0%.

OTHER BUSINESSES

These revenues include those from other Company subsidiaries, such as Telepeajes, Tecnonaútica and t-gestiona, among others. These revenues, which represented 0.3% of total operating revenues in 2Q06, decreased 40.3% to Ch$489 million (US$0.9 million) in 2Q06, mainly explained by the change of Tecnonáutica from a software development provider to a Television provider changing its name to Telefónica Multimedia Chile S.A..

BUSINESS UNIT PERFORMANCE FOR 2Q06

	EBITDA	EBITDA Margin	Contribution to Net Result
	(Ch$mn		(Ch$mn)
Consolidated	70,520	49.7%	6,306
Individual by Business Unit
Fixed Telecommunications	54,558	45.4%	(1,185)
Long Distance	7,433	36.4%	4,022
Corp. Communications	7,675	35.6%	3,681

COMPANY NEWS

CAPITAL REDUCTION AND FINAL DIVIDEND PAYMENT

On June 15, 2006 were distributed to shareholders Ch$40,200,513,570 (approx. US$ 75 million) equivalent to Ch$41,99991 per share, for the Capital reduction approved at the Extraordinary Shareholders' Meeting held on April 20, 2006.

On June 22, 2006, the final dividend approved in the Shareholders' Meeting held on April 20, 2006 of Ch$15.31054 per share was distributed and charged against the net income of 2005, totaling Ch$14,655 million (approximately US$27.9 million), and represented 58.19% of total 2005 net income. This dividend together with the dividend paid in November 2005, represents 100% of net income, in accordance with the Company's Dividend Policy.

DIGITAL TELEVISION SERVICE LAUNCHED

On June 14, 2006, the Company entered the pay television market and launched "Telefónica Televisión Digital". This service provides digital TV through satellite technology with nationwide coverage. It consists in an entry plan with very competitive price (Ch$9.900 or US$18), the client can add blocks of theme channels such as movies, sports or news, for an additional charge. All plans include parental control, on screen programs guide, digital quality and access to pay-per-view services, among others. This new service will allow the Company to defend and improve the customer base and massify broad band (ADSL) through bundled of services. As of June 30, 2006 paid television clients reached 10,423.

COLLECTIVE BARGAINING PROCESS

During the month of June, the Company successfully finalized a collective bargaining process with several unions, representing approximately 1,500 employees (44% of total employees). The main subjects for this bargaining were benefits for employees salaries and benefits. Average labor cots of those that negotiated are expected to grow in line with inflation as a result of the agreements, which apply for 38 months to September, 2009.

FINANCING ACTIVITIES

On July 11, 2006 the Company issued Commercial Papers for a total amount of US$12.9 million with a nominal monthly rate of 0.44% and maturities in 78 days.

PLEASE NOTICE THE CHANGE IN e- MAIL ADDRESSES

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

For more information contact:

Sofía Chellew - Verónica Gaete

María José Rodríguez - Florencia Acosta Cesar Villavicencio

TELEFONICA CHILE THE GLOBAL CONSULTING GROUP

Tel.: 562-691-3867 646-284-9423

Fax: 562-691-2392

E-mail: E-mail:

sofia.chellew@telefonicachile.cl, cvillavicencio@hfgcg.com

veronica.gaete@telefonicachile.cl

mariajose.rodriguez@telefonicachile.cl

florencia.acosta@telefonicachile.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 leads the corporate data transmission service as well as broadband in Chile and provides equipment marketing, value-added and digital television services, among others.

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 25, 2006

COMPAÑÍA DE TELECOMUNICACIONES DE CHILE S.A.

By /s/ Julio Covarrubias F.

Name: Julio Covarrubias F.

