updated 9/6/2005 5:37:40 PM ET 2005-09-06T21:37:40

BellSouth Corp., the largest provider of local phone service in the areas hit by Hurricane Katrina, estimates it will cost the company at least $400 million to $600 million to restore service.

The company also said Tuesday it has restored service to more than half of the 1.7 million customer lines knocked out by the storm, but that it will take most of the month before the phones start ringing again in the hardest hit areas of the Gulf Coast — and probably longer in New Orleans.

It’s too hard to say at this point when phone service will be restored in the flooded city, said Joe Chandler, a BellSouth spokesman.

“Not going to guess,” he said. “It depends on when the floodwaters leave and when crews can get back in.”

BellSouth, based in Atlanta, provides telephone and telecommunications services to a nine-state region in the Southeast that includes Louisiana, Mississippi and Alabama.

The company said 1.7 million customers lost their phone service because of the storm. As of Tuesday, about 810,000 customer lines were still out of service or being temporarily maintained through emergency generators or other means. About 470,000 of those are in New Orleans, Chandler said.

Besides the hefty expense of restoring service, BellSouth is preparing for lost revenues. Chandler said there is not yet an estimate on how much revenue the company won’t take in because of the extensive outages.

Adding to the company’s costs is the fact that insurers have stopped reimbursing telecommunications companies for damage to copper and fiber phone lines that run directly to homes and businesses.

Asked how will the company will cover all the costs, Chandler said: “We’re not divulging that at this time.”

The financial uncertainty facing the company has not hurt BellSouth’s shares, which dipped modestly last week, but quickly recovered to pre-storm levels.

The stock rose 33 cents, or 1.3 percent, to $26.54 a share in Tuesday’s trading on the New York Stock Exchange. The price had dipped as low as $25.86 last week.

BellSouth reported operating revenues of $20.3 billion for last year, and net income of almost $4.8 billion.

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