UPDATE 2-Mexico Telmex's net dips in 2nd-qtr

* Telmex net dips 40 pct in quarter from year-ago period

* Interest rate swaps weigh on bottom line (Adds lost lines, new broadband clients details, byline)

By Noel Randewich

MEXICO CITY, July 20 (Reuters) - Telmex, Mexico's dominant fixed-line phone operator, posted a 40 percent year-over-year decline in second-quarter net profit, missing analysts' expectations as it recognized derivatives losses.

Telmex, controlled by billionaire Carlos Slim's America Movil, said on Tuesday its net profit in the April-June period was 3.6 billion pesos ($278 million).

Analysts surveyed by Reuters had on average predicted a net profit of 4.304 billion pesos at Telmex, which controls about 80 percent of Mexico's fixed telephone lines and also is the leading broadband Internet provider.

In June, Slim's America Movil acquired Telmex and Telmex Internacional TELINTL.MX, the billionaire's regional fixed-line telecom, in a bid to be more efficient as competition heats up in the Latin American telecom sector.

America Movil (AMXL.MX) is expected to begin consolidating those companies' earnings in its results in the third quarter.

A financial charge of 1.3 billion pesos weighed on Telmex's net profit in the second quarter as the company recognized the market value of its interest rate swaps.

A former government monopoly, Telmex is scrambling to quickly build its Internet business to make up for a decline in its fixed-line and long-distance telephone revenues as clients switch to cellphones and telephone services offered by cable television companies.

Telmex TMX.N(TELMEXL.MX) lost 67,000 lines during the second quarter, fewer than analysts had expected.

It added 183,000 broadband Internet customers, helping increase revenues from data by 12.2 percent from a year earlier.

In the April-June period, Telmex's revenues fell to 28.44 billion pesos, 4.5 percent lower than during the same quarter in 2009 and in line with analysts' expectations.

Telmex's earnings before interest, taxes, depreciation and amortization, known as EBITDA, declined 13.2 percent from a year earlier to 11.3 billion pesos. Analysts had on average predicted a 9 percent dip. ($1 = 12.94 at end June) (Additional reporting by Jason Lange, editing by Leslie Gevirtz)