Title: Chief Financial Officer

EX-1

PHYSICAL STATISTICS
	IQ	IIQ	IIIQ	IVQ	IQ	IIQ	IIIQ	IVQ	IQ	IIQ
					2005	2005	2005	2005	2006	2006
Total lines in service at the end of period					2,437,542	2,456,807	2,475,007	2,440,827	2,418,073	2,338,444
Average number of lines in service (quarterly)					2,432,777	2,446,081	2,467,791	2,459,495	2,427,188	2,383,563
Number of lines installed (1)					3,048,719	3,038,008	3,019,735	3,007,432	3,015,516	3,017,825
Public telephones in service at end of period					27,999	27,002	25,593	24,143	23,465	22,698
Effective minutes of local traffic measured by second (million)					2,969	3,105	3,032	2,906	2,550	2,552
Local calls MLS (millions)					1,069	1,124	1,116	1,126	1,024	1,024
DLD traffic of 188 Telefónica Mundo + Globus 120 (thousands of minutes)					153,439	155,179	149,349	143,691	144,003	133,179
Outgoing ILD traffic of 188 Telefónica Mundo +Globus 120 (thousands of minutes)					15,636	16,964	16,684	16,298	17,350	16,560
Access charge traffic (thousands of minutes)					934,998	941,730	866,947	833,640	790,043	749,694
Number of lines connected					88,778	96,577	89,579	83,154	97,695	87,421
Number of CTC's employees (end of period) (2)					2,875	2,912	2,946	2,945	2,724	2,762
Number of subsidiaries' employees (end of period) (2)					972	986	974	965	822	676
ADSL connections (end of period)					221,880	247,551	268,344	314,177	356,986	419,040
(1) Includes circuits and ISDN lines in order to indicate the real capacity of the network.
(2) It is included the permanent personnel plus personnel with fixed term contracts.
ANNUAL VARIATION
	IQ	IIQ	IIIQ	IVQ	IQ	IIQ	IIIQ	IVQ	IQ	IIQ
					2005	2005	2005	2005	2006	2006
Total lines in service at the end of period					0.7%	2.5%	3.2%	0.6%	-0.8%	-4.8%
Average number of lines in service (quaterly)					0.8%	1.6%	3.0%	2.1%	-0.2%	-2.6%
Numbers of lines installed					0.3%	-0.1%	-0.7%	-1.2%	-1.1%	-0.7%
Public telephones in service at the end of period					-14.4%	-14.3%	-15.7%	-23.4%	-16.2%	-15.9%
Effective minutes of traffic measured by second (million)					-12.9%	-10.5%	-13.2%	-14.1%	-14.1%	-17.8%
Local calls MLS (millions)					-7.5%	-3.7%	-8.1%	-7.4%	-4.3%	-8.9%
DLD traffic of 188 Telefónica Mundo + Globus 120 (thousands of minutes)					-8.6%	-8.2%	-9.2%	-11.5%	-6.1%	-14.2%
Outgoing ILD traffic of 188 Telefónica Mundo +Globus 120 (thousands of minutes)					-7.7%	-2.7%	0.9%	1.3%	11.0%	-2.4%
Access charge traffic (thousands of minutes)					-22.2%	-22.2%	-27.1%	-22.2%	-15.5%	-20.4%
Number of lines connected					7.9%	18.0%	15.0%	-17.9%	10.0%	-9.5%
Number of CTC's employees (end of period)					-5.1%	-2.0%	1.0%	4.6%	-5.3%	-5.2%
Number of subsidiaries' employees (end of period)					-45.1%	-44.4%	-1.5%	3.9%	-15.4%	-31.4%
ADSL connections (end of period)					55.0%	50.5%	48.7%	56.5%	60.9%	69.3%

