Despite rolling out gigabit service in its biggest markets and boosting its broadband speeds overall, CenturyLink is still shedding data customers at a high rate because of fiercer cable competition.

CenturyLink Inc. (NYSE: CTL), the third largest US telco by subscribers, reported this week that it dropped another 77,000 consumer broadband subscribers in the second quarter, accelerating its string of quarterly sub losses. The provider closed out June with close to 5.9 million data customers, down 122,000 from nearly 6.0 million a year earlier.

The latest broadband losses come as CenturyLink continues to underperform even its own expectations and underwhelm investors. As a result, the company's stock price continues to slide, like that of other US rural incumbents. (See CenturyLink Posts Lackluster Q2 and Investors Flee US Rural Incumbents.)

Speaking on their earnings call late Wednesday, CenturyLink executives blamed their higher-than-expected data sub losses primarily on stiffer cable competition. They cited both gigabit service rollouts and more aggressive broadband pricing offers by MSOs in their territories. Among others, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , Cable One Inc. and Mediacom Communications Corp. have all been rolling out 1 Gig or faster service in CenturyLink's far-flung, largely rural and exurban territories.

CenturyLink officials also noted that they've eliminated several low-priced broadband offerings, tightened up credit standards and discarded higher-churning sales channels over the last two quarters. While those moves have depressed broadband sales further, officials say they've also helped the telco cut its high customer churn rate.

"Our churn looks great," said Maxine Moreau, president of consumer markets. "We want to continue that going forward."

Thanks to such moves, CenturyLink's consumer broadband revenues didn't slump as badly as might have been expected in the second quarter. But they still came in 3.1% lower than a year ago, falling to $661 million from $682 million.

The telco fared even worse on the video side, reporting that its other strategic consumer revenue (which is primarily video) dropped 9.3% from the year-earlier period, slipping to $107 million from $118 million in spring 2016. Company officials blamed that decline largely on the restructuring of their satellite TV resale agreement with DirecTV. For the second straight quarter, CenturyLink, which ended 2016 with 325,000 IPTV subscribers, did not break out its Prism TV IPTV subscriber and revenue numbers.

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Hoping to re-stoke its pay-TV business, CenturyLink is now delving into the OTT video market. In late June, the company launched a beta trial of a new skinny bundle service, CenturyLink Stream, in a number of markets. With the launch, company officials aim to offer more video programming options for current subscribers and appeal more to non-subs. (See CenturyLink Joins Streaming Parade and CenturyLink Preps for OTT Plunge.)

But, unlike other service providers doing the same, CentiryLink's commitment to the new streaming video bundles, which cost as low as $40 a month for nearly 50 channels, still seems less than firm. On the earnings call this week, company executives indicated that they might junk the new service if they could strike a deal to distribute another skinny bundle service instead.

"We have flexible packaging, including a lot of on-demand local broadcast, national channels, got some genre additions," said Glen Post, the company's CEO and president. "But we are very open to looking at other options… As a matter of fact, we continually talk to some of these other providers."

— Alan Breznick, Cable/Video Practice Leader, Light Reading