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Underlying profit at BellSouth, the third largest US telecommunications group, increased by 36 per cent in the fourth quarter as growth in its Cingular Wireless joint venture offset declines in the fixed line business which was also hit hard by the costs of hurricane repairs.

The Atlanta-based group, which owns a 40 per cent stake in Cingular, the largest US mobile carrier, said fourth quarter profits rose to $965m, or 53 cents a share on a normalised basis, from $720m, or 39 cents a share, a year earlier.

The figures exclude hurricane related expenses, costs related to Cingular’s acquisition of AT&T Wireless in October 2004 and other adjustments.

On the same basis, revenues increased by 9.2 per cent to $8.66bn driven by Cingular which announced earlier this week that it added 1.8m new subscribers in the quarter, and the growth of BellSouth’s DSL services.

Excluding Cingular’s contribution, profits fell to $618m, or 34 cents a share, from $1.36bn or 74 cents a share a year earlier when the results were boosted by the sale of the company’s Latin American operations.

BellSouth, the dominant telecoms carrier in the South East, said it incurred $244m in incremental expense and $189m of incremental capital expense because of hurricane Katrina which it estimates reduced fourth quarter revenues by $48m. The company now expects hurricane restoration costs to total between $700m and $900m.

BellSouth added 204,000 net new DSL customers in the quarter which helped lift retail data revenues by 15.9 per cent and offset a 6.2 per cent decline in access lines, “primarily driven by wireless substitution and to a lesser extent by competition from cable telephony providers,” the company said. At the end December, BellSouth served 20m local access lines.

“BellSouth is delivering solid revenue growth and strong earnings growth,” said Duane Ackerman, chief executive. “BellSouth’s earnings for the quarter reflect the value of our asset mix as the industry continues to undergo a transition to new services and new competition emerges.”

For the full year of 2005, BellSouth reported normalised revenues of $34bn, over 40 percent of which came from Cingular Wireless and a 6.5 per cent increase in net income to $3.66bn or $2.00 a share. The full year results reflected a higher contribution from the combined Cingular/AT&T Wireless business which offset financing costs associated with that deal and pressures in the fixed line business.

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