Última actualización 25/07/06
Por Telefónica CTC Chile

EX-2

QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (CHGAAP)
(Millions of Ch$ as of June 30, 2006)
	JAN-JUN	IQ	IIQ	IIIQ	IVQ	JAN-JUN	IQ	IIQ	IIIQ	IVQ	VARIATION
	2005	2005	2005	2005	2005	2006	2006	2006			IIQ06/IIQ05	2006/2005
OPERATING REVENUES
FIXED TELECOMMUNICATIONS	223,899	108,588	115,311	113,317	109,116	218,406	109,626	108,780			-5.7%	-2.5%
Basic Telephony	152,836	74,411	78,425	74,410	70,275	134,845	68,567	66,278			-15.5%	-11.8%
Telephone Line Serv.Fee (Fixed Monthly Charge)	67,380	33,236	34,144	30,660	26,858	46,141	24,559	21,582			-36.8%	-31.5%
Variable Charge	51,233	25,014	26,219	24,631	22,110	38,456	19,858	18,598			-29.1%	-24.9%
Connections and other installations	1,506	684	822	861	949	772	440	332			-59.6%	-48.7%
Plans of minutes (tariff flexibility)	19,254	8,733	10,521	12,022	14,954	38,749	17,825	20,924			98.9%	101.3%
Value added services	10,347	5,331	5,016	4,923	4,419	8,321	4,409	3,912			-22.0%	-19.6%
Other basic telephony revenues	3,116	1,413	1,703	1,313	985	2,406	1,476	930			-45.4%	-22.8%
Broadband	19,010	8,262	10,748	11,877	12,486	29,530	13,988	15,542			44.6%	55.3%
Access Charges and Interconnections	21,936	10,313	11,623	10,737	11,815	24,736	12,363	12,373			6.5%	12.8%
Domestic long distance	5,587	2,778	2,809	2,510	2,361	4,364	2,255	2,109			-24.9%	-21.9%
International long distance	1,460	663	797	514	423	843	419	424			-46.8%	-42.3%
Other interconnection services	14,889	6,872	8,017	7,713	9,031	19,529	9,689	9,840			22.7%	31.2%
Other Fixed Telecommunications businesses	30,117	15,602	14,515	16,293	14,540	29,295	14,708	14,587			0.5%	-2.7%
Directory Advertising	1,509	1,059	450	2,933	986	1,265	915	350			-22.2%	-16.2%
ISP- switched and dedicated	1,362	675	687	613	583	1,127	559	568			-17.3%	-17.3%
Security services (Telemergencia)	3,907	1,940	1,967	2,081	2,182	4,465	2,267	2,198			11.7%	14.3%
Public telephones	5,295	2,713	2,582	2,448	2,184	4,815	2,567	2,248			-12.9%	-9.1%
Interior installations	15,656	7,892	7,764	7,583	7,785	15,697	7,811	7,886			1.6%	0.3%
Equipment marketing	2,388	1,323	1,065	635	820	1,900	589	1,311			23.1%	-20.4%
Paid TV services	0	0	0	0	0	26	0	26			c.s.	c.s.
LONG DISTANCE	31,451	15,728	15,723	13,076	14,083	28,213	14,235	13,978			-11.1%	-10.3%
Domestic Long Distance	12,307	6,183	6,124	5,855	5,362	10,763	5,638	5,125			-16.3%	-12.5%
International Service	11,543	5,694	5,849	3,347	4,788	10,727	5,214	5,513			-5.7%	-7.1%
Rental of LD Network	7,601	3,851	3,750	3,874	3,933	6,723	3,383	3,340			-10.9%	-11.6%
CORPORATE CUSTOMER COMMUNICATIONS	38,110	19,227	18,883	19,323	21,640	37,041	18,319	18,722			-0.9%	-2.8%
Equipment	6,197	2,411	3,786	3,474	3,854	5,474	2,318	3,156			-16.6%	-11.7%
Complementary Services	7,017	3,480	3,537	4,051	3,759	6,837	3,429	3,408			-3.6%	-2.6%
Data services	15,112	8,338	6,774	6,543	6,773	12,846	6,217	6,629			-2.1%	-15.0%
Dedicated links and others	9,784	4,998	4,786	5,255	7,254	11,884	6,355	5,529			15.5%	21.5%
OTHER BUSINESSES	1,527	708	819	655	900	1,193	704	489			-40.3%	-21.9%
MOBILE COMMUNICATIONS	0	0	0	0	0	0	0	0			n/a	n/a
Outgoing Traffic	0	0	0	0	0	0	0	0			n/a	n/a
Interconnection under Calling Party Pays	0	0	0	0	0	0	0	0			n/a	n/a
TOTAL OPERATING REVENUES	294,987	144,251	150,736	146,371	145,739	284,853	142,884	141,969			-5.8%	-3.4%
	JAN-JUN	IQ	IIQ	IIIQ	IVQ	JAN-JUN	IQ	IIQ	IIIQ	IVQ	VARIATION
	2005	2005	2005	2005	2005	2006	2006	2006			IIQ06/IIQ05	2006/2005
OPERATING COSTS AND EXPENSES	243,304	121,416	121,888	130,360	125,380	247,044	123,147	123,897			1.6%	1.5%
OPERATING INCOME	51,683	22,835	28,848	16,011	20,359	37,809	19,737	18,072			-37.4%	-26.8%
EBITDA	151,915	74,179	77,736	65,023	69,934	141,176	70,656	70,520			-9.3%	-7.1%
Operating Margin	17.5%	15.8%	19.1%	10.9%	14.0%	13.3%	13.8%	12.7%			-6.4pp	-4.2pp
EBITDA Margin	51.5%	51.4%	51.6%	44.4%	48.0%	49.6%	49.4%	49.7%			-1.9pp	-1.9pp
NON-OPERATING INCOME
Interest Income	5,401	3,531	1,870	972	1,700	2,013	683	1,330			-28.9%	-62.7%
Other Non-Operating Income	1,462	611	851	788	890	808	506	302			-64.5%	-44.7%
Revenues from Related Companies	734	407	327	409	555	843	429	414			26.6%	14.9%
Interest Expense	-16,476	-9,110	-7,366	-6,613	-6,737	-10,370	-5,016	-5,354			-27.3%	-37.1%
Amortization of Goodwill	-794	-395	-399	-404	-403	-1,479	-1,130	-349			-12.5%	86.3%
Other Non-Operating Expenses	-3,879	-1,518	-2,361	-2,279	-7,063	-11,805	-10,275	-1,530			-35.2%	204.3%
Monetary Correction	210	-3,167	3,377	230	2,493	2,033	-441	2,474			-26.7%	868.1%
TOTAL NON-OPERATING INCOME	-13,342	-9,640	-3,702	-6,897	-8,565	-17,957	-15,244	-2,713			-26.7%	34.6%
INCOME BEFORE INCOME TAX	38,341	13,195	25,146	9,114	11,794	19,852	4,493	15,359			-38.9%	-48.2%
Income Tax	-16,202	-4,688	-11,514	-9,091	-8,466	-13,013	-3,824	-9,189			-20.2%	-19.7%
Minority Interest	16	19	-3	53	-99	202	66	136			c.s.	c.s.
Amortization of Negative Goodwill	0	0	0	0	0	0	0	0			c.s.	c.s.
NET INCOME	22,155	8,526	13,629	76	3,229	7,041	735	6,306			-53.7%	-68.2%
Observed exchange rate (end of the period)		585.93	579.00	529.20	512.50		526.18	539.44
		IQ	IIQ	IIIQ	IVQ		IQ	IIQ	IIIQ	IVQ
		2005	2005	2005	2005		2006	2006
Earnings per Common Share (Ch$)		8.9	14.2	0.1	3.4		0.8	6.6
Earnings per ADR (US$)		0.061	0.098	0.001	0.026		0.006	0.049
Weighted Average Number of Shares Fully Paid (millions)		957.2	957.2	957.2	957.2		957.2	957.2

