Bell Atlantic Corp. lost its bid yesterday for a major expansion into the international arena after its banking partner, Manufacturers Hanover Trust Co. of New York, failed to come up with the financing to take over half of Argentina's troubled telephone system.

The Argentine government moved quickly to continue its privatization of the state-owned telephone company, Entel, awarding the contract to a rival consortium led by the Italian telephone company, Stet, and financed by J.P. Morgan & Co., another giant New York bank.

Bell Atlantic officials expressed disappointment at not getting the contract, which they said would have provided an opportunity to show that the company can move outside its mid-Atlantic base and turn around a foreign telephone system widely regarded as one of the worst in the world.

"We deeply regret not having the opportunity to apply our managerial and technological skills in improving ... Argentina's telephone system," said Hyde Tucker, president and chief executive officer of Bell Atlantic International.

Argentine Embassy officials praised Bell Atlantic for doing "everything right" in drawing up a plan for a new telephone system covering the northern half of the country and half of its capital, Buenos Aires.

The officials said the problem was Manufacturers Hanover, which had the responsibility of raising $100 million in cash and arranging for the swap of $2.3 billion in Argentine debt held by Western banks and financial institutions for stock in the new enterprise. The consortium could not meet the Argentine deadline of 6 p.m. Thursday, Argentine authorities said.

Manufacturers Hanover officials said the members of the consortium -- which included a number of Argentine companies -- were unable to agree among themselves on how to structure the deal to attract other investors. The consortium had hired Bell Atlantic to run the system.

"Successful syndication is impossible right now," a bank official said.

Among the crucial unresolved issues, sources said, was what value should be given to shares in the new telephone company in relation to the debt, which had been selling at 13 cents to the dollar on the open market at the time the deal was first announced in June.

In a debt-equity swap, banks accept cut rate payments in dollars in exchange for shares in companies that presumably will provide profits in the long term.

Further questions were raised over how much of their own money members of the consortium should put into the deal, sources said.

J.P. Morgan officials in New York expressed confidence last night they would have no trouble financing essentially the same deal that Manufacturers Hanover struck out on.

Despite the good words of Argentine officials, the failure of the Argentine deal to come together was a blow to the new global strategy of Bell Atlantic, which operates telephone companies in six states and the District of Columbia.

As part of this strategy, Bell Atlantic teamed up with another "Baby Bell," Ameritech Corp., to buy virtually the entire New Zealand phone system and joined with US West to build cellular mobile phone and data transmission networks in Czechoslovakia.

The Argentine deal, however, was seen as the company's chance to show itself off in the difficult job of turning around a Third World phone system.

Selling money-losing state-owned enterprises is a crucial element of Argentine President Carlos Saul Menem's program to revitalize the stagnant and debt-burdened Argentine economy.