Última actualización 25/07/06
Por Telefónica CTC Chile

EX-3

CONSOLIDATED BALANCE SHEET (ChGAAP)
(Figures in thousands of Ch$ as of June 30, 2006)
ASSETS			2006	2005	LIABILITIES			2006	2005
			Ch$	Ch$				Ch$	Ch$
CURRENT ASSETS					CURRENT LIABILITIES
	Cash and banks		5,860,347	6,421,661		Banks and financial institutions - short-term		0	9,618,994
	Time deposits		7,971,591	5,095,035		Banks and financial institutions - current maturities		1,905,431	34,840,439
	Marketable securities		16,380,773	26,918,702		Promisory Notes		11,706,912	35,321,520
	Trade receivables		149,188,941	176,966,521		Debentures		29,857,249	100,384,974
	Notes receivable		4,509,435	4,286,069		Current maturities of other long-term liabilities		15,715	26,292
	Sundry debtors		14,869,067	26,784,335		Dividends payable		1,586,965	1,838,801
	Due from related companies		19,447,743	17,409,380		Accounts payable		98,196,103	72,782,925
	Inventories		3,944,998	3,494,286		Other creditors		8,065,369	25,937,691
	Refundable taxes		9,088,396	6,367,642		Due to related companies		28,534,715	31,487,620
	Prepaid expenses		2,428,234	2,863,815		Provisions		7,172,105	6,452,930
	Deferred taxes		11,913,980	16,803,049		Withholdings		12,414,556	10,498,740
	Other current assets		22,926,671	20,437,377		Income tax		1,553,707	0
						Unearned income		8,258,192	8,107,719
						Other current liabilities		5,060,055	9,425,125
		Total current assets	268,530,176	313,847,872			Total current liabilities	214,327,074	346,723,770
FIXED ASSETS					LONG-TERM LIABILITIES
	Land		27,533,414	27,587,968
	Construction and infrastructure works		200,075,077	198,917,711		Banks and financial institutions		334,248,227	346,682,148
	Machinery and equipment		3,298,727,243	3,262,620,379		Debentures		66,122,966	42,738,389
	Other fixed assets		280,244,272	258,571,612		Sundry creditors		17,675,534	332,211
	Technical revaluation		9,372,019	9,863,818		Provisions		34,551,946	35,645,698
	Less: accumulated depreciation		2,559,861,382	2,389,989,319		Deferred Taxes		54,939,254	60,045,848
		Fixed assets-net	1,256,090,643	1,367,572,169		Other long-term liabilities		3,901,716	4,820,699
							Total long term liabilities	511,439,643	490,264,993
					MINORITY INTEREST			567,128	1,607,057
OTHER ASSETS					EQUITY
	Investments in related companies		8,526,818	8,840,521		Paid-in capital		872,492,215	913,596,382
	Investments in other companies		4,138	4,138		Reserve		9,677,815	9,135,963
	Goodwill		17,167,006	19,461,363		Other reserves		-1,564,937	-1,176,325
	Long-term debtors		12,468,907	18,288,870		Retained earnings:		7,041,369	22,155,177
	Intangibles		49,408,764	48,413,707			(Losses) Income for the period	7,041,369	22,155,177
	Amortization (less)		14,340,918	9,322,625			Interim dividend (less)	0	0
	Other long-term assets		16,124,773	15,201,002
		Total other assets	89,359,488	100,886,976			Total equity	887,646,462	943,711,197
TOTAL ASSETS			1,613,980,307	1,782,307,017	TOTAL LIABILITIES AND EQUITY			1,613,980,307	1,782,307,017

Última actualización 25/07/06
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, 2006 AND 2005
Figures in Thousands of Constant Ch$ as of June 30, 2006
	2006	2005
NET CASH PROVIDED BY USING IN OPERATING ACTIVITIES	115,555,144	87,758,311
Net income (Gain)	7,041,369	22,155,178
Result in sales of assets	-479,721	357
Gain (loss) in sale of fixed assets	0	357
Loss on sales of investments	82,695	0
Gain on sales of investments	-562,416	0
Charges (credits) to income not affecting cash flows:	117,597,364	116,350,652
Depreciation	103,344,955	100,589,055
Intangibles amortization	1,619,973	2,118,266
Write-off and provisions	13,211,626	12,252,731
Equity earnings from related companies (less)	-878,765	-768,008
Equity losses from related companies	35,611	33,714
Amotization of goodwill	1,478,913	793,911
Price-level restatement (net)	-1,361,896	2,877,419
Gain (loss) on foreign currency transactions	-671,095	-3,087,595
Other credits not affecting cash flows	-138,398	-24,805
Other charges not affecting cash flows	956,440	1,565,964
Decrease (increase) in current assets:	-22,098,341	4,406,409
(Increase) Decrease in trade receivables	-14,045,989	-25,692,317
(Increase) Decrease in inventories	-1,578,101	2,316,829
(Increase) Decrease in other current assets	-6,474,251	27,781,897
Increase (decrease) in current liabilities:	13,696,396	-55,137,995
Increase (decrease) in due to related companies,
related with operating activities	7,980,349	-15,809,178
Increase (decrease) in accrued interest payable	3,320,944	2,264,119
Increase (decrease) in income tax payable, net	2,996,119	-35,599,156
Increase (decrease) in other accounts payable
related with non operating result	406,746	-1,807,092
Increase (decrease) in value-added tax, net, and other	-1,007,762	-4,186,688
Income ( loss) of minority interest	-201,923	-16,290
COMPAÑÍA DE TELECOMUNICACIONES DE CHILE S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS PERIODS ENDED AS OF JUNE 30, 2006 AND 2005
Figures in Thousands of Constant Ch$ as of June 30, 2006
	2006	2005
NET CASH PROVIDED BY FINANCING ACTIVITIES	-129,246,388	-194,084,131
Liabilities with the public	65,770,519	35,353,837
Other financing disbursements
Repayment of dividends (less)	-13,382,693	-109,834,981
Repayment of capital (less)	-40,200,514	0
Repayment of loans (less)	0	-10,379,890
Repayment of liabilities with the public (less)	-140,758,312	-109,223,097
Repayment of loans to related companies (less)
Other payments by financing	-675,388	0
Repayment of loans (less)
NET CASH USED IN INVESTING ACTIVITIES	-49,894,824	-44,109,267
Sale of fixed assets	60,832	156,618
Additions to fixed assets (less)
Sale of permanent investments
Permanent investments	-3,138,208	-49,101
Sale of other investments	0	0
Collection of loans from related companies	0	0
Other revenues from investments	0	-
Additions to fixed assets (less)	-46,817,448	-31,357,975
Investments in financial instruments (less)	0	-4,987,081
Other investment disbursements (less)	0	-7,871,728
NET CASH FLOW FOR THE PERIOD	-63,586,068	-150,435,087
PRICE-LEVEL RESTATEMENT EFFECT ON CASH AND CASH EQUIVALENTS	-730,766	-1,000,192
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-64,316,834	-151,435,279
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	96,309,437	164,589,922
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	31,992,603	13,154,643

Última actualización 25/07/06
Por Telefónica CTC